Produced by Leida Finance. Written by Ding Yu. Edited by Meng Shuai.

Recently, a report by Economic Information Daily brought to light the conflict between some XPeng Motors owners and the brand.

The incident arose from complaints by owners that the 2023 XPeng G6 had secretly reduced millimeter-wave radar configurations and unilaterally modified the electronic user manual, leveraging its dominant position as an automaker. After the incident, the company cited pure vision technology upgrades as justification for the reduction, raising suspicions of false advertising and sales fraud.

The controversy surrounding XPeng Motors may be related to its shift in intelligent driving technology route. Early on, XPeng adopted an intelligent driving solution consistent with the industry mainstream, following a 'radar + vision' fusion route.

Today, XPeng has chosen to abandon LiDAR and adopt a more challenging pure vision solution. Previously, the brand's PR head publicly made ' braid (braid-cutting)' remarks, comparing the abandonment of LiDAR to 'cutting off the braid behind one's head,' which sparked controversy.

In the view of XPeng's helm, He Xiaopeng, the previous poor performance of pure vision was due to weak computing power, but its future potential will far exceed that of LiDAR. XPeng's shift to a pure vision route may also be driven by considerations of technical cost reduction.

In recent years, through a series of technical cost-reduction measures and operational improvement plans, XPeng's automotive gross margin and performance have significantly improved. In the third quarter of 2025, XPeng reported a net loss of RMB 380 million, narrowing by nearly 80% from RMB 1.81 billion in the same period last year.

Looking ahead to the fourth quarter of 2025, He Xiaopeng confidently stated, 'Our goal is to achieve break-even for the company in the fourth quarter.' However, in the fourth quarter of last year, XPeng delivered 116,200 new vehicles, failing to meet the previously set delivery guidance of 125,000 to 132,000 units.

As of the market close on January 2, XPeng's latest stock price was HKD 80.35 per share, with a total market capitalization of HKD 153.6 billion.

On the 2025 Hurun China Rich List, He Xiaopeng achieved a comeback with a net worth of RMB 48 billion, surpassing Li Xiang, the helm of Li Auto, to become the new richest person in the new energy vehicle sector (given Xiaomi Group's higher proportion of mobile phone and other businesses, Lei Jun is temporarily excluded from this wealth comparison).

Reduction of Millimeter-Wave Radar? XPeng Accused of 'False Advertising'

At the end of 2025, Economic Information Daily published a report titled 'Some XPeng Models Accused of Suspected Sales Fraud,' sparking widespread concern.

One owner stated that they purchased a 2023 XPeng G6 755 Ultra Long Range Max on December 29, 2024. The salesperson introduced that the vehicle was equipped with five millimeter-wave radars, but the purchase contract did not include a configuration list, which could be checked in the XPeng App's electronic user manual. After verifying the information, the owner proceeded with the payment and took delivery of the vehicle.

However, during a vehicle disassembly for repair, the owner discovered that neither the left front nor the right front of their XPeng vehicle was equipped with millimeter-wave radars.

Subsequently, the owner complained to XPeng's after-sales service, demanding an explanation and a solution. However, XPeng's personnel responded by stating, 'Hardware simplification does not mean functional simplification. XPeng's latest 'AI Hawk Eye Pure Vision Solution' replaces corner radar sensing capabilities with front cameras,' thereby evading responsibility.

What was even more unacceptable to the owner was that shortly after their complaint, the configuration details for the 2023 XPeng G6 755 Ultra Long Range Max in the XPeng App's electronic user manual were quietly modified, reducing the number of millimeter-wave radars from five to three.

According to an investigation by Economic Information Daily, similar experiences were not isolated incidents. Some owners even found that although their vehicles were physically equipped with five millimeter-wave radars, XPeng had disabled two of them through OTA software without informing or obtaining consent from the owners, effectively reducing the configuration.

Additionally, Economic Information Daily obtained a 'Rights Protection Letter' collectively signed by 159 XPeng PRO owners and addressed to Guangzhou XPeng Motors Technology Co., Ltd., as well as a 'Jointly Signed Document by Rights Protection Owners.'

The complaints in the aforementioned documents included 'reduction of millimeter-wave radar configurations, suspected false advertising and fraudulent sales.' The cause of the rights protection was also 'purely accidental': 'Some owners accidentally discovered during maintenance that the actual number of millimeter-wave radars installed in their vehicles was not the advertised five, but had been secretly reduced to three.'

In response to this matter, XPeng officially admitted in a roundabout way: 'After upgrading to a pure vision-assisted driving solution, the company has eliminated the use of front corner millimeter-wave radars, and the production of relevant models has simplified the corresponding hardware.' 'Changes in specific vehicle functional configurations have been synchronized on the company's official website, App, and other channels, and there is no concealment or fraudulent behavior as described by the customer.'

At the same time, XPeng's PR also stated that after reducing the millimeter-wave radar configuration, 'the vehicle's assisted driving functions remain unchanged and will provide a better driving experience with the evolution of AI large models.'

However, XPeng's response did not gain recognition from XPeng owners. The jointly signed rights protection letter stated: 'As an important sensor in the intelligent assisted driving system, the reduction in the number of millimeter-wave radars directly affects the vehicle's sensing capabilities, the accuracy, safety, and reliability of assisted driving, thereby impacting the vehicle's core functions and usage value.'

According to the Auto Quality Promotion Platform mini-program, as of press time, over 60 owners have 'banded together' to report issues such as the reduction and failure of millimeter-wave radars in XPeng vehicles.

Additionally, another 33 owners have 'banded together' to report that the software functions of the XPeng G6 Pro version do not match the advertisements. The owners hope that XPeng Motors will introduce specific and feasible solutions for issues such as intelligent driving coverage on expressways, highway map updates, SR function optimization, and chip computing power release.

Leading the Introduction of LiDAR, Then Embracing the Pure Vision Route

The accusations of false advertising against XPeng Motors may be closely related to its shift in intelligent driving technology route.

Public information shows that environmental sensing is a key technology for automotive intelligent driving. There are numerous sensors responsible for environmental sensing in vehicles, commonly including cameras, laser scanners, millimeter-wave radars, and ultrasonic radars.

XPeng Motors has previously pointed out that each sensor has its own advantages and disadvantages. For example, cameras excel in object recognition but lack distance information. Laser scanners and millimeter-wave radars can accurately measure object distances but are far inferior to cameras in object recognition.

Based on the advantages and disadvantages of each sensor, in the early days, automakers mainly pursued a 'radar + vision' fusion direction.

In 2018, when XPeng Motors launched its first electric vehicle, the XPeng G3, it demonstrated the AEB (Automatic Emergency Braking with Pedestrian Detection) function brought by the fusion solution.

In early 2021, XPeng Motors officially announced a cooperation with Livox, a company incubated by DJI, to use its custom-made automotive-grade LiDAR in a new mass-produced model to be launched in 2021. XPeng thus became the first automaker to introduce LiDAR into vehicles.

In August 2023, XPeng emphasized the 'dual front LiDAR' of the XPeng G6 in an article published on its official WeChat account, claiming it had an ultra-wide sensing range and was the best LiDAR solution for urban NGP (Navigation Guided Pilot).

However, the path of technological development is not set in stone. In June 2024, He Xiaopeng appeared in the United States and, after experiencing Tesla's FSD pure vision intelligent driving solution, posted on Weibo, 'I am deeply impressed by the significant progress of FSD in recent months. We will also learn from FSD's excellent functional points and user experience.'

In July of the same year, there were reports that XPeng would launch a new model with the internal code name F57 in the fourth quarter of 2024, which would not use any LiDAR and would shift to a Tesla-like pure vision solution for its intelligent driving system.

By August 2025, He Xiaopeng provided a clear response to the debate between the pure vision and LiDAR technology routes.

He stated that XPeng Motors had made the decision two years ago to adhere to a pure vision route for its assisted driving, autonomous driving, and even future unmanned driving.

He Xiaopeng believed that the previous poor performance of pure vision was due to weak computing power, but its future potential would far exceed that of LiDAR. 'In the future, vision will be able to identify potential tire-puncturing nails on the road and moved manhole covers, which LiDAR will find difficult to do.' He also predicted that by 2027, the controversy between LiDAR and pure vision routes would disappear.

However, according to Economic Information Daily, some industry experts stated that in recent years, XPeng Motors' shift from LiDAR to a pure vision solution makes it difficult to determine which technology route is superior, but for now, the majority of automakers use a multi-sensor route.

Some professionals believe that blindly excluding non-visual sensors can easily lead to insufficient safety redundancy and increase the probability of system errors.

Strong Performance in the First Three Quarters, Falling Short of Delivery Guidance in the Fourth Quarter

Tianyancha shows that XPeng Motors successively listed on the US and Hong Kong stock markets in 2020 and 2021. According to data from Hithink RoyalFlush, since 2018, XPeng Motors has been mired in losses.

According to foreign media reports, Goldman Sachs pointed out in a research report at the end of 2023 that XPeng Motors' management believed that expanding sales volume was crucial in the current competitive environment, and the company would continue to prioritize sales volume and improve profitability by reducing costs.

At that time, the material cost of XPeng's Advanced Driver Assistance System (ADAS) was RMB 25,000, while competitors' costs ranged from RMB 20,000 to RMB 30,000. By reducing the number of sensors (including LiDAR and millimeter-wave radars), XPeng could effectively reduce these costs and gain an advantage in cost control.

According to Goldman Sachs' research report, XPeng's cost-cutting measures had already shown results at this stage. The selling price of the mid-term facelift version of the XPeng G9 was RMB 40,000 to RMB 50,000 lower than the original version, but with a higher profit margin.

Goldman Sachs predicted that the new models launched by XPeng in the second half of 2024 would reduce costs by 25% through technological innovation, resulting in higher profit margins.

Judging from the financial data disclosed by XPeng Motors in recent years, the company's automotive gross margin has significantly improved.

In the third quarter of 2023, XPeng's automotive gross margin was -6.1%, but just one quarter later, in the fourth quarter, it turned positive and reached 4.1%, a significant increase of 10.2 percentage points sequentially.

At that time, XPeng Motors stated in its financial report that the significant improvement in the company's automotive gross margin in that quarter was due to the initial success of its technical cost-reduction and operational improvement plans.

By the third quarter of 2025, XPeng achieved an automotive gross margin of 13.1%, an increase of 4.5 percentage points year-on-year but a decrease of 1.2 percentage points sequentially. XPeng explained that the sequential decrease was mainly due to product updates.

Along with the growth in automotive gross margin, XPeng Motors' overall performance also achieved remarkable results. The latest financial report shows that in the first three quarters of this year, the company's revenue surged by 119.96% year-on-year to RMB 54.466 billion, while the net loss significantly narrowed by 65.86% year-on-year to RMB 1.523 billion.

Focusing on the third quarter, XPeng Motors' performance remained impressive, with quarterly revenue reaching RMB 20.38 billion, a year-on-year increase of 101.8% and a sequential increase of 11.5%. The net loss was RMB 380 million, narrowing by nearly 80% from RMB 1.81 billion in the same period last year.

Gu Hongdi, Vice Chairman and Co-President of XPeng Motors, stated that with effective cost control and greater potential released from technology research and development-related revenue, the company's comprehensive gross margin exceeded 20% for the first time in the third quarter.

In fact, XPeng Motors' strong performance growth is inseparable from its outstanding delivery volume. In the third quarter of 2025, XPeng Motors went all out and delivered a total of 116,000 new vehicles, a year-on-year increase of 149.3%.

At the beginning of the new year, XPeng Motors disclosed its latest annual delivery data. In 2025, XPeng Motors delivered a total of 429,400 new vehicles, a year-on-year increase of 126%.

However, in the fourth quarter of last year, XPeng Motors delivered 116,200 new vehicles, falling short of the previously set fourth-quarter delivery guidance of 125,000 to 132,000 units.

It is worth mentioning that during the third-quarter financial results conference call last year, He Xiaopeng boldly stated, 'Our goal is to achieve break-even for the company in the fourth quarter of (2025).'

Now, as 2025 officially comes to a close, whether XPeng Motors can achieve this goal will soon be revealed.