XPeng Inc. (XPEV): Business Model Canvas [Dec-2025 Updated]

So, you're trying to map out how this electric vehicle player is actually making money, right? Honestly, looking at their Q3 2025 numbers-a 20.1% gross margin is solid, but the path to consistent profit is still a fight. They're pouring about US$1.3 billion into R&D this year to back their proprietary XNGP autonomous tech, and they've got a war chest of US$6.64 billion in cash as of mid-2025. I've broken down their entire operation-from their 690-store physical footprint to their high-margin software service ambitions-into the nine essential blocks below so you can see exactly where the bets are placed.

XPeng Inc. (XPEV) - Canvas Business Model: Key Partnerships

You're mapping out the strategic alliances that underpin XPeng Inc.'s growth, especially as they push for international sales to hit their 2025 targets. These partnerships aren't just handshake deals; they involve significant capital and technology exchange.

Volkswagen Group: Joint E/E architecture development and charging network

The relationship with the Volkswagen Group is a major validation of XPeng Inc.'s core technology. Volkswagen Group invested $700 million for a 4.99% stake in XPeng Inc. as of July 2023. This deepened into a technical collaboration, with an expanded Agreement on Expanding E/E Architecture Technical Collaboration signed in August 2025. This means the jointly developed Electrical/Electronic (E/E) Architecture will be deployed across Volkswagen's electric vehicle (EV) platforms, and now also across its Internal Combustion Engine (ICE) and Plug-in Hybrid Electric Vehicle (PHEV) platforms in China. The joint development shortens the vehicle product development cycle by more than 30% and is expected to reduce system complexity by 30% and costs by 40% for Volkswagen's China operations. XPeng Inc. reported a 1.72 billion RMB profit from technology licensing fees from Volkswagen in the first half of 2025 alone. Mass production of the jointly developed VW brand models is slated to begin in 2026.

This partnership extends to infrastructure. In January 2025, XPeng Inc. and Volkswagen China agreed to jointly build one of the largest super-fast charging networks in China, aiming for more than 20,000 charging units across 420 cities. When combined with XPeng Inc.'s separate January 2025 Memorandum of Understanding (MOU) with BP Pulse, which brought in BP Pulse's 23,000 piles, XPeng Inc. customers gain access to around 40,000 charging piles across China. XPeng Inc. itself operates 1,790 charging stations with 9,070 piles as of early 2025.

CATL: Critical supplier for high-voltage lithium-ion battery modules

While XPeng Inc. has actively diversified its battery supply chain-with CALB becoming its largest supplier as of mid-2023, exclusively supplying the G6 model-CATL remains a major force in the ecosystem. CATL is the world's largest EV and energy storage battery manufacturer, holding a global market share of around 38% in 2025. The G6 model, which launched in the UK in early 2025, is equipped with high-rate fast-charging batteries based on an 800 V high-voltage platform. Although CALB is noted as the exclusive supplier for the G6, the broader category of high-voltage lithium-ion battery modules is supplied by multiple high-quality partners to ensure supply stability.

Here's a look at the competitive landscape for battery suppliers in China:

DiDi: Acquisition of autonomous driving technology unit

The acquisition of DiDi's smart EV technology unit was a strategic move to accelerate high-level assisted driving capabilities into more accessible price points. The deal was valued at up to $744 million in an all-stock transaction. DiDi received new Class A ordinary shares representing about 3.25% of XPeng Inc.'s total equity initially, with a mechanism allowing for an increase up to a maximum stake of 5% if the joint project hits sales milestones. DiDi is subject to a 24-month lock-up period on its shares post-initial closing. This integration supports the 'Mona' project, XPeng Inc.'s second smart car brand, which targets the mass market segment with an expected price tag around CNY 150,000 (approximately $20,580).

International Motors Ltd: Strategic distributor for UK market entry

International Motors Ltd (IML) is the official distributor for XPeng Inc.'s entry into the UK, a priority market for the company's European expansion. The launch commenced in early 2025 with the XPENG G6 SUV. This aligns with XPeng Inc.'s ambitious goal to be present in over 60 global markets by the end of 2025, with a vision for half of its total sales to originate from overseas markets that year. For context on the market they are entering, the UK had 62,536 public charging devices as of July 1, 2024. IML brings nearly 50 years of experience in vehicle distribution across the UK, Ireland, and Northern Europe.

Alibaba Group: Strategic investment and technology integration

Alibaba Group has been a foundational strategic investor. As of May 2021, Alibaba Group held 12% of XPeng Inc.'s shares. This relationship dates back to a fundraising round where Alibaba co-led the investment of 2.2 billion yuan ($348 million). The partnership is designed to capitalize on the overlap between internet, artificial intelligence, and traditional manufacturing, supporting XPeng Inc.'s research and production costs.

Key financial and operational metrics tied to these partnerships include:

• XPeng Inc.'s projected deliveries by the end of 2025, partly supported by the VW E/E deal, are estimated at 380,000 units.
• The DiDi deal targets the RMB 150,000 ($20,580) price point for the Mona brand.
• XPeng Inc. reported 1.72 billion RMB in H1 2025 licensing profit from Volkswagen.
• The combined VW and BP Pulse charging network gives customers access to over 40,000 piles in China.
• Alibaba Group's initial investment contribution was $348 million (2.2 billion yuan).

XPeng Inc. (XPEV) - Canvas Business Model: Key Activities

You're looking at the core engine driving XPeng Inc.'s strategy as of late 2025. These are the non-negotiable, hands-on tasks the company must execute flawlessly to deliver on its technology-first promise.

In-house R&D of Smart EV and AI-driven autonomous driving (XNGP)

XPeng Inc. treats R&D as a primary differentiator, pouring significant capital into its in-house capabilities, especially for its advanced driver-assistance system (ADAS) technology.

The company's commitment to this area is reflected in its spending figures for the year.

• Planned total annual R&D investment for 2025: ¥50 billion (approximately $7 billion).
• Planned AI-specific investment for 2025: ¥30 billion (approximately $4.2 billion).
• R&D expenses for the twelve months ending September 30, 2025: $1.199B, a 47.81% increase year-over-year.
• R&D spending in Q2 2025: RMB 2.21 billion (US$0.31 billion), up 50.4% YoY.

This investment fuels the development of proprietary hardware and software, such as the Turing chip, which is central to their AI strategy. The G7 model, launched in July 2025, incorporates three self-developed Turing chips. The Turing AI chip features 40 cores and can run large AI models with up to 30 billion parameters. The computing power delivered by this hardware is cited at 2,250 TOPS.

The operational success of XNGP is measured by user adoption:

• XNGP achieved a monthly active user penetration rate of 83% in urban driving in September 2025.
• XPeng aimed to achieve L3 autonomous driving availability by the second half of 2025.

Manufacturing and assembly of electric vehicles

Scaling production efficiently is critical, especially given the aggressive delivery targets for 2025. The manufacturing activity focuses on high-volume output across key models.

Here are the recent delivery volumes that demonstrate manufacturing throughput:

The manufacturing process is also showing efficiency gains, with the New XPENG P7 model reaching a production rate of 40 JPH (jobs per hour) on a new production line as of September 2025.

Global sales network expansion to over 60 countries by 2025

XPeng Inc. is executing a clear globalization roadmap, aiming to significantly increase its international footprint this year.

The stated ambition for 2025 is to enter 60 countries and regions. By late September 2025, the sales and service network reportedly covered more than 46 countries and regions worldwide. The company also plans to establish over 300 overseas after-sales service outlets in 2025.

Recent expansion activity includes:

• Entry into five new European markets (Switzerland, Austria, Hungary, Slovenia, and Croatia) announced on September 26, 2025.
• Overseas business grew rapidly, with international, Hong Kong, Macao, and Taiwan deliveries exceeding 24,702 units in the first eight months of 2025, up more than 137% year-on-year.
• In Europe, XPeng is noted as the No. 1 Chinese brand in mid-to-high-end pure EV sales.

Operating and expanding ultra-fast charging infrastructure

Building out the energy ecosystem is a parallel key activity, supporting the global sales push and enhancing the user experience. The focus is on proprietary ultra-fast charging deployment.

The company's goal for its proprietary network by the end of 2025 is to have 2,000 super-fast charging stations. As of Q2 2025, the company reported operating 1,304 ultra-fast stations, contributing to a total of 2,348 self-operated charging stations.

In China, strategic cooperation with Volkswagen has expanded network access:

• As of January 2025, the sharing agreement with Volkswagen China covers access to over 20,000 charging piles across 420 cities in China.
• XPeng operated 1,790 fast charging stations in China with up to 9,070 piles as of early 2025.

Globally, the ultra-fast charging network was set to launch in Southeast Asia in 2025, starting with Hong Kong SAR and Thailand in the first half of the year.

XPeng Inc. (XPEV) - Canvas Business Model: Key Resources

You're looking at the core assets XPeng Inc. (XPEV) is using to compete in late 2025. These aren't just nice-to-haves; they are the foundational elements driving their current market position and future potential. Honestly, in this segment, technology and liquidity are the name of the game.

Proprietary ADAS/AI technology (XNGP) and E/E architecture represent a massive internal capability. The XNGP (XPENG Navigation Guided Pilot) system is a key differentiator. By October 2025, the monthly active user penetration rate for XNGP in urban driving hit 86%. The company is pushing for quasi Level 3 level performance in its Turing chip vehicles by the end of 2025. This push is supported by an AI R&D team exceeding 3,000 members, with an annual R&D investment of 3.5 billion yuan.

The introduction of the in-house developed Turing AI chip is a huge resource upgrade. The G7 Ultra edition debuted with three of these chips, delivering a combined 2200 TOPS (Tera Operations Per Second) of compute power, which is triple the compute of typical industry flagships at the time. One Turing chip is claimed to equal the performance of three Orin-X chips and supports on-device inference for AI models up to 30 billion parameters. This move reduces dependency on generic processors and lowers system complexity and cost.

XPeng Inc. (XPEV) maintains a strong balance sheet, which is critical for funding the massive R&D and capital expenditure required in this industry. As of June 30, 2025, the company reported cash and cash equivalents, restricted cash, short-term investments, and time deposits totaling RMB 47.57 billion, equivalent to approximately US$6.64 billion.

The physical infrastructure supporting their vehicles is also a core asset. You need to look at the charging network expansion:

• Self-operated charging stations reached 2,348 stations as of June 30, 2025.
• This network included 1,304 XPENG S4 and S5 ultra-fast charging stations at that time.
• By the end of September 2025, the count grew to 2,676 self-operated charging stations, including 1,623 ultra-fast S4/S5 stations.
• In October 2025 alone, XPeng Charging added 117 new self-operated stations.

The commitment to in-house developed vehicle platforms ensures architectural control over the entire vehicle stack, from hardware to software. This is complemented by the strategic integration of the Turing chip across future models, including plans to integrate it into Volkswagen models within the next 12 months. Here's a quick comparison of some key operational metrics around the time of the Q2/Q3 reporting:

This vertical integration, especially in silicon and software, is a defintely expensive resource commitment, but it's designed to yield competitive advantages in the long run.

XPeng Inc. (XPEV) - Canvas Business Model: Value Propositions

Industry-leading, full-scenario Advanced Driver Assistance System (XNGP).

• XNGP monthly active user penetration rate in urban driving reached 86% in October 2025.
• The penetration rate was 85% in May 2025.
• In January 2025, the penetration rate reached 87% in urban driving.
• The system has covered over 2,595 cities and 7.56 million kilometers of road so far.
• XPeng aims for a comprehensive door-to-door autonomous driving experience by the end of 2025.

Premium, high-performance Smart EVs (G6, G9, X9 models).

XPeng Inc. delivered 42,013 Smart EVs in October 2025, marking a 76% year-over-year increase. Year-to-date deliveries through October 2025 reached 355,209 units, a 190% surge from the same period last year. The 2025 X9 flagship MPV is priced from 43,400 USD for the Extended-Range version. Domestic demand for the G6 remained strong, with deliveries up 74% year-on-year in the first three quarters of 2025. The company announced plans to localize production of the G6 and G9 models in Europe starting in the third quarter of 2025.

Ultra-fast 800V charging architecture for rapid energy replenishment.

The 800V architecture enables industry-leading charging speeds across the latest models. The 2025 X9 can add a range of 405 km in just 10 minutes. Both the G6 and G9 models can charge from 10% to 80% in just 12 minutes at suitable fast-charging stations. The G6 achieves a peak DC charging power of up to 451 kW, with a 10-80% charge power of 290 kW DC. The G9 supports an even higher peak charging power of up to 525 kW. This performance is enabled by new battery packs supporting a 5C charging rate, an increase from the previous 3C rate.

Integrated human-AI co-pilot experience (Tianji XOS).

The latest software version, Tianji XOS 5.7.0, launched with the MONA M03 Max, introducing over 300 new features. The previous version, XOS 5.5, was rolled out in January 2025. An OTA update, XOS 5.6, was launched on April 8, 2025, enhancing features like navigation-guided driving. The company is investing heavily in AI technology, spending over RMB 3.5 billion (or $480 million) in 2024 on R&D for smart driving.

XPeng Inc. (XPEV) - Canvas Business Model: Customer Relationships

You're looking at how XPeng Inc. connects with the people buying their Smart EVs, which is key when you're scaling this fast. The relationship strategy mixes the physical presence with deep digital integration, especially around their AI tech.

High-touch experience through a mix of direct and franchised stores

XPeng Inc. maintains a physical footprint to offer that necessary high-touch sales experience, though the data primarily reflects their direct network growth. As of September 30, 2025, the physical sales network stood at 690 stores, a clear increase from the 677 stores reported at the end of H1 2025. These stores are spread across 242 cities as of the end of Q3 2025. The international push is also visible here; in Q3 2025 alone, the company added 56 new overseas stores, pushing their global sales and service network reach to 52 countries and regions. Honestly, that physical touchpoint is what grounds the high-tech product in a tangible experience.

Here's a quick look at the physical network expansion:

Community building around technology and AI-driven features

The community focus for XPeng Inc. clearly centers on their technological differentiation, particularly their advanced driver-assistance systems (ADAS). This isn't just about selling cars; it's about selling a platform. The success of their AI features drives engagement and word-of-mouth. For instance, the XNGP autonomous driving system showed strong user integration, hitting an 85% urban usage rate in November 2025. This high adoption rate for a core technology is a powerful community builder, as early adopters become advocates for the AI capabilities.

Key technology adoption metrics include:

• XNGP urban driving monthly active user penetration rate: 85% as of August 2025.
• XNGP urban usage rate: 85% as of November 2025.
• Overseas monthly deliveries surpassed 5,000 units for the first time in September 2025.

Digital engagement via in-car software updates and services

Digital engagement is baked into the ownership experience through continuous software evolution. This keeps the relationship active long after the initial sale. A concrete example of monetizing this digital relationship is the introduction of the ADAS Insurance Service in April 2025, which is priced at RMB 239 per year, offering extra coverage when NGP is active. This shows a direct link between software features and recurring customer spend.

The company's overall digital ecosystem is expanding, evidenced by their commitment to rolling out VLA 2.0 and planning Robotaxi pilots in 2026. This roadmap keeps the tech-savvy customer base engaged with future upgrades.

Customer-focused charging convenience via proprietary network

Convenience, especially around energy replenishment, is a critical relationship anchor in the EV space. XPeng Inc. has aggressively built out its self-operated charging infrastructure within China. As of September 30, 2025, the self-operated charging station network reached 2,676 stations. Of those, 1,623 stations are the high-power S4 and S5 ultra-fast chargers. This is up from 2,348 stations at the end of H1 2025.

The strategy is dual-track: self-operation plus ecosystem integration. Globally, through partnerships like Plugsurfing in Europe, the network covers 850,000 charging piles across 27 countries. Overall, the global charging service network reached 2.07 million charging piles as of May 2025.

Charging Network Scale Snapshot (Self-Operated in China):

XPeng Inc. (XPEV) - Canvas Business Model: Channels

You're looking at how XPeng Inc. (XPEV) gets its smart electric vehicles (EVs) and services to customers, which is a mix of physical presence and digital reach. This channel strategy is crucial as they push for global scale.

Physical Sales Network in China

XPeng Inc. (XPEV) maintains a significant physical footprint in the domestic market to facilitate sales and customer experience. As of June 30, 2025, the company's physical sales network comprised 677 stores, which covered 224 cities in China. This network is complemented by the expansion of their direct sales and service centers, with a reported 690 retail stores mentioned in a context near this period.

The scale of this physical channel is best summarized in this table:

Self-Operated Ultra-Fast Charging Stations (S4/S5)

A core part of the channel strategy is owning the charging experience. XPeng Inc. (XPEV) is aggressively building out its proprietary charging network, especially the high-power models.

• Self-operated charging station network reached 2,348 stations as of June 30, 2025.
• The network included 1,304 XPENG S4 and S5 ultra-fast charging stations as of June 30, 2025.
• By August 1, 2025, the network grew to over 2,440 stations with 13,200 charging connectors across 430 cities nationwide.
• The company plans to deploy 10,000 self-operated charging stations by 2026.
• The 2026 target includes 4,500 liquid-cooled ultra-fast charging stations.

The S5 ultra-fast charger can deliver a peak charging power of 800kW, with a maximum output current of 800A and voltage of 1,000V.

International Distributors and Direct Sales in Europe and Asia

XPeng Inc. (XPEV) is executing its 'Go-Global 2.0 strategy,' heavily relying on partnerships for market entry outside of China. In Q3 2025, the company grew its global presence by adding 56 new overseas stores, expanding its sales and service network to 52 countries and regions worldwide.

Key international channel data points include:

• Overseas deliveries between January and August 2025 totaled nearly 25K vehicles.
• The company officially launched in five additional European markets in September 2025: Switzerland, Austria, Hungary, Slovenia, and Croatia.
• In Germany, XPeng Inc. (XPEV) operates 35 sales outlets.
• The company aims to expand its international presence to 60 markets by the end of 2025.
• The first European localized production facility, in Graz, Austria, commenced operations in Q3 2025.

The European channel strategy involves partnerships, such as with Hedin Group in Switzerland, aiming for 8 to 10 sales outlets there by the end of 2025.

Online Sales Platforms and Mobile Applications

XPeng Inc. (XPEV) uses online sales platforms and mobile applications to support its sales and customer relationship management. While the company's strategy heavily involves digital integration for vehicle features and customer interaction, specific, verifiable revenue or usage statistics for these platforms for late 2025 are not explicitly detailed in the latest financial updates found.

Finance: draft 13-week cash view by Friday.

XPeng Inc. (XPEV) - Canvas Business Model: Customer Segments

The customer segments for XPeng Inc. are clearly defined across domestic and international arenas, heavily weighted toward consumers who value technological integration in their mobility solutions.

The core domestic segment consists of technology-savvy, middle-class consumers in China. This demographic is generally characterized by an age range of 25 to 45 and possesses a higher disposable income. XPeng Inc.'s mission explicitly targets the large and growing base of these consumers. The introduction of models like the Mona M03, with prices starting below $17,000, shows a strategic push to capture a broader segment of the budget EV market.

For global EV buyers in expanding international markets, XPeng Inc. has an aggressive footprint plan. The company aims to extend its reach to over 60 countries and regions by the end of 2025. As of January to August 2025, overseas markets accounted for 9.09 percent of the company's total deliveries. In the UK, the launch of the XPENG G6 SUV is positioned at a competitive price point of sub-£45k. The company has doubled its overseas retail outlets to 275 locations.

A significant segment comprises early adopters prioritizing autonomous driving and smart features. The company is investing heavily in this area, increasing its hiring target to 8,000 employees by 2025 to bolster AI and smart driving capabilities. The advanced XNGP system achieved a monthly active user penetration rate of 83% in urban driving as of September 2025. Furthermore, the Mona M03 Max model, slated for mass production in the first half of 2025, is intended to offer these advanced self-driving features for less than $20,000.

The segment of fleet operators for robotaxi and commercial applications is also a focus, particularly with larger vehicle offerings. Early interest for the X9 people mover is noted among fleet operators and mobility providers seeking intelligent, long-range vehicles. XPeng Inc. supports its sales and service network with a total of 690 stores covering 242 cities as of September 30, 2025.

Here's a quick look at the scale of adoption and network supporting these segments as of late 2025:

The appeal to the tech-focused buyer is further evidenced by the product features and financial performance:

• Vehicle gross margin improved to 20.10% in Q3 2025.
• Vehicle margin reached 10.5% in Q1 2025.
• The company expects Q4 2025 deliveries between 125,000 and 132,000 units.
• The X9 domestic starting price is 359,800 yuan (approx. $56,500).
• The company completed 112% of its 350,000-unit annual target by November 2025.

XPeng Inc. (XPEV) - Canvas Business Model: Cost Structure

You're looking at the major outflows that keep XPeng Inc. running and pushing its technology forward. Honestly, for a company this focused on software and AI integration, the R&D line item is where a huge chunk of the capital goes.

High R&D Investment

XPeng Inc. has committed significant capital to maintain its technological edge, especially in autonomous driving and AI. The planned investment for the full 2025 fiscal year was set at 9.5 billion yuan (US$1.3 billion). This commitment is part of a broader, more aggressive technology push, with other reports indicating an even larger annual R&D budget target of approximately ¥50 billion (approximately $7 billion), with over half of that, ¥30 billion (approximately $4.2 billion), specifically allocated to Artificial Intelligence initiatives. To give you a sense of the quarterly burn rate for this, Research and development expenses for the third quarter of 2025 totaled RMB 2.43 billion (US$0.34 billion). That's a substantial cost, but it supports their in-house chip development, like the Turing chip, and the expansion of their intelligent driving systems.

The cost structure is heavily weighted toward innovation, but the core operations still demand significant resources:

• R&D expenses for Q3 2025: RMB 2.43 billion.
• AI-specific R&D investment planned for 2025: 4.5 billion yuan (600 million USD).
• Total R&D and manufacturing investment already made as of early 2025: over 50 billion yuan (6.8 billion USD).

Manufacturing Costs and Raw Materials

Manufacturing costs are directly tied to vehicle volume, which saw record deliveries in Q3 2025. The Cost of Sales for the third quarter of 2025 reached RMB 16.28 billion (US$2.29 billion), increasing year-over-year in line with higher vehicle deliveries. Battery procurement is a key component here. XPeng Inc. has strategically shifted to offering Lithium Iron Phosphate (LFP) battery options alongside their Nickel Cobalt Manganese (NMC) packs, which helps manage input costs. The use of cost-effective LFP batteries has been cited as contributing to a 30-40% reduction in production costs in some contexts. This focus on material cost management is crucial given the competitive pricing environment for their vehicles.

Selling, General, and Administrative (SG&A) Expenses

SG&A expenses reflect the costs of sales infrastructure and marketing efforts needed to support volume growth. For the third quarter of 2025, Selling, General, and Administrative expenses were RMB 2.49 billion (US$0.35 billion). This represented a 15.0% increase from the second quarter of 2025, primarily driven by higher franchisee commissions due to increased sales volume and greater marketing spend.

Capital Expenditure for Charging Network Build-out

Building out the energy replenishment network is a necessary capital outlay to support customer adoption and reduce range anxiety, a key part of the overall ecosystem cost. XPeng Inc. had a specific target to build 3,000 supercharging stations by the end of 2025, though as of April 2025, they had already deployed 2,160 self-operated charging stations across 420 cities in China. Furthermore, a major strategic collaboration with Volkswagen Group China involves building one of the largest super-fast charging networks, aiming for over 20,000 charging units across 420 cities in China. This dual-track strategy of self-operation plus ecosystem partnerships helps manage the capital intensity of this build-out.

Here's a quick look at some of the key expense line items from Q3 2025 and key 2025 targets:

The shift to LFP batteries is noted to potentially reduce production costs by 30-40%. Finance: draft 13-week cash view by Friday.

XPeng Inc. (XPEV) - Canvas Business Model: Revenue Streams

You're looking at how XPeng Inc. converts its smart EV and technology development into hard cash as of late 2025. The third quarter of 2025 showed a clear two-pronged approach to revenue generation, moving beyond just moving metal off the lot.

The total revenue for the third quarter of 2025 hit RMB 20.38 billion (US$2.86 billion), a massive jump of 101.8% year-over-year. This top-line growth is supported by strong operational execution, pushing the overall gross margin to a record 20.1% for the quarter. Here's how that revenue broke down:

The vehicle sales component remains the largest piece of the pie, but the margin profile of the second segment is what really lifted the total gross margin from 15.3% in Q3 2024 to 20.1% in Q3 2025. That Services and Others segment is definitely where the high-margin software and tech work is showing up.

Focusing on those specific high-value revenue streams within Services and Others:

• Services and Others Revenue: Reached RMB 2.33 billion in Q3 2025, up 78.1% year-over-year, with a margin of 74.6%.
• Technical R&D Services: This was the primary driver for the Services and Others revenue growth, specifically from technical R&D services rendered to a major car manufacturer, identified as Volkswagen Group.
• Technology Licensing/Chip Revenue: Volkswagen designated XPeng Inc.'s Turing SoC for co-developed vehicles, with management indicating that chip revenue recognition is expected to start in the fourth quarter of 2025 and ramp up with production next year.
• Software Subscriptions: Revenue from software, including features for ADAS/XNGP, is embedded within this high-margin segment, contributing to the 74.6% margin, though a specific standalone figure wasn't detailed for Q3 2025.

The company's R&D expenses for the quarter were RMB 2.43 billion, showing reinvestment into the technology that fuels these high-margin service contracts. Finance: review the Q4 2025 guidance for total revenue, projected between RMB 21.5 billion and RMB 23.0 billion, to model the expected contribution from the newly recognized chip revenue stream.