Shocking! Eastern Car Makes Western Man Swear and Jump on the Streets.

After the 2020 Guangzhou Auto Show, He XPeng and Elon Musk had an online quarrel, with Musk accusing XPeng’s XPeng of stealing Tesla’s software.

However, Musk confidently claimed that even if XPeng got the software, they didn’t have Tesla’s latest neural network computer, and the “plagiarism” could only go so far. He XPeng immediately replied on social media, claiming to beat Tesla in the driver assistance field, leaving them unable to find a way around it.

This is the war between He XPeng and Musk, and also between XPeng NGP and Tesla NOA.

Tesla has been at the forefront of the smart electric car industry for many years, but Musk seems slightly unsettled facing an emerging new force from the East. Musk once made a classic statement about the market after fully automated driving: after the popularization of autonomous driving technology, the current car brands will go through a reshuffle, and companies that master core technologies will hold a 25% share of the market.

In Musk’s plan, Tesla should have been the leader who holds 25% of the market. However, XPeng, which has skyrocketed since its listing on the NASDAQ, continues to challenge Tesla in the driver assistance field, which is probably also where Musk is anxious.

To confront Tesla head-on, XPeng first needs to understand what “technical egalitarianism” means.

Tesla’s position in intelligent car market is equivalent to that of Apple in the smartphone market. Model 3 has lowered the cost of consumers’ access to the world’s top driver assistance technology to a price of 300,000 RMB, which is Tesla’s “technical egalitarianism” and an important reason why it has loyal fans all over the world.

Early in the “XPeng vs. Tesla” battle, the automotive media globally thought that this was a joke of a challenge that was outmatched. However, with the traffic already there, why wouldn’t they take the opportunity?

After the debut of XPeng P5, I finally understood XPeng’s company and their notion of “technical egalitarianism”. The reason why XPeng dared to challenge Tesla was perhaps because XPeng might be more dedicated to their vision.

Subverting the Market is the First Step to Start a New Journey.## Presale for XPeng P5 has begun, priced between 160,000 and 230,000 yuan. The highlight of this car is that it may be the first mass-produced car on the market equipped with LiDAR, which, together with XPeng X Pliot 3.5 system, Xavier high-performance computing platform, and advanced driving assistance map, achieves urban NGP functions. It remains unknown when XPeng P7 will be equipped with LiDAR.

The configuration of the low-end XPeng P5 surpasses that of the high-end XPeng P7, albeit briefly on the aspects of intelligent configuration (P7 will be redesigned and equipped with LiDAR at a later stage). This is seemingly a “disruptive” move in the automotive market made by XPeng, as no one has ever attempted this before.

In traditional car sales logic, configurations increase with the upward trajectory of the car’s positioning. The order in which new configurations are added follows the sequence of high-end, mid-range, and low-end. In the traditional car market, we only hear about “downgrade” and have never heard of “upgrade,” such as how Mercedes-Benz first equipped AR-HUD and naked-eye 3D instruments on the new S-class before considering downgrading the features to lower-end models.

From this incident we can see that the core concept of XPeng is that “intelligence” is the main plot, while the car model is the subplot. The development of intelligent ecology and the car model run parallel, and when the intelligent ecology reaches a critical point, car models that can be published and launched will be directly placed on the “intelligence” main plot, forming the product context of XPeng as a whole. Regarding this, I am willing to call XPeng a “pure intelligent car enterprise.”

However, XPeng’s move is highly challenging in terms of consumer acceptance and carries certain public opinion risks. After XPeng P5 was unveiled in April, users in the XPeng App community have already asked when P7 will be equipped with LiDAR. Although P7 will definitely have the same feature as P5, potential P7 users have already become anxious after P5 was unveiled, afraid that their car will be redesigned shortly after they purchase it, turning into an old model after only a few months.

Careful search reveals many similar feedback on the XPeng App, but they have all been buried by other posts.

I called XPeng’s sales team earlier and asked about the P7 upgrade since the P5 has better hardware. The salesman told me that there won’t be a P7 upgrade and the NGP feature of the P5 isn’t available to all users yet, and also the optional laser radar requires an additional fee. Nonetheless, he suggested that it’s still fine to buy the P7 now.

I felt that the salesman had a tough time dealing with this issue.

During the P5 communication conference held by XPeng on July 13th, Mr. Li Pengcheng, vice president of XPeng, briefly responded to the P5’s better hardware than the P7, stating that the market logic of cars will become more like that of mobile phones, with the newest models being more intelligent rather than the most expensive ones.

As the “Red Robe Master” Zhou Hongyi said: to enter an industry, one must overturn the industry. XPeng used an extreme and challenging method to demonstrate their concept of “technology equality” – technology-first regardless of positioning.

Using “single-point blasting” to deal with the intense competition in the new energy vehicle market, as more new carmakers and mobile phone manufacturers enter the market, the competition becomes more intense. “Intelligence” is the foundation of XPeng’s success, but they also need to put more effort into the overall product, after all, cars are still the carrier of their intelligent vision, and they can’t rely only on intelligence to create a blockbuster model.

In addition to the laser radar and X Pliot 3.5 system, the key product point that XPeng P5 emphasizes on is the “Third Intelligent Space” defined by the product manager.

Jiang Weizhong, Deputy General Manager of XPeng’s Product Planning Department, stated that in the XPeng P5, you can watch movies, sports, play games or sing karaoke; with one key or your voice, you can enter the sleep space and enjoy a comfortable rest at any time; you can even bring a drone and enjoy outdoor picnics and scenery around Beijing…

As a movable and versatile space, XPeng P5 expands entertainment, sleep, outdoor, and life experience, exploring 23 hours of diverse application scenarios.

“Space” and “Scene” are two key labels for XPeng P5, and its responsibility is not only to safely take users from point A to point B, but also to provide users with a comfortable space to do other things.“`
As a compact electric car targeting young people, the high expandable space and unique “standby” feature of XPeng P5 can provide a more comfortable experience for young people in the two major scenarios of lunch break and outings.

At this point, some people may question these product features, such as “how many people would choose to watch movies or TV shows in the car instead of going home?”, “Now it’s 996, who still takes a nap?”, “Isn’t it inconvenient to inflate the mattress every time and store it after use?” At first I also had similar doubts.

But for a new intelligent car maker, when intelligence develops to a certain stage, what other means do they have to improve the competitiveness of a product? I think the answer should be space. Perhaps the functions extended from space on XPeng P5 are indeed not very useful, but compared to practicality, XPeng P5 needs more topicality or a new “product selling point”.

If you study the current sales volume of the new energy vehicle market, you will find that in each sub-market, at most five products can stand out and become explosive models, and sales will show a cliff-like decline from the sixth place onwards.

Nowadays, there is almost no difference in basic technology among products in the automotive market, especially for the products of the new force of car makers that are highly homogenized. But why do some cars sell so well while others don’t sell at all? This problem lies in the market awareness of the product. Which cars do you think of first when considering buying an electric car? If you pursue service and experience, you may think of NIO, and if you are a milk dad, you will definitely think of LI ONE.

In front of these well-known products, many products of the same type have become cannon fodder. If consumers don’t even think of you when buying a car, it’s even more impossible to walk into a 4S store for a test drive.

So, what is XPeng’s label? Intelligence?

Intelligence is no longer the exclusive label of a certain car maker. Nowadays, if a car maker’s press conference does not mention the intelligence for two or three sentences, the press conference is basically useless.
“`Actually, XPeng Motors doesn’t have any particularly strong To C labels, but each of its products does. When mentioning XPeng G3, the first thing that comes to mind is its auto-parking feature, while P7 is noted for its excellent voice experience, which is also recognized in the industry. However, P5 also has these advantages, and the new label it introduces is the “intelligent third space”, which is the key feature that sets it apart in the fiercely competitive market.

Three products are the minimum number of products that can form a pattern, and P5 happens to be XPeng’s third product, indicating that its strategy is to create product labels with strong topical features to stand out in a market that is highly saturated.

In conclusion

Returning to the story of the “Hema Incident,” many people were confused as to why Jack Ma would go after a new entrant from the East, which at the time was just finding its footing and still had a long way to go before catching up with Tesla. Perhaps, it was only Elon Musk who saw the true potential of XPeng at that time…

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.