Written by Xu Zhi

Edited by Wang Pan

Compared to the MONA M03 launch event at the end of August, many people believe that He Xiaopeng appeared more cheerful and energetic at the global debut of the P7+.

The previous event was a desperate battle against the odds, while this time it was a confident pursuit of victory.

In the first eight months of this year, Xpeng Motors struggled, selling a total of 77,000 vehicles, which is only 27.6% of its annual sales target of 280,000 vehicles. Financial reports show that in the first half of this year, Xpeng Motors generated revenue of 14.66 billion yuan with a net loss of 2.65 billion yuan.

Fortunately, the emergence of MONA M03 saved the day. In September, Xpeng delivered a total of 21,352 vehicles, with MONA M03 accounting for half of them, setting a new record for pure electric car deliveries among new energy vehicle (NEV) startups and finally allowing He Xiaopeng to declare at the P7+ launch event, "We have returned to the top of pure electric car sales among NEV startups."

While MONA M03 single-handedly pulled Xpeng back from the brink, it is undeniable that its groundbreaking pricing strategy was the most crucial factor in its success.

This poses a double-edged sword for Xpeng. While MONA M03 achieved a "curve overtaking" through its exceptional value for money, it also pushed the brand towards the low-end market. Many industry commentators believe that MONA M03 amounts to a quick fix that may lead Xpeng down the path of sacrificing quality for quantity.

The debut of P7+ can be seen as Xpeng's attempt to redeem its brand image: Xpeng is not just about value for money; it also upholds the values of youth, technology, and luxury.

MONA M03 Saves the Day

In the face of adversity, one must either advance or regress.

On its own, Xpeng's revenue and sales figures for this year are not bad, and even show significant growth compared to the same period last year. The problem lies in the rapid pace of progress made by its competitors.

According to data from the Yiche Ranking, from January to September 2024, Li Auto led the pack among NEV startups with 341,812 vehicles sold, followed by Wenjie with 289,206 vehicles. NIO, Leapmotor, and Zeekr ranked 3rd to 5th with 172,861, 149,281, and 142,873 vehicles sold, respectively.

In contrast, Xpeng, with an average monthly sales volume of around 10,000 vehicles, fell out of the top 10 NEV startups multiple times over several months. The issue now goes beyond simply falling behind Li Auto and NIO; even Leapmotor, which was previously not considered a direct competitor, has surpassed Xpeng, and NIOET also poses a threat. This company, which is increasingly distant from the first tier of NEV startups, may soon lose its position in the second tier as well.

In terms of profitability, Li Auto, which was the first to achieve profitability, needs no introduction. Although NIO's losses are higher than Xpeng's, it's important to note that part of NIO's investments go towards infrastructure such as its own charging and battery swapping stations, which are part of its long-term strategy for future growth.

MONA M03 arrived just in time as a "savior." Within one hour of its launch, pre-orders exceeded 10,000, and within 48 hours, they surpassed 30,000.

The reason for its success is simple: MONA M03 costs less than 120,000 yuan. What more could you ask for?

Products priced between 100,000 and 150,000 yuan have always been the domain of traditional automakers like BYD and Geely, which focus on value for money and are generally not associated with high-end intelligent driving capabilities. Xpeng's established brand power is a formidable force in this price range.

Moreover, MONA M03 offers everything that Xpeng stands for.

Firstly, it boasts a youthful and sporty design that holds its own against 200,000-yuan sedans. In terms of space, MONA M03 is comparable to mainstream B-segment sedans.

It also offers industry-leading intelligent driving capabilities. He Xiaopeng has repeatedly emphasized that MONA M03 boasts the strongest intelligent driving capabilities in its class.

The user profile of the first batch of MONA M03 owners released by Xpeng at the Chengdu Auto Show revealed that 55% of buyers were under 30 years old, many of whom were first-time car buyers.

It can be said that Xpeng has beaten Xiaomi to the punch in realizing the vision of "the first electric car for young people."

P7+ Allows Xpeng to "Walk on Two Legs"

The success of MONA M03 is a mixed blessing for Xpeng.

On the one hand, Xpeng has been an early adopter in the field of intelligent driving technology. Although deploying this technology in MONA M03 represents a "dimensional reduction" strategy, as more automakers catch up in this area, Xpeng's advantage will gradually diminish.

According to data from China Automotive Data and Analytics, in the first half of this year, BYD sold 846,700 vehicles priced between 100,000 and 200,000 yuan, accounting for 18% of the market share and establishing itself as the dominant player in the lower-end market. Yang Dongsheng, Dean of BYD's New Technology Institute, recently stated in an interview that BYD aims to make high-level intelligent driving capabilities accessible in low-end models within two years.

On the other hand, the low-price strategy mentioned earlier poses a more severe and urgent threat to Xpeng's brand image. While the more MONA M03 sells, the more it will boost profits, the "low-end" label will also become increasingly entrenched.

At this juncture, the debut of P7+ is particularly significant, as it redirects public attention away from MONA M03.

It is easier to move down the ladder than up, and it seems that Xpeng has long since made plans to have best-sellers in both the low-end and flagship markets. By adhering to the strategy of "walking on two legs," Xpeng aims to avoid being defined solely by MONA M03.

If MONA M03 is about volume, then P7+ is about flexing muscle.

As the purest embodiment of Xpeng's brand DNA, the P7 is undoubtedly Xpeng's flagship model. Upgrading the P7 based on its established user perception, rather than introducing an entirely new model, is a prudent and correct move for Xpeng at this juncture.

At the global debut of the P7+, He Xiaopeng once again emphasized the importance of "intelligence," stating, "In the next decade, Xpeng Motors aims to become a global AI automotive company."

Positioned as the world's first AI car, the P7+ is equipped with Xpeng's latest AI Hawk-Eye vision system, representing the pinnacle of Xpeng's intelligent driving capabilities. Paired with the AI Tianqi 5.4.0 system, it offers an AI driving experience that is not limited by road conditions or routes and enables XNGP activation from a standstill. He Xiaopeng noted that this feature will be immediately available upon delivery.

In terms of other upgrades, He Xiaopeng, who is not known for his eloquence, spared no effort in promoting the P7+'s attributes: "stunning looks," "unbeatable value for money," and "what others offer as high-end options comes standard with us." He also cited media and online comments such as "space monster" and "C-segment size, D-segment space, E-segment comfort."

Everything indicates that the highly anticipated P7+ must become the next best-seller – not only to boost sales and revenue but also to redeem Xpeng's brand image.

To avoid the pitfalls of MONA M03, He Xiaopeng announced that P7+ had passed inspections on October 1. "In fact, P7+ has already completed the production ramp-up phase. To allow customers to take delivery earlier, the factory is already preparing for increased production capacity. P7+ will definitely be another best-seller, and the earlier you place your order, the sooner you can take delivery," he said.

Xpeng's ambitions for P7+ extend beyond China. The company plans to launch P7+ as a flagship model in global markets, with its debut at the Paris Motor Show and the establishment of 35 sales outlets in France, with plans to expand to 55 outlets next year.

On the evening of October 14, He Xiaopeng announced at the Paris Motor Show that the pre-sale price of P7+ would start at 209,800 yuan. Following the industry practice for domestic NEVs, the official launch price is generally lower than the pre-sale price.

For the fully loaded P7+, this price is quite attractive.

Within just 1 hour and 48 minutes of pre-sales opening, orders for the Xpeng P7+ surpassed 30,000, setting a new record and validating Xpeng's strategy.

From MONA M03 to P7+, the emergence of two consecutive best-sellers has transformed Xpeng's development trajectory in the second half of the year, making it possible for the company to reclaim its position among the top tier of NEV startups.

While He Xiaopeng can breathe a sigh of relief for now, challenges remain, particularly in the field of intelligent driving, where competition is fierce.

Tesla's AI team has previously stated that its Full Self-Driving (FSD) capability is accelerating its entry into China, with plans to launch it in China and Europe in the first quarter of 2025. The outcome of this competition remains to be seen.