xpeng challenges nvidia: ai chip supply talks with volkswagen

2025-06-13 nvidia

Guangzhou, Friday, 13 June 2025.
xpeng motors is in discussions to supply its turing ai chips to automakers. volkswagen may be the first customer. xpeng claims its chip’s effective computing power triples nvidia’s orin-x. this move could diversify xpeng’s revenue and challenge nvidia’s market dominance. xpeng’s turing ai chip boasts 2200 trillion operations per second (tops). existing models typically range from 80 to 700 tops. xpeng’s ai chip could reshape the automotive ai market.

nvidia’s market position

Nvidia currently dominates the automotive AI chip market [1]. Xpeng’s potential entry as a supplier could challenge this dominance [3]. If Xpeng secures significant supply deals, Nvidia’s market share could be affected [1]. Analysts are closely watching how this competition unfolds and the potential impact on NVDA’s stock [GPT].

revenue diversification for xpeng

For Xpeng, supplying AI chips represents a significant revenue diversification strategy [1]. He Xiaopeng mentioned that selling one million chips could make the business profitable [1][3]. This expansion could offset some of the substantial investments Xpeng has made in AI technology, which amount to approximately 5 billion yuan (around $700 million usd) annually [1]. These investments account for about half of the company’s total research and development expenditure [1].

competitive advantage

Xpeng’s Turing AI chip is being touted as a high-performance alternative to Nvidia’s Orin-X [1]. The company claims its chip has three times the effective computing power [1][3]. This performance advantage, if validated, could give Xpeng a competitive edge in securing partnerships with automakers [7]. Automakers are increasingly seeking advanced AI capabilities for autonomous driving and intelligent cockpits [1].

expert views and market impact

Market experts suggest that Xpeng’s move reflects a growing trend of foreign automakers relying on Chinese technology amid the shift to electric vehicles [1]. Volkswagen’s investment in Xpeng in 2023 underscores this trend [1]. However, it is important to note that negotiations between Xpeng and Volkswagen, as well as other automakers, are still ongoing [2]. The actual impact on Nvidia’s stock will depend on the scale and success of Xpeng’s chip supply business [alert! ‘future sales numbers unknown’][GPT].

xpeng’s stock performance

Recent news has had a mixed impact on Xpeng’s stock [4]. On June 12, 2025, Xpeng’s stock (XPEV.US) fell by 4% [4]. On June 13, 2025, Xpeng shares were down 5% [4]. These fluctuations may be attributed to market reactions to the news of AI chip supply plans and ongoing negotiations [alert! ‘correlation not causation’][4]. The company is considered to have high growth potential [4].

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nvidia ai chips