Tuesday, May 28, 2024

Xpeng eyes slice of mass-market segment with launch of cheaper models

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Chinese premium electric-vehicle (EV) maker Xpeng plans to launch a mass-market brand in a month to challenge market leader BYD amid an escalating price war.
Models under this new brand will be fitted with autonomous driving systems and will be priced between 100,000 yuan (US$13,897) and 150,000 yuan, He Xiaopeng, the Guangzhou-based carmaker’s co-founder and CEO, said on Saturday. These EVs will cater to more budget-conscious consumers.

“We will launch a class A compact EV at a price range of between 100,000 yuan and 150,000 yuan, which will come with an advanced driver assistance system, for both the China and global markets,” He said during the China EV 100 Forum in Beijing, according to a video clip seen by the Post. “In future, cars with the same prices might be developed into fully-autonomous vehicles.”

Xpeng confirmed He’s remarks and said in a statement that the company envisions slashing the development and production costs of autonomous driving technology by 50 per cent this year. At present, Xpeng assembles smart EVs that are sold at more than 200,000 yuan.

BYD, the world’s largest EV builder, delivered 3.02 million pure electric and plug-in hybrid vehicles – most of them priced below 200,000 yuan – to customers at home and abroad in 2023, a year-on-year increase of 62.3 per cent. Exports accounted for 242,765 units, or 8 per cent of its total sales.

Premium EV makers are actively looking to grab a slice of the pie from BYD, said Eric Han, a senior manager at Suolei, an advisory firm in Shanghai. “The segment where EVs are priced from 100,000 yuan to 150,000 yuan is dominated by BYD, which has a variety of models targeting budget-conscious consumers,” Han said.

He Xiaopeng, Xpeng’s co-founder and CEO, attends a news conference ahead of the Shanghai Auto Show, in this file photo from April 2023. Photo: Reuters
In fact, Xpeng’s announcement follows on the heels of Shanghai-based Nio’s decision to launch cheaper models after BYD began cutting the prices of nearly all of its models in February to maintain its leading position. William Li, Nio’s CEO, said on Friday that the company will unveil details of its mass-market brand Onvo in May.

Xpeng’s move to occupy a lower price point also comes as China’s government doubles down on efforts to nurture the country’s EV industry.

The world’s automotive industry is making a “strategic transformation” towards electrification, Gou Ping, vice-chairman of the State-owned Assets Supervision and Administration Commission under the State Council, said during the forum.

Xpeng’s first right-hand drive EV to hit Hong Kong, SE Asia roads this year

To underscore the government’s push, the commission will conduct independent audits of electrification efforts made by China’s largest state-owned carmakers, said Zhang Yuzhuo, the commission’s chairman.

Last month, He told the company’s employees in a letter that Xpeng would spend a record 3.5 billion yuan this year to develop intelligent cars. Some of Xpeng’s existing production models, such as the G6 sport-utility vehicle, are capable of navigating their way automatically along city streets using the company’s Navigation Guided Pilot system. But human intervention is still required under many circumstances.

In August last year, Xpeng issued additional shares worth HK$5.84 billion (US$746.6 million) to pay for the EV assets of Didi Global and said at the time that it would launch a new brand, Mona, under a partnership with the Chinese ride-hailing firm in 2024.

Fitch Ratings warned last November that EV sales growth in mainland China could slow to 20 per cent this year, from 37 per cent in 2023, because of ­economic uncertainties and intensifying competition.

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