Text/Wang Huiying

Editor/Ma Jun

Xpeng Motors was once an outlier among the “WEIXIAOLI” trio.

In the early stages of the development of domestic new energy vehicles, while NIO and Li Auto focused on both R&D and marketing, Xpeng Motors specialized solely in R&D and was not adept at marketing or storytelling.

At the time, He Xiaopeng, CEO of Xpeng Motors, believed that "telling a good story is easy, but doing good work is difficult."

Over the past few years, as industry penetration has increased, the industry has transitioned from a blue ocean to a red ocean. Especially after Lei Jun entered the market with Xiaomi SU7, many domestic new energy manufacturers have come to realize that "even good wine needs no hiding."

At Xpeng Motors' 10th anniversary and MONA M03 launch event, He Xiaopeng, like Lei Jun, reminisced about the past: "Swimming in a sea of blood until the water turns blue."

At the global premiere of the Xpeng P7+, He Xiaopeng also deviated from his usual hardcore style and spoke brand jargon: full-series standard high-level intelligent driving, top-notch design, and "what is high-end for others is standard for us."

At Xpeng Motors' AI Tech Day on November 6, focusing on AI, Kunpeng's super electric system, Xpeng Turing AI intelligent driving, and self-developed Turing intelligent driving chips were unveiled. He Xiaopeng even directly proclaimed, "In the future, Xpeng Motors will become a global AI automaker."

Image source: Xpeng Motors' official Weibo

On November 7, the Xpeng P7+ was released, priced between 186,800 yuan and 218,800 yuan, directly competing with Xiaomi SU7's entry-level price. Regarding whether the Xpeng P7+ would compete for Xiaomi SU7 users, after the conference, He Xiaopeng told the media, "The Xpeng P7+ and Xiaomi SU7 are two different directions, both are allies, and Lei Jun is the elder brother."

Beyond the shift in marketing perspective, there is a more competitive industry and Xpeng is striving to increase sales.

With less than two months left before the end of 2024, according to progress, automakers need to complete more than 80% of their annual sales targets in the first 10 months to meet their annual KPIs. As of the end of October, only three automakers had achieved delivery completion rates exceeding 80%, with Li Auto and NIO achieving rates of 70%, while Xpeng was below 50%.

Over the past two months, Xpeng Motors has performed relatively well. After the explosion in sales of the Xpeng MONA M03 in September, the P7+ has taken over the momentum. However, order volume does not equate to on-time deliveries. In the next two months, Xpeng Motors must fully sprint to achieve its annual target and ensure timely deliveries.

More importantly, Xpeng Motors, which employs both extended-range and pure electric technologies, must launch more popular models to generate revenue and catch up with its competitors.

1. When will Xpeng's AI stories come to fruition?

'Technology changes the world.' At Xpeng Motors' AI Tech Day, He Xiaopeng frequently mentioned AI. Over the years, Xpeng Motors has been at the forefront of AI capabilities, and technology-driven is a distinguishing feature of Xpeng compared to its competitors.

At this AI Tech Day, He Xiaopeng set a new goal for Xpeng Motors for the next decade: Starting from this year, Xpeng Motors has clarified its development direction for the next ten years, namely, to become a global AI automaker."

The confidence behind this statement comes from Xpeng Motors' strong AI capabilities.

At the event, Xpeng Motors announced the goals and milestones for multiple technologies in three major areas: AI automobiles, AI robots, and flying cars.

Focusing on the three major areas of AI automobiles - battery, electric drive, and intelligent cockpit - Xpeng Motors unveiled the Kunpeng super electric system, Xpeng Turing AI intelligent driving system, and Xpeng Tianqi AIOS, among other new technical solutions.

The AI robot 'Iron' is equipped with multiple self-developed chips, supports end-to-end large models, has 15 movable degrees of freedom, and supports tactile feedback mimetic hands, making it more human-like.

In terms of flying cars, Xpeng Motors announced that the world's first mass-produced split-body flying car will make its global public debut flight at the China International Aviation and Aerospace Exhibition in November 2024 and officially start pre-sales in December.

Compared to AI robots and flying cars, new energy vehicles remain Xpeng Motors' focus, with autonomous driving technology receiving the most attention from the industry.

At the AI Tech Day, Xpeng Motors launched the Xpeng Turing AI intelligent driving system, including cloud-based large models, vehicle-end large models, AI chips, and underlying architectures.

With the training and enhancement of large model technology, an important action is that Xpeng Motors' intelligent driving technology replaces LiDAR with pure vision technology.

It should be noted that Xpeng Motors was the world's first automaker to mass-produce LiDAR, with the Xpeng P5 as the carrier. The successful integration of LiDAR enabled Xpeng Motors to achieve advanced functions such as city NGP pilot-assisted driving.

More interestingly, four years ago, He Xiaopeng and Elon Musk debated intelligent driving routes.

At the time, He Xiaopeng announced that LiDAR would be used to enhance intelligent driving performance, but Musk dismissed this, stating bluntly, "Only fools use LiDAR." He favored pure vision neural networks.

Faced with Musk's skepticism, He Xiaopeng vowed, "Starting next year, be prepared to be outperformed by us in autonomous driving in China. As for the international market, we will meet there."

Now, both have turned their attention to pure vision neural networks. "After the end-to-end large model is integrated into the vehicle, the system significantly increases the video information obtained through cameras." In He Xiaopeng's view, the current low-precision LiDAR "is far inferior to high-precision cameras."

By 2025, Xpeng Motors aims to achieve an L3+ level intelligent driving experience, requiring only one takeover per hundred kilometers. At the same time, He Xiaopeng also revealed progress on the L4 technology roadmap: Xpeng Motors is developing the Ultra model for the Robotaxi sector. Regarding the launch timeline, He Xiaopeng said, "Students currently enrolled in graduate school can keep an eye out. Maybe by the time you graduate, Xpeng's L4 will be available."

Amidst a series of AI stories, the market is undoubtedly more concerned about the timeline for the implementation of Xpeng Motors' AI technology. Xpeng Motors stated that this year, it has achieved end-to-end mass production, doubled the parameters of the vehicle-end large model, and currently improved the training efficiency of the cloud-based large model by 2.6 times.

As He Xiaopeng said, don't believe that AI can disrupt life overnight; it must progress gradually. As the industry enters a new round of competition, while investing real money, to build a high moat, Xpeng Motors must not only tell good AI stories but also present a clear implementation timeline and complete it on schedule.

2. What competitiveness does Xpeng Motors' EREV offer?

Driven by various AI technologies, Xpeng Motors has officially entered the new energy vehicle extended-range camp.

Xpeng Motors released the Kunpeng super electric system, focusing on the "one car, dual capabilities" strategy. The 'Kun' represents the super extended-range system, adopting the next-generation extended-range technology; the 'Peng' represents Xpeng Motors' long-standing pure electric system.

Rumors of Xpeng Motors entering the extended-range sector have been circulating for a long time. In mid-September this year, 36Kr reported that Xpeng Motors' first extended-range model was being fully developed, with mass production expected in the second half of 2025. The first extended-range model will be a large SUV, developed based on the G9 prototype, targeting the 200,000 yuan and above price range.

Now that the extended-range route has been set, Xpeng Motors has not yet revealed the specific model. Shifting from a pure electric route to developing extended-range models is a significant step for Xpeng Motors.

During the post-conference communication session, He Xiaopeng stated that he had been thinking about extended range for many years and believed that different technologies should be used to achieve different customer values. Pure electric vehicles still have shortcomings: in areas with slow energy infrastructure development, pure electric vehicles may not meet user needs; at the same time, pure electric vehicles can achieve a maximum range of 800 km, but if users want a range exceeding 1000 km, they need to switch to another energy source.

In other words, Xpeng Motors aims to attract more users with its extended-range models.

Looking at the extended-range electric vehicle market, many automakers such as Li Auto, AITO, and NIO have already established brand recognition. For Xpeng Motors to win the market, it is not meaningful to produce ordinary extended-range electric vehicles; instead, it must excel in performance and technology.

The emergence of extended range was originally intended to alleviate users' anxiety about electric vehicle range, so pure electric range is one of the most critical performance indicators. According to Xpeng Motors, the pure electric range of its extended-range models reaches 430 km, and the comprehensive range with a full tank and full battery exceeds 1400 km.

Furthermore, Xpeng Motors has released the latest motor technology, "Hybrid Silicon Carbide Coaxial Electric Drive," with a CLTC efficiency of 93.5%, claiming to be "the industry's first." In terms of batteries, the 5C supercharge AI battery can achieve "1 km per second of charging" and reach 80% charge in just 12 minutes.

Both CLTC and AI batteries are designed to make electric vehicles travel farther on a single charge, ultimately addressing range anxiety.

According to official information, the use of hybrid silicon carbide chips to enhance motor performance will be applied to super electric and pure electric models.

Generally speaking, electric vehicle motors and batteries occupy a large amount of space, affecting the riding experience. Xpeng Motors' new-generation hybrid silicon carbide coaxial electric drive is 30% smaller in volume and 7.5% lighter in weight compared to traditional motors, providing an extra punch of space for the rear seats.

It is worth mentioning that one issue with extended-range vehicles is the noise and vibration of the range extender. Xpeng Motors' Kunpeng range extender's noise and vibration when the motor intervenes under low battery conditions are only 1 decibel higher than that of a pure electric vehicle.

Thanks to AI technology support, Xpeng Motors' extended-range vehicles can recognize different steep and uneven road surfaces to select the optimal engine intervention time, reducing energy consumption spikes and power degradation during range extender depletion.

It can be said that, based on the Kunpeng super electric system and AI technology, Xpeng Motors strives to make the user experience of extended-range vehicles as close to that of pure electric vehicles as possible in terms of charging speed, range, driving experience, and battery degradation.

Image source: Xpeng Motors' official Weibo

The exploration of the extended-range route is underpinned by a highly competitive new energy vehicle market.

In fact, the extended-range route for new energy vehicles has been controversial for a long time, especially in the early stages of the industry when pure electric vehicles were the mainstream, and extended range was once questioned by the market as a sign of technological backwardness.

However, after market validation, extended-range vehicles have proven their popularity. In the new energy vehicle industry, the three major technological routes of pure electric, plug-in hybrid, and extended range each have their advantages, but from the perspective of alleviating users' range anxiety and reducing costs, the extended-range route is an advantageous option.

According to data from the China Association of Automobile Manufacturers, in the first nine months of 2024, 4.988 million pure electric vehicles were sold, a year-on-year increase of 11.6%; 3.328 million plug-in and extended-range hybrid vehicles were sold, a year-on-year increase of 84.2%.

Obviously, the extended-range camp has won over consumers, which may be why Xpeng Motors is preparing to enter the extended-range vehicle market, as Xpeng Motors also needs more popular models to drive sales growth.

3. How to achieve sales targets?

The fourth quarter of each year is often the most competitive time for automakers. Everyone accelerates to increase sales to ensure the completion of annual sales tasks.

At the beginning of this year, He Xiaopeng set a minimum annual sales target of 280,000 vehicles for Xpeng Motors in 2024, representing a doubling of growth compared to the actual sales volume of 140,000 vehicles in 2023. Currently, as of the end of October, Xpeng Motors has sold a cumulative total of 122,500 vehicles, with a year-to-date sales target completion rate of less than 50%.

In other words, in the next two months, Xpeng Motors needs to sell at least 160,000 vehicles to achieve its annual target.

Xpeng Motors is still some distance from its annual target, mainly due to sluggish sales of its main model, the Xpeng P7. This year, sales of the P7 have continued to decline, with a cumulative sales volume of only 13,000 units from January to September, including 1,242 units in September, a year-on-year decrease of 73.4% and a month-on-month decrease of 3.05%.

Image source: Xpeng Motors' official website

The weakness of the main model has led to a downturn in Xpeng Motors' overall sales. Since 2024, Xpeng Motors has had sales of less than 10,000 units for four consecutive months, once falling out of the top ten in the sales rankings of new forces.

With the poor performance of the Xpeng P7 in the first half of the year, Xpeng Motors must find new popular models in the second half. Capitalizing on the peak period of the "golden September and silver October," Xpeng Motors has maintained a good pace of launching popular models.

In September this year, Xpeng Motors set a new record for monthly deliveries, reaching 21,352 units, a year-on-year increase of 39% and a month-on-month increase of 52%.

Such good results are attributed to Xpeng Motors' newly popular model, the Xpeng MONA M03. Launched on August 27 with a starting price of 119,800 yuan, according to official Xpeng Motors data, the MONA M03 delivered over 10,000 units in its first month, setting a new record for the first-month delivery volume of a new force pure electric sedan.

Building on this momentum, at the Paris Motor Show in October, Xpeng Motors' executive-class sedan, the P7+, became another top seller. On the day of pre-sales, within 1 hour and 48 minutes of the P7+ pre-sales launch, order volume exceeded 30,000 units.

On November 7, the Xpeng P7+ was officially launched, priced from 186,800 yuan. Xpeng Motors announced that as of 24:00 on November 7, the P7+ had received 31,528 firm orders, breaking all previous Xpeng Motors records.

For Xpeng Motors, the successive launches of the MONA M03 and P7+ and the introduction of these two popular models can be seen as a turning point in Xpeng Motors' sales, but challenges also accompany this.

Model sales are like "opening blind boxes." After the launch of a new model, delivery capacity becomes the biggest test for automakers. Previously, the MONA M03 experienced delayed deliveries, and now with the P7+ experiencing another surge in orders, Xpeng Motors' production and delivery will face a dual test.

At yesterday's Xpeng P7+ launch event, He Xiaopeng bluntly stated, "The Xpeng MONA sold out, and I've been heavily criticized by car owners. I sincerely apologize." To address the delayed delivery issue of the MONA M03 model, the factory will increase production capacity by 30%-40% in November and December.

Xpeng MONA M03, image source: Xpeng Motors' official website

It is worth noting that, to reduce user dissatisfaction with automakers' "one-year, three-generation" product planning, at the AI Tech Day, Xpeng Motors innovatively proposed a "user crowdfunding chip replacement" plan, allowing previous hardware and models to potentially achieve new vehicle capabilities through paid upgrades.

According to the plan, existing users can pay to upgrade their in-vehicle chips, with single Orin models upgradable to dual Orin chips and 820A models upgradable to 8295 chips, gaining advanced assisted driving functions such as city NGP and AI valet parking, with intelligent assisted driving capabilities iterating with OTA updates.

It is foreseeable that as long as delivery capacity keeps up, driven by the MONA M03 and P7+, Xpeng Motors' sales will maintain a good momentum in the coming months, potentially achieving a breakthrough in delivery volumes.

He Xiaopeng once mentioned that 2024-2027 will be a year of elimination for Chinese automakers, with fierce competition but also impending stabilization. Before the industry stabilizes, it is a fact that the industry has entered a red ocean. Xpeng Motors aims to regain what it has lost by launching more new models, entering the extended-range sector, and telling AI stories.

(The header image of this article is sourced from Xpeng Motors' official WeChat public account.)