Author: Wang Hui

Introduction: “Grasp the direction in the headwind, be the petrel in the storm, be the lone star without changing colors.” – Yu Guangzhong

He XPeng was born in Huangshi, Hubei Province in 1977. He graduated from South China University of Technology in 1995. He co-founded UC Video with a team in 2004. After UC Video was merged into Alibaba in 2014, He XPeng successively served as the president of the Alibaba Mobile Business Group and the chairman of Alibaba Games.

In August 2017, He XPeng resigned from Alibaba and officially joined XPeng Motors as the chairman, starting his journey in the automobile industry.

As the doer persists, success will come eventually.

Regarding He XPeng’s career, the biggest question for most people after understanding his success in starting a business and leaving to start another is: what made him, who was already successful in the eyes of many, throw himself into difficult entrepreneurship again?

Like most people, after achieving success in starting a business, He XPeng did what he had always wanted to do but had previously been unable to do. However, he found that the joy brought by these new toys was quickly defeated by emptiness.

XPeng Motors is He XPeng’s second business venture. As early as 2004, he founded UC Browser and was a well-known product manager in the industry. This third-party mobile browser with the largest number of users worldwide was acquired by Alibaba for 4.3 billion US dollars in 2014, the largest acquisition in the history of the Chinese Internet at that time. He XPeng received over ten billion yuan in the acquisition and achieved financial freedom when he was 36 years old.

“After buying a few homes, I gave my parents each a home as well. In fact, on the day you achieve your goal, you will feel very painful. You don’t know what your next goal is, and you will feel empty and lost. After you have money, many people will ask the same question: what do you want to do next? I bought an ocean-going vessel and went fishing and swimming, exploring the ocean. This can indeed do some things that we couldn’t do before. But in reality, these are just new toys, in my opinion.” He XPeng revealed his thoughts in an interview on the show “Meeting Big Shots.”

After Alibaba acquired UC, He XPeng successively served as the president of the Alibaba Business Group and the chairman of Alibaba Games. However, he still felt empty and lost inside. At that time, he strongly suggested that Alibaba should manufacture cars but was not adopted.

“I had thought about this for a long time. The most important thing was that I still wanted to do something different rationally. When my first son was born, an investor called me and I impulsively agreed. Otherwise, he would ask in the future, ‘Dad, what did you do? What did you say?'”

You not only have to overcome failure, but also surpass success.# Translation

In search of the next big innovation in the digital age

According to He XPeng, it was already quite difficult to bring about a major innovation in the pure digital transformation of the internet. In China, many people who understand hardware are not well-versed in software, and many who understand software are not confident enough to venture into hardware. However, if He XPeng could couple these two aspects together and also have a certain level of resources, it would represent a new challenge, innovation, and reform.

Therefore, He XPeng, who was not content with the state of things, mobilized some old friends to form XPeng Motors, and in August 2017, he left Alibaba to devote himself entirely to his new venture.

In reality, XPeng Motors can sometimes be better understood as an internet company. However, it is also a company that has a deep understanding on how to manufacture cars and dismantling the logic of car production. It is a company that was born specifically for the development of new forces.

Hardship, then success

Entrepreneurship has never been easy, and XPeng Motors’ founding was no exception to this natural law. The entire company had to overcome not only technical obstacles, but also numerous hardships in reality. For example, the office location was far away, there was no air conditioning, the space was insufficient, and personnel was scarce.

“When I first joined XPeng Motors, it was very difficult. I lived near the company, and I had to save time because there was too much work every day. It was really hard, but then I just gritted my teeth and bore through it. In fact, I would make ironic comments to myself, saying that this is still slightly easier than the hardest moment during my previous startup experience. If you constantly make satirical comments, you will eventually adapt.”

At that time, the Huangpu district of Guangzhou gave XPeng Motors about three floors, but they were still just rough buildings. After very simple renovations, the company moved in. The location of the company was very remote, about an hour away from the city center, which made recruitment very difficult. Before that, the company was even further away.

As a leader, He XPeng knew well what role he should play, what he should do, and what he should not do at the beginning of XPeng Motors. He was always strict with himself.

“You must not be a little bit comfortable because it will create a sense of distance between you and the masses or between you and your classmates. Once that distance is created, they will feel that you are not in the same group as them. You must lead by example and be one of them.”

According to those around He XPeng, he maintained a strict routine every day. Usually, he started the day’s work by meditating. Most of the time, people could not tell that he was the boss because he was just like everyone else, eating in the cafeteria and not dressing up. Among the engineering students, he was not outstanding.

In addition to space and team issues, XPeng Motors has also been subject to criticism from the outside during its development. Elon Musk and He XPeng, both of whom can be considered representatives of the new energy vehicle forces in China and the United States respectively, have had a small tug-of-war on social media.This incident originated from a car show in Guangzhou. After introducing the latest generation of XPeng Motors P7, He XPeng wandered around the car show, unaware of the “overseas accusations” from Musk. During the car show, XPeng Motors announced the production of new cars and the upgrade of its autonomous driving and hardware systems. They also adopted the use of LiDAR technology to enhance the overall performance of the car, launching the world’s first mass-produced intelligent car equipped with LiDAR.

As soon as the news broke, people overseas were left puzzled and questioned why XPeng Motors would use LiDAR technology. Some commented, “I believe it will greatly improve accuracy, but it will seriously limit the scalability of their autonomous approach. Did they realize they can’t replicate Tesla’s approach?” Musk, who was secretly observing these comments, immediately questioned XPeng’s actions and made a fair comment on whether “XPeng copied Tesla’s source code”: this is only XPeng’s problem, and other companies did not do that. He also stated, “They have our old software version but not our neural network algorithm.”

Unable to bear such accusations, He XPeng wanted to refute them immediately, but his team pressed him down and promised to draft a statement for him to review. However, He XPeng did not think that politeness applied in this situation, and after seeing the statement written by the company, he became very angry, feeling like asking, “why be polite when they’ve gone so far.” He then posted a message on the platform, saying, “What I want to say is that rumors have long proven to be unable to beat any competitors. From next year on, be prepared to lose to us in China’s autonomous driving market. As for internationally, we will meet.”

Before this, Musk had also mocked the article “XPeng Motors’ independent research and development of autonomous driving technology allows it to maintain a low price,” and commented on a netizen, “XPeng Motors’ autonomous driving software is indeed our inspiration, but it is an old version of Tesla software, so its effect is limited.”

“This is a civil lawsuit, and it has nothing to do with us.” In January 2019, Musk sued a former Tesla employee, who was actually a former XPeng employee, who worked for the company for only about a week, but nobody cared, and the voices questioning XPeng Motors had already risen. Further explanations, whether right or wrong, seemed pale in front of the public, and it may have become a topic of discussion for others. For XPeng Motors, what they need to do is to strengthen their strength and prove themselves.In fact, XPeng He has always been open about his admiration for Musk, often expressing his love for him. While in Europe at the end of 2019, He XPeng discovered that Tesla had started selling cars in Europe at the end of 2010. “Musk is a person with many strengths and weaknesses. At the end of last year (2019) and the beginning of this year (2020), when I went to evaluate the situation in Europe, I found that Tesla had started in Europe in 2010. In 2009, Musk mortgaged his house for about $20-30 million to invest in the business. That was where he put all of his assets and fortune on the line, while we were still in our underwear. Others had already put their underwear on. That’s why I think China needs some entrepreneurs who have this kind of courage.”

Perseverance is the foundation, innovation is the path

As a leader in the automotive industry, the initial challenge for XPeng Motors was the integration of Internet thinking and automotive manufacturing, which was a major obstacle for the company.

In the process of making cars, touching one end will affect many other aspects. The electrification of the industry has directly changed the overall driving mode, but it also brings about cost, technical, safety, and other problems.

From its establishment to its IPO and market value of nearly 200 billion yuan (as of July 28, 2021), XPeng Motors has achieved these series of successes in just seven years, which is attributed to the clear “positioning” of XPeng Motors.

He XPeng said that when XPeng was just starting, there were several clear positions: The first was that they were making intelligent electric vehicles, not just electric vehicles. The second was the positioning of the main range. The third was that the R&D of a single car is three to four times that of other manufacturers, with about 1,000 people making one car. The fourth point is also a very important one, which is not to make small positioning, that is, how to solve the customer’s pain points and needs in what scenarios. This may be feasible in a stable industry, but in a market that is currently and will be in the future developing even more rapidly, long-term logic is very important for new players like XPeng Motors.

The “new” of new energy vehicles is not only reflected in the final products, but also in the transformation of the entire marketing system. XPeng Motors has explored several approaches, one of which is to self-sell but not to operate fully. Another approach is to solve the high education costs associated with intelligent electric vehicles through the process of seeding, incubation, and education. Lastly, He XPeng believes that in the future, dataization and the logical connection of online and offline data must be done well.In the next five to ten years, if car models form a monopoly similar to today’s smartphones, the proportion of online car purchases may be tens of times that of current car purchases. I believe that this change is unstoppable, and it poses both huge risks and opportunities for car companies like us. The integration of online and offline, data and physical entities, is what I think will be the next new trend.

On April 27, 2020, XPeng Motors launched its entire P7 series and announced the new car prices. On July 27, 2021, at the one-year anniversary celebration of the XPeng P7’s delivery, He XPeng said, “We started designing XPeng P7 in early 2017 and faced a lot of disbelief from many people, but now we have finally achieved it with thousands of P7s delivered every month.”

In July 2020, the XPeng P7 was delivered amidst much anticipation. In the just-ended September, XPeng Motors delivered a total of 10,412 vehicles, becoming the first new car force enterprise to announce monthly deliveries of over ten thousand vehicles, with 7,512 P7s delivered, and cumulative deliveries exceeded 50,000. He XPeng predicts that “the turning point for intelligent electric vehicles has arrived. By the fourth quarter of this year, XPeng Motors’ monthly peak delivery volume is expected to exceed 15,000 vehicles.”

With the P7 entering people’s homes, the outside world gradually recognizes this highly anticipated product as a benchmark in the same range. In China’s new power triad, each brand has its own label. NIO focuses on improving the user experience, Ideal emphasizes range-extending solutions, and the most important feature for XPeng is “intelligence.” In this year, XPeng P7 has demonstrated what it means to be a popular new power vehicle.

“I think the first product must be strong. Without a strong product, everything is meaningless. Therefore, we have done a lot of things around the product angle. The positioning, design, development, testing, production, and other aspects are one thing, but the later stages are also important, such as cultivating, sales, delivery, after-sales service, upgrade, operation, and charging. Second, we need to think about sales in a more long-term way. We emphasize the brand more than the lead, focus on high-end channels, and emphasize sales quality over quantity.”

A true new power company not only needs to innovate products but also needs to innovate the entire marketing model and think about the business system.

“I think we stumbled upon many obstacles and made many mistakes on our way. For example, I believe that if I put more emphasis on brand sales in 2018 and then on services and capital in 2019, there would be very different results this year. I think there are still many systemic issues that XPeng Motors has not addressed, including our brand system, service, supply chain, globalization system, thinking logic about talents, and many other deficiencies. That’s why the charm of a startup company is that things that seem impossible to achieve now can be taken to the next level in two or three years, and once feasibility is recognized, it’s deemed a step closer, while in fact, there are still several steps to go.”

When starting a brand, what is the most important aspect? Popularity? Connections? Technology? Capital? In the view of He XPeng, it is one’s mindset. One must have a balanced outlook in success and failure, and that is the most critical point.

In 2018, the China auto market saw a transition year, and the growth of new energy gradually slowed down, even showing negative growth. In 2019, all automotive brands experienced unexpected difficulties. He XPeng said, after experiencing the freezeout of the market in 2019, one will understand that danger can come at any time.

“If we are satisfied with ourselves and stop thinking further, our thoughts cannot reach far; if we remain in a peaceful environment, our aspirations cannot grow broader.”

“We must not think that we are so great that others think highly of us. The competition of tomorrow and the day after tomorrow has just begun, and we need to truly become great.” He needs everyone in the company to stay vigilant because success achieved so far is not enough. One day in November 2020, at an award ceremony, He XPeng couldn’t help telling a senior colleague in the automotive industry about their plight in 2019. He XPeng said that building cars is known to be a money-burning business, and capital can follow with enthusiasm, but it can also look at it cynically. Therefore, in this long-lasting start-up, it is more important to have a balanced mindset.

In the next four years, just as He XPeng hoped, XPeng Motors began to shine and successively launched two new cars, seizing the lead in the new energy automotive field. However, the development of new energy vehicles was explosive in 2020; in addition to waves of new forces emerging, more traditional automotive manufacturers are also rushing into new energy. They invested a larger amount of funds, and a more brutal round of competition has already begun.

He XPeng said that companies like theirs must run at breakneck speed. Every three months, he gathers middle and high-level executives to discuss company problems in groups. Usually, each group would discuss one issue for an hour and then present it on the spot. He XPeng listens more and speaks less but when he does speak, he is brutally honest.

He XPeng feels that he has actually encountered many successful entrepreneurs who are twenty to thirty years older than him, and most of them are very successful. Sadly, most of them are not willing to take out the bulk of their wealth to do something innovative but instead prefer to stick to the original system, especially in finance and insurance.”I envy their lifestyle. But at the same time, I do not envy it because it is not what I want. That’s why some people say that both Li Bin and I had a tough year in 2019. But compared to others, we were not that bad. Courage is an important component in the strategy of a company. I think many entrepreneurs lack sufficient courage. To be honest, having more wealth does not make sense to me. Investing all resources in creating something that has long-term and tremendous value to society is an excellent opportunity.

The pillar of success is perseverance. Climbing mountains does not stop because of difficulties but rather continues until it reaches the summit. The journey between reality and ideals remains the same. The path between darkness and success remains the same. Those who aim far must be prepared to wait. By foreseeing the future ahead, XPeng Motors can make better choices for itself, and it will last longer.”

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.