Author: Feng Jingang
Introduction: After reaching the peak of new forces, XPeng has realized his new mission and launched a new exploration towards higher, farther, and wider directions.
Recently, XPeng’s popularity has not declined. Not only did he conduct brand rejuvenation for the first time in 7 years since establishment, and positively responded to the renaming issue, but he also globally debuted the fourth car- a mid-to-large-sized intelligent electric SUV G9 at the Guangzhou Auto Show, engaging in positive PK competition with NIO and Ideal. These two events are not unrelated, as they both revolve around XPeng’s upward brand.
Let’s turn back time to December 2018 when XPeng released its first car, the G3. Although the G3 laid a solid foundation for XPeng’s brand development and basic system strength, it also temporarily put XPeng’s brand at the mid-end market, one step lower than the high-end market where NIO and IDEAL reside. Such a brand gap is not something XPeng wants to see, nor is it a current reality.
Because, with rapid development in the past three years, XPeng’s overall strength has skyrocketed, and it is no longer inferior to the aforementioned two new forces. In particular, in terms of the core intelligent technology and application aspects of intelligent electric vehicles, XPeng is even more competitive. Furthermore, the successful sales of P7, hitting a maximum selling price of over ¥400,000 and monthly sales of 7,000 units, also implicitly suggests that XPeng’s brand power can challenge NIO and IDEAL directly.
In the just passed October, XPeng’s delivery volume hit the ten-thousand mark in consecutive months, becoming the only new force with a delivery volume of over ten thousand for that month, and thereby reaching the top of the new forces. Looking into the foreseeable future, it is not easy for other new forces to surpass XPeng. Therefore, XPeng has actually become the new leader of the new forces.
He XPeng said, “In just 7 years, XPeng’s brand has grown into the leader of China’s intelligent automobile industry. As the only full-stack self-developed automobile brand in China’s intelligent field, we choose to rejuvenate our brand at this moment to continue to lead in intelligent travel and explore beyond the frontiers of the times.”
Whether it is from technological leadership or market leadership, XPeng’s upward brand launch has now become a natural development.
On this point, we have also heard some voices.
“If NIO doesn’t work harder, XPeng will pull further ahead.” During the Guangzhou Auto Show, a NIO customer complained while looking at the stunning G9. In his mind, the G9 has a significant weight, surpassing even the ES8, and XPeng’s brand power has become equivalent to NIO’s. This user’s feedback may be biased, but neither can we ensure that this kind of voice won’t become a trend.
This kind of change is worth paying attention to. With the arrival of G9 and brand rejuvenation, the brand power – the most obvious weakness of XPeng Motors will be compensated. A brand new XPeng brand image emerges. Can we call XPeng “The Chinese Tesla”? Perhaps it is not appropriate, but XPeng is undoubtedly China’s strongest new force, which means it will lead China’s new forces to achieve higher achievements.
XPeng also realizes its new mission, so it chooses to launch a brand new exploration towards higher, farther and broader direction. From then on, the development of China’s new forces has turned over a new page.
Why is XPeng the leader?
Indeed, XPeng stands out as a new force, which is surprising. Because no matter from the impression XPeng brand gave us when it was founded or when G3 was released, including the initial performance of G3, XPeng’s impression was mediocre. Although P7 exploded later, XPeng was still catching up with NIO and Ideai. It was not until the third quarter of this year that XPeng showed its king-like position.
If it is only because of the addition of a new model, P5, that allows XPeng to take the first place in new force sales, this is not meaningful. The key is that G3 and P7, two “old cars”, have reached new heights, and it has nothing to do with P5. For example, the monthly sales volume of G3 has risen from 500 units to 2,000 units, even up to 3,000 units, and the monthly sales volume of P7 has risen from 4,000 units to 7,000 units. It is not easy or simple to have an increasing sales volume of middle and high-end intelligent electric vehicles.
Therefore, it is not difficult to see that although P5 has started small-scale delivery, G3 and P7, two “old cars”, will still send XPeng to the first place in the new energy vehicle market, and once P5 deliveries are normalized, it means that XPeng’s monthly sales volume will reach a new high.
At the third-quarter earnings conference, He XPeng expected that XPeng’s total delivery in the fourth quarter would reach 34,500-36,500 vehicles. In other words, the average monthly delivery of XPeng in October-December is approximately 11,500-12,166, and the key point is that it still maintains a monthly delivery of over ten thousand vehicles. According to XPeng’s prediction, after the blessing of P5, XPeng’s monthly delivery volume is expected to reach a new high of 15,000 vehicles.
So the question arises, from being underestimated at that time to the present excellence, why XPeng can burst out such strong power, and what magic does it have? Not only can it make “old cars” shine, but it can also continue to create hot-selling models?
In XPeng’s words, XPeng has been deeply cultivating the intelligent electric vehicle market for 7 years and has finally entered the harvest period.
From the perspective of results, as XPeng said, from being unrecognized to becoming recognized as the future of intelligent electric vehicles, XPeng’s role in promoting the development of intelligent electric vehicles is indispensable. After 7 years of deep cultivation, he has reaped the benefits ahead of time, which is only natural.
From a process perspective, it is that XPeng has taken a difficult but correct path.
In 2015, the first year of new energy in China officially arrived. At that time, driven by the vigorous promotion of new energy subsidies, there were more than 100 new energy brands, not to mention traditional brands entering the new energy market.
As subsidies dwindled, the new energy market transformed, and breakthrough newcomers such as XPeng, NIO, IDEAL, and BYD, relying on plug-in hybrids, emerged as the leaders of the intelligent electric vehicle race.
This unexpected result shouldn’t really come as a surprise upon closer consideration, however. In essence, the starting point for traditional brands making new energy vehicles is subsidies, with the resulting products only designed for the market. Meanwhile, the starting point for new brands is to truly start from the “new four modernizations,” with consumer demand as the core, which leads to the development of internet cars (now evolved into intelligent electric cars).
When we analyze the explosion of intelligent electric vehicles and the trend behind it, it is actually based on the core of the real needs of consumers and the creation of an ecosystem that includes product definition, rechargeable energy system, intelligent selling points, marketing services, etc., forming a closed-loop logic.
What is important is that under this closed-loop logic, even without a market, it can create a market, which is the current pattern of intelligent electric vehicles.
Based on this internal force, let’s take a closer look at XPeng’s recent actions.
During the third-quarter earnings report, XPeng revealed two key pieces of data: as of September 30, 2021, XPeng has expanded its brand’s supercharging stations to 439, covering 121 cities. 99% of the total amount of P7 delivered in Q3 2021 can support XPILOT 2.5 or XPILOT 3.0.
Many people do not understand the significance of these two pieces of data. In fact, the meaning behind these two pieces of data is the core of the continued hot sales of XPeng’s intelligent electric vehicle products.
From the essence, intelligent electric vehicles consist of two parts: intelligent and electric. So, how to make consumers choose your intelligent electric vehicles? The answer is not difficult to answer, naturally it is to eliminate the pain points of electric vehicles, and enhance the selling point of intelligence.
The reason why car companies build private charging stations is fundamentally because the experience of public charging is poor. By solving users’ range anxiety and improving charging convenience on their own, car companies can remove the pain points that make it difficult for electric vehicles to become popular, and even create a protective barrier. Compared to other brands that do not build private charging stations, their competitiveness will be greatly enhanced.
In addition to Tesla and XPeng, brands such as Porsche, Volkswagen, BMW, and NETA are also seeking to build their own charging networks. Of course, there are countless brands that are still struggling.
Once supercharging becomes large-scale, in the long run, it can also give feedback to the product definition of car companies: there is no need to pursue ultra-high range, (the best-selling Tesla model has a range of no more than 500 kilometers), because your users no longer have range anxiety. This can allow car companies to relatively reduce the cost of the electric part in the product, and release this cost to the intelligent part, further increasing their competitiveness and achieving the survival of the fittest.
If the future of electrification will eventually be assimilated, then opening up differentiation through intelligence will be the core competitiveness of future car companies. Therefore, the intelligent part is undoubtedly the battleground of the future automobile industry.
XPeng’s intelligence, whether it is in terms of technology, application, or advocating for the establishment of high-speed access standards, the priority use of high-speed/urban NGP, and assisted driving exams, is in an absolute leading position in China. It has even formed a reputation and brand premium, which is the biggest factor making other users admire and other car companies envy.
Therefore, the continuous hot sales and becoming the banner of the new forces of XPeng Motors are inseparable from its pragmatic and effective management and ultra-strong product power. The two most core points are: firstly, through the XPeng supercharging system, it solves the difficult problem of popularizing electric vehicles by eliminating the range anxiety problem that is larger than other vehicles in the same class; secondly, its intelligent selling point is in a leading position, and the brand premium is outstanding. It is precisely this double-spiral product power that propels XPeng to continue moving forward and upward.
At the same time, if there are more XPeng supercharging stations and the intelligent attributes become more prominent, this closed-loop logic will gradually become more perfect, and in turn will drive the overall improvement of XPeng’s product power. This is also why the sales of G3 and P7 continue to increase, because through this closed-loop mechanism, their competitiveness is also constantly improving, and their sales naturally increase.##
This year at the Guangzhou Auto Show, XPeng unveiled its fourth car, the G9. Though they haven’t announced the range, they’ve revealed that it will utilize an 800V system and feature the updated XPILOT 4.0 smart driver-assist system. Behind these key details is XPeng’s cleverly crafted strategy. The G9 is clearly XPeng’s upward trajectory in their brand, yet we haven’t seen any negative feedback. Instead, we’ve heard things like, “the biggest surprise of the show.”
With a more significant market share, sales foundation, XPeng is in a position to break through the new forces. Once they’ve broken through, they can offset their weaknesses and open up to higher ambitions.
On November 18, a day before the Guangzhou Auto Show, XPeng held their brand renewal event to update their logo, redefine brand values, and more. Though the brand’s core technology continues to sell well, have breakthroughs and sustain their smart electric circulation logic, brand recognition continues to be a major obstacle.
However, we don’t believe this to be the case. So what elements contribute to brand power for a new market? Is the brand more important than the product to consumers? Although the market has shown different answers, there isn’t a consensus. Furthermore, the opposite side of a brand is its accumulation, a testament to time. So currently, it’s not accurate to consider XPeng’s brand as a weak point.
As for the name, fundamentally XPeng’s brand value isn’t sufficient yet, but it’s not a gimmick name as XPeng stated, it’s ordinary, and therefore it can’t form a beautiful response in the user’s mind. But is this important? At least compared to robust product features, the name isn’t a key factor.
In XPeng’s words, using his name as the brand name is a form of recognition, responsibility, credibility, showing confidence in culture, and branding of an enterprise, through its innovation, operation, services, and everything else.
To give an example, naming a car enterprise after the founder isn’t tailored to small businesses. It’s been used in several car brands, including Toyota, Porsche, Mercedes-Benz, to name a few. So using XPeng as the brand name isn’t an issue and doesn’t need to be changed.
Thus, the core of the brand renewal is to re-emphasize XPeng’s brand definition: to dare to explore. The exploration has a broad meaning and includes product forms like intelligent electric cars, flying cars, iron horses machines, market regions like the China market or overseas market, and niche markets like luxury markets, young markets, Robotaxis, etc.Based on the achievements that XPeng has made in the intelligent electric vehicle market, the accumulated experience, the construction of enterprise system strength, and the impact on the industry breakthroughs…XPeng explores other fields. Although the future is uncertain, the attitude of daring to try is commendable.
Afterall, the intelligent electric vehicle market has huge potential for Chinese brands. And behind intelligent electric vehicles is the fourth industrial revolution. There is no better time to compete than now.
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.