“15 yuan is the basic price for smart and electric cars”
On June 10, He XPeng, the chairman and CEO of XPeng Motors, stated at the 13th China Automotive Blue Book Forum held in Hefei that 15 yuan is the watershed for smart cars.
“If today a new company says, ‘I want to make a very smart car and keep the price at 100,000 yuan,’ I believe it is not possible to make a profit before 2025. It can produce and sell, but not to make a profit.”
“Xiaomi’s Lei Jun once said that according to Xiaomi’s survey, most users want a price range of 100,000 to 300,000 yuan. And 360’s Zhou Hongyi stated directly that he wants to make a smart car priced around 100,000 yuan.”
He XPeng also stated that the smart car era “will come faster than we imagine”. He believes that electric cars in first-tier cities are accelerating transformation, and that by 2025, the proportion of new smart cars in first-tier cities will exceed 60%, and that nationwide the proportion will exceed 35%.
XPeng G3 does not make a profit
He XPeng introduced the top 10 electric vehicle brands in China, with three selling above 250,000 yuan: Tesla, Nio, and XPeng, and two selling below 150,000 yuan.
“There are five companies that sell smart electric cars for less than 100,000 yuan, and we actually believe that they are electric cars.”
The average price of XPeng Motors’ cars exceeded 250,000 yuan this year. He XPeng said, “I believe that 150,000 yuan is the basic watershed for smart cars. In the field of smart cars, it is not possible to really do well without 150,000 yuan.”
Why?
He XPeng mentioned several reasons.
First, he believes that battery prices will not drop quickly, and at the same time, smart costs, and even the cost of high-level automated driving assistance, will be raised.
Second, he used XPeng G3 as an example. He introduced, “The price of XPeng G3, including subsidies and score income, has an average price of 200,000 yuan. This car was ranked first in Class A electric SUV in the first five months in China, but this car doesn’t make money, it’s even.”He suggested that even in 2025, if you want to create an intelligent car that can also make a profit, the minimum price will be 150,000 yuan. It’s impossible to make a highly intelligent car at a lower price point because the ability of intelligence is constantly advancing.
“To truly achieve intelligent development, I believe the main price range would be between 199,000 to 299,000 yuan, that is, between 200,000 and 300,000 yuan in the next two to three years.”
The Leap Forward of Intelligent Cars
Earlier, He XPeng had said that when 10% of new cars in first-tier Chinese cities were intelligent electric vehicles, there would be a leap forward in the sector.
This benchmark has already been reached.
In the fourth quarter of 2020, more than 10% of new car sales in Beijing, Shanghai, Guangzhou, Shenzhen, and Hangzhou were electric. “In the first quarter of this year, the number rose from 10% in the same period last year to 20% in first-tier cities.”
However, he emphasized that the proportion of intelligent cars is still lower than 10%, “Once intelligent vehicles account for 10% in first-tier cities, the leap will be much faster than we imagine.”
He predicted that by 2025, the proportion of intelligent and electric cars in first-tier Chinese cities will be 60%, of which intelligent cars will account for more than 50% of that total. And by 2028, the proportion of intelligent electric vehicles in first-tier cities will exceed 90%, and the national proportion will exceed 60%.
The Future of Intelligent Car Operations
In August 2018, He XPeng said at the XPENG Motors Brand Day that “The core of intelligent cars is in operation, not in manufacturing.”. This view has been criticized for suggesting that XPENG Motors manufacturing is not up to standard.
Three years later, He XPeng still maintains this position. “I believe that the future lies in operation.”
He believes that the foundation of operation is to create a new closed-loop organization and gene for software and hardware.
The reason why organization and gene are important is that the operation of intelligent cars is completely different from that of traditional cars and marketing.
He gave several examples of the operation of intelligent cars.
The first is OTA operation. “OTA will allow your car to be constantly updated like a mobile phone.”Secondly, there is closed-loop operation for data. “The closed-loop operation of this data is very extensive. For example, there are two important types of data in autonomous driving.” He said, the first is perception data. “Because we are doing global perception data fusion, XPeng this year will build a team of nearly a thousand people to do data annotation and operation. Because we have more than one million kilometers of data every month, we have more and more integrated data for perception and it becomes stronger.”
The second is map data. “You must have strong operation of map and high-precision map data, otherwise you cannot do well in such global competition. And these are not things that we used to consider purely in the hardware system.”
In addition, there are after-sales service operation, customer operation, and commercial operation. “In the next three to ten years, I think there will be a large amount of ecosystem operation. That is to say, how to achieve win-win situation for others in our company.”
Launching a brand-new concept of transportation tool in the second half of the year
XPeng Automobile has another company, XPeng Huitian, which is engaged in the development of ultra-low altitude flying cars.
At the conference, He XPeng revealed that the company is also laying out many other fields including the aviation field. “We will launch a brand-new concept of transportation tool in a new field in the second half of this year. We firmly believe that the vehicles of the future can both drive and fly.”
This article is a translation by ChatGPT of a Chinese report from 42HOW. If you have any questions about it, please email bd@42how.com.