Among the new players in the automotive industry, Li Xiang can be considered a competent businessman—he builds what the market demands, easily navigating the ever-changing automotive landscape. On the other hand, XPeng Motors seems to have fixated on one idea: the belief that pure electric vehicles are the future. The company has solely focused on the pure electric vehicle sector, yet all six models currently on sale have performed poorly in terms of sales.
Reflecting back on 2021. it was a peak moment for XPeng Motors. In September of that year, it became the first new carmaker to surpass 10.000 monthly sales. Fast forward to July of this year, XPeng's sales reached only 11.145 units. In what has been a golden period of explosive growth for new energy vehicles, XPeng has essentially remained stagnant over the past three years.
Founded in 2014. XPeng Motors is now 10 years old but still hasn’t matured. So, what is holding XPeng back? Is it the market environment, or is XPeng entangling itself in its own issues?
As a typical internet-based carmaker, XPeng Motors initially had a smooth start. Founded in 2014. it delivered its first models by 2018. In an era when the automotive supply chain was not yet fully established, XPeng managed to carve out a niche in the market through its strong execution.
By 2020. when many new carmakers were still in their infancy and even current industry leader BYD was in the early stages of its rise, XPeng launched its P7 model. This car was highly advanced for its time, featuring a coupe body style, professional electrification architecture, an all-wheel-drive system, the Xavier autonomous driving platform, and a groundbreaking range of over 700 kilometers. In the same year, XPeng successfully listed on the U.S. stock market, a clear indication that investors had high expectations for the company.
XPeng's early success was evident, but perhaps it was this smooth ride that left the team untested and overly confident. Combined with a complex organizational structure, this led to frequent discord among the various teams within the company. To some extent, this resulted in supply chain issues and a lack of clear market positioning.
On the supply chain front, XPeng was one of the first new carmakers to partner with CATL. However, problems arose when XPeng delayed the development of new models by several months, missing the prime market window. After switching battery suppliers, the company faced significant consumer skepticism.
Additionally, for a long period, XPeng lacked senior management with expertise in automotive hardware, even failing to grasp the cost of seats. These issues culminated in delays for the XPeng G9 due to battery problems, and for the G6 due to insufficient production capacity of integrated die-cast parts and LiDAR. Despite significant spending, the company failed to prioritize its supply chain, leaving consumers to bear the brunt.
What’s more problematic is XPeng's fragmented approach to vehicle design. The designs of its sedans, SUVs, and MPVs are all handled separately, without a unified family style. The so-called "innovations" have only driven up production costs while making the vehicles increasingly unattractive—who would want that?
From a market perspective, Tesla currently leads the pure electric vehicle market. Other new carmakers, in a bid to survive, have diversified their strategies, focusing on range-extending and plug-in hybrid vehicles. XPeng, however, has remained stubbornly committed to the pure electric field and has even claimed to view Tesla as its only competitor, releasing a series of "high-tech" features. In reality, though, most consumers are unwilling to pay for these so-called innovations. Now, with competitors like AITO entering the fray, even fewer consumers are choosing XPeng for its smart driving features and technology.
In conclusion, consumers want practical and reliable automotive products. No matter how much XPeng talks about ideals and technological concepts, it's all just self-talk unless it translates into tangible products. Over the years, XPeng Motors has consistently lacked a compelling reason for consumers to spend big money on its products.
