EXCLUSIVE Volkswagen to licence Xpeng’s autonomous driving solution for it’s China EVs in 2026
Volkswagen will utilise Xpeng’s autonomous driving solution, XNGP, for its China EVs starting in 2026. The first model featuring it will be a mid-size SUV jointly developed with Xpeng, sources within the company confirmed to CarNewsChina. The autonomous driving development was initially assigned to Cariad China.
Volkswagen announced in July 2023 that it is investing 700 million EUR in the Guangzhou-based automaker, acquiring a 4.99% stake. In early 2024, both companies confirmed that they are working on two mid-size SUVs, which are expected to launch in 2026.
The Sino-German team also works on a new EV platform called China Electronic Architecture (CEA), which will underpin Volkswagen-badged cars in China. The new platform is a slightly updated E/E platform, which Xpeng already uses for its EVs. Initially, it was intended to be used only for the two EVs developed in collaboration with Volkswagen. However, last year, Volkswagen announced that all its cars in China would use it.
“From 2026, all electric vehicles of the Volkswagen brand in China will be equipped with this very powerful and efficient architecture,” confirmed Ralf Brandstätter, a member of the Volkswagen AG board of management for China, in July 2024.
An E/E architecture is the central framework that organises and links all of a vehicle’s electrical and electronic systems. It functions as the car’s brain and nervous system, managing hardware, software, and data exchange to keep all systems working efficiently together. Volkswagen expects that it will help them shorten the vehicle development cycle, lower cost, and localise their EVs for domestic buyers under their new “in China for China strategy.”
In June 2025, Xpeng’s chairman, He Xiaopeng, announced his company would also supply its in-house developed Turing AI ADAS chips to Volkswagen and integrate them into VW-badged models starting in 2026.
Volkswagen is already testing the Xpeng’s XNGP on the first EV, which will start mass production in 2026, confirmed two sources to CarNewsChina, who wish to remain anonymous as they are not authorised to speak with the media. The ADAS will be first used on the two EVs co-developed with Xpeng. If the proof of concept is successful, all Volkswagen EVs in China will be gradually equipped with it. The branding of licensed XNGP on Volkswagen-badged vehicles hasn’t been finalised yet.
Representatives for Volkswagen China and Xpeng didn’t immediately respond to the request for comment from CarNewsChina sent outside regular business hours.
XNGP is Xpeng’s vision-based, HD maps-free, autonomous driving solution positioned to rival Tesla’s FSD.
Cariad (China), Volkswagen’s software development unit, is responsible for developing the Xpeng-Volkswagen CEA architecture on the German side. Initially, Cariad China stated that “it will contribute the latest technologies, including state-of-the-art autonomous driving systems (ADAS) and smart cockpit functions.”
“For this, we are transforming Cariad China from an integrator of global software solutions to a strong software partner that caters for the local customer requirements with the latest technologies,” said Cariad CEO Peter Bosch in 2024.
Last week, Cariad officially discontinued its own software development, Volkswagen CEO Oliver Blume announced. The software development unit will be downsized to only an integrator and coordinator of implementation for external software partners, such as China’s Xpeng or the US’s Rivian.
