China grants driverless car permits to VW and Xpeng

XPENG has received approval to operate Level 4 autonomous robotaxis across Guangzhou, marking a shift from testing to public service. The company aims to refine fleet management and validate commercial models, with plans to expand internationally. XPENG will act as a technology provider, not a fleet operator, focusing on vehicle sales, software licensing, and ride commissions. The robotaxis use in-house Turing AI chips and existing EV architecture.

China granted autonomous driving permits to XPeng and Volkswagen’s joint venture. XPeng can now operate its Level 4 robotaxi, YoYo, in Guangzhou for testing. Volkswagen Anhui received a Level 3 test permit in Hefei. Tesla plans to launch its Cybercab by year-end, aiming to reduce production costs. The U.S. and China are competing in the autonomous-driving market.

JPMorgan cut price targets for Nio (3.70 USD) and XPeng (10.00 USD), citing weak demand and cost pressures. Targets are near current trading levels, with Nio at 3.29 USD and XPeng at 9.21 USD. Both stocks are near 52-week lows. Other analysts have mixed views, with Goldman Sachs more optimistic. Both companies met Q3 delivery guidance but face challenging Q4 targets.

Xpeng (XPEV) stock rose 4.5% after a Reuters report on its Volkswagen partnership, which investors saw as a net positive for its technology licensing. The UNYX 08 SUV sold fewer units than Volkswagen's target, but the UNYX 09 sedan, featuring Xpeng's VLA system, entered presales. XPEV's Q3 deliveries grew 15% sequentially, and shares had been near a 52-week low. Analysts' price targets range from $18 to $22.

Volkswagen's partnership with Xpeng to boost its China business has underperformed, with the ID. UNYX 08 electric SUV selling only 267 units monthly, far below the 3,622 target. The vehicle faces competition from cheaper, more advanced Chinese rivals. Volkswagen aims to sell 4,900 units monthly of the upcoming UNYX 09 sedan by 2034, but past forecasts have been overly optimistic.

BYD led China's NEV retail sales in September with 246,816 units, a 22.8% market share, despite a 16.7% year-over-year market decline. Tesla climbed to fourth place with 64,837 sales, up 29.6% from August. Leapmotor grew 30.8% year-over-year, the only top-five maker to do so. Total NEV retail sales fell to 1.084 million, below initial estimates.