XPeng Inc. secured a Level 3 autonomous‑driving testing permit for operations in Guangzhou, a regulatory approval that unlocks real‑world testing on designated expressways and highways. The permit, granted by China’s Ministry of Industry and Information Technology, is a key step toward the company’s goal of launching three robotaxi models in 2026.
XPeng’s recent financial performance underscores the strategic importance of the permit. In Q3 2025, the company reported record revenue of RMB 20.38 billion (US$2.86 billion), up 101.8% year‑over‑year, and a gross margin of 20.1%, the highest in its history. Deliveries rose 149.3% to 116,007 vehicles, while the net loss narrowed to RMB 0.38 billion. The strong revenue growth was driven by a 241.6% jump in vehicle deliveries in Q2 2025 and a 330.8% increase in Q1 2025, reflecting robust demand for XPeng’s electric vehicles and a favorable mix of high‑margin models.
The Level 3 permit aligns with XPeng’s “physical AI” strategy, which centers on its Vision‑Language‑Action (VLA) 2.0 system and proprietary Turing AI chips. CEO He Xiaopeng emphasized that the permit “accelerates the deployment of our autonomous platform and brings us closer to a fully driverless fleet.” The company plans to open‑source VLA 2.0 to global partners, and its partnership with Volkswagen—focused on charging networks and AI integration—positions XPeng to monetize its AI capabilities beyond its own vehicle lineup.
The regulatory milestone also strengthens XPeng’s competitive stance against peers such as Changan and BYD, both of whom have obtained similar testing qualifications. By securing Level 3 testing earlier, XPeng can begin field trials that will inform the design and safety validation of its upcoming robotaxi models, potentially shortening the time to commercial deployment. The permit also signals to investors that XPeng is progressing on its long‑term vision of a fully autonomous mobility ecosystem.
XPeng’s management highlighted that the permit is part of a broader push into AI and robotics, with significant investments in humanoid robots and AI infrastructure. While the company continues to invest heavily in R&D, the improved margins and narrowing losses suggest that cost discipline is taking effect, giving management confidence to sustain the capital intensity required for autonomous development.
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