According to the latest sales figures for emerging car brands in the Chinese market, while Li Auto secured the top spot in weekly sales, Leapmotor and AITO took second and third places, respectively.
What’s most surprising about this list is that XPeng Motors is nowhere to be found, meaning their sales have fallen out of the top ten for the week.
Is this the first time XPeng has dropped off the list this year? In weeks 30 and 31 of 2024. XPeng ranked 6th on the list, but this time it has completely dropped out.
From being part of the leading trio of new car-making forces, alongside NIO and Li Auto—known collectively as "WeiXiaoLi"—to now experiencing a decline in sales and widening the gap with NIO and Li Auto, XPeng Motors has taken just two years. In 2022. XPeng's sales were the lowest among "WeiXiaoLi," with around 120.000 vehicles delivered. In 2023. XPeng sold about 140.000 vehicles, an increase of 20.000 from 2022. but this was only 70% of their annual sales target.
In the first half of this year, XPeng delivered 52.028 smart electric vehicles, a 26% increase year-on-year, but only achieved 18.6% of their annual target. By comparison, in the first half of 2024. Li Auto sold 188.981 vehicles, up 35.8% year-on-year; NIO sold 87.426 vehicles, up 60.2% year-on-year; Leapmotor sold 86.696 vehicles, up 94.8% year-on-year; and NETA delivered 53.770 vehicles from January to June, down 13.9% year-on-year. XPeng’s sales in the first half of the year were overtaken by Leapmotor and NETA, and the gap with NIO and Li Auto is growing. Moreover, XPeng’s average selling price is much lower than that of NIO and Li Auto. Additionally, Xiaomi Auto and AITO are also emerging as strong competitors.
Since the poor sales of the XPeng G9 in August 2022. XPeng Motors has been in a slump. Therefore, XPeng’s drop out of the weekly top ten sales list is surprising, yet somehow expected.
The problem XPeng faces is that it can’t compete on price, struggles with smart driving technology, and is under significant financial pressure.
XPeng’s financial reports show that the company’s cumulative losses have exceeded 32.2 billion yuan. From 2018 to 2023. XPeng’s net losses were 1.399 billion yuan, 3.692 billion yuan, 2.732 billion yuan, 4.863 billion yuan, 9.139 billion yuan, and 10.376 billion yuan, respectively.
The high losses are related to substantial investments in research and development. From 2020 to 2023. XPeng’s R&D expenditures were 1.726 billion, 4.114 billion, 5.215 billion, and 5.277 billion yuan, respectively, totaling over 15 billion yuan in four years. To be fair, XPeng’s smart driving technology is definitely among the industry’s top tier, but this comes with significant financial costs. However, XPeng’s brand positioning is lower compared to Li Auto, NIO, and Huawei’s vehicles, which has led to their most expensive model, the XPeng X9. being priced at 359.800 to 399.800 yuan, lower than the flagship models of their competitors.
Of course, XPeng has tried to find solutions, such as launching the XPeng P7+, a cost-effective model using a vision-based approach and removing LiDAR, similar to Tesla’s strategy, which reportedly reduces hardware costs by 25%.
Additionally, XPeng is launching a new brand, MONA, priced between 100.000 and 180.000 yuan, set to be released in August this year. However, whether the MONA M03 can save XPeng Motors remains to be seen.
For instance, the 100.000 to 150.000 yuan car market is the most competitive, with fierce competition from brands like BYD and Geely, especially BYD, which is known for being extremely competitive in this price range. Whether the MONA M03 can withstand this competition and break through with its smart driving capabilities is still unknown.
Furthermore, while the vision-based smart driving solution reduces costs, applying this technology to models in the 150.000 yuan range puts significant pressure on XPeng’s cost control. Given XPeng’s past performance, their cost control ability isn’t particularly strong. Whether XPeng will have to make compromises on costs for the MONA M03. potentially reducing the car’s competitiveness, is another concern.
On the first day back at work after the 2024 Chinese New Year holiday, He Xiaopeng issued an internal warning: "This year marks the first year of 'bloody' competition among Chinese car brands, essentially the first year of an elimination round." He Xiaopeng’s warning was resounding—XPeng Motors is now at a point where it must go all out in the face of intense market competition and the emergence of new players like Xiaomi.
