XPeng has strengthened its trade secret protections, moving from individual case enforcement to a top-level system that creates a closed loop of prevention, in-process control, and post-event evidence collection and accountability.
On August 7, 2026, sources familiar with the matter revealed that XPeng issued an internal "Trade Secret Compliance Management System" to its employees. This document not only provides a comprehensive explanation of legal concepts related to trade secrets but also establishes detailed confidentiality management rules across multiple dimensions, including classified information, research and development, supply chain partners, breach incidents, and rewards and penalties. A key new addition is the management of the entire employee lifecycle, from onboarding to departure.
The system redefines and categorizes technical and business information, establishing four principles: categorized management, minimum access, full-process oversight, and reasonable use. Heads of centers and departments are designated as the primary responsible parties for confidentiality. Every step of a trade secret's lifecycle—from creation and storage to circulation, copying, release, decryption, and destruction—must be documented. The scope of management extends to classified items and areas, research and development, external collaborations, information releases, the supply chain, information systems, breach handling, and rewards and penalties.
A notable feature is the addition of full lifecycle management for employees, covering hiring, performance, transfers, and departures. Before hiring classified personnel, the company can review their past employment, intellectual property disputes, and non-compete agreements. For those with a history at competitor companies, XPeng may require them to provide confidentiality and non-compete documents from their former employer and sign a non-infringement commitment. Upon employee departure, the company conducts confidential exit interviews, ensures the handover of classified materials, reclaims access permissions, and performs terminal checks. For sensitive positions, the company can review records of unusual logins, bulk downloads, deletions, or external data transfers, and may initiate non-compete clauses, monitoring the employee's employment status during the restricted period.
In research and supply chain areas, the system proposes differentiated choices between patent and trade secret protection based on whether a result is easily reverse-engineered. It also establishes a whitelist for supplier access and a tiered management system, supported by segmented delivery, encrypted transmission, digital watermarks, and joint accountability. AI tools are also regulated: employees cannot use them beyond approved scopes, input data must be anonymized, and API call logs must be retained for two years with quarterly audits.
In the event of a breach, an investigation team composed of compliance, legal, IT, human resources, and the relevant classified department will be formed. They will secure evidence such as emails, chat records, file transfers, system logs, surveillance footage, and access control records. Depending on the situation, the company may take internal disciplinary action, pursue labor arbitration, file administrative complaints, initiate civil lawsuits, or refer the case for criminal prosecution. The system encourages employees to report vulnerabilities and violations, prohibits retaliation against good-faith whistleblowers, and offers rewards for validated leads.
Previously, on June 1, it was exclusively reported that XPeng's legal department filed for labor arbitration against a former employee suspected of violating a one-year non-compete obligation. Sources indicated that XPeng had paid the compensation in full and on time, but the employee joined a competitor and engaged in related research and development shortly after leaving. XPeng demanded the employee continue to fulfill the non-compete obligation, return the compensation, proceeds from the sale of restricted stock, and pay a penalty—totaling nearly 10 million yuan (approximately $1.4 million).
Zhou Rui, a partner at Beijing Guozun Law Firm, noted at the time that the Labor Contract Law clearly defines the legal validity and conditions for fulfilling non-compete agreements. XPeng's investigation and active pursuit of labor arbitration are reasonable measures to protect its corporate rights. "In this case, if the employee 'joined a competitor company shortly after departure and engaged in related research and development,' and the competitor's business overlaps with XPeng's fields of 'physical AI, robotics, and low-altitude aircraft,' it could constitute a breach," Zhou explained.
This arbitration signaled XPeng's intensified focus on trade secret protection. The rollout of the new system elevates individual case enforcement to a top-level framework, creating a closed loop of prevention, real-time control, and post-event accountability. As technology accelerates in areas like AI, chips, and robotics, and talent mobility increases, challenges such as inadequate protection, difficulties in evidence collection, and controlling employee leaks have become common issues for high-tech companies.
Notably, the State Administration for Market Regulation's "Trade Secret Protection Regulations," effective June 1, explicitly include data and algorithms as protectable technical information and encourage companies to strengthen internal controls and compliance management. Data shows XPeng's first-quarter research and development expenses this year were 2.91 billion yuan, a 46.8% year-over-year increase. According to previously disclosed plans, its 2026 R&D investment is expected to be around 12 billion yuan (excluding HT Aero), with continued investment in physical AI, robotics, and low-altitude aircraft. As the company's R&D boundaries expand, protecting core technology is no longer solely a legal issue but a governance challenge that requires collaboration across R&D, HR, supply chain, and information systems.