The Evolution of the Automotive Industry Chain in the EVC Trend – Introduction to the Media under the Trips of One Hundred People
Author: Zheng Wen
“Your personality is a mixture of wildness, romance, and restraint.”
Recently, He XPeng, the founder of XPeng Motors, appeared on a CCTV interview program, and his character was presented very clearly in a 30-minute conversation. Wu Bofan, a senior media person who was present, made an objective evaluation of He XPeng.
They say that the potential of an enterprise is limited by the vision of the helmsman, and the personality of the helmsman determines the culture of the enterprise accordingly.
XPeng Motors, this enterprise born in the trend of “electricity and intelligence” in the automotive industry, is a sample slice in the wave of new car-making. Through the guidance of He XPeng, the profile and vision of XPeng Motors will be revealed in front of the public, unveiling the mysteries.
Outsider Finds the Rules of the Game
Born in 1977, He XPeng is now embarking on his second entrepreneurship. When UC Youshi, his first entrepreneurial venture, was acquired by Alibaba, he achieved financial freedom.
However, He XPeng did not experience the unprecedented joy that he had expected, but felt empty. Thus, he began to seek greater value in life, which led him to the automotive industry.
After several years of hard work in the automotive industry, He XPeng realized that car-making is an art of balance. “Internet products aim for perfection, and when developing hardware and software products, we must consider balance and avoid any significant shortcomings. Therefore, the most difficult aspect of car-making today is to find a long-standing difference on the basis of balance.”
This is the simple and typical “barrel theory.”
Few people know that XPeng Motors’ first mass-produced vehicle was not G3, but a model called “DAVID 1.0,” which was unfortunately disappointing. “We felt that this car cannot represent our imagination of intelligent cars, so we didn’t launch it,” said He XPeng.
In fact, for a long time, XPeng Motors’ first vehicle, the G3, was within expectations and not surprising.
After a disappointing first launch, He XPeng reflected on his experience, and despite being a car-making outsider, he quickly learned the rules of the automotive industry and carefully considered how to build the brand’s strengths based on his own background in the Internet.
Bosch China’s President, Chen Yudong, once told a story, saying that he gave three suggestions to a new and promising car-making company, but the CEO did not listen to any of them, thinking that Bosch was merely a Tier 1 supplier trying to make money. However, he then spoke of He XPeng, saying that he had listened attentively to everything they talked about.On April 27, 2020, XPeng P7 was officially released after several years of exploration. XPeng focused on the direction of “intelligence” and used the “full-stack self-research” magic weapon to raise and fight high.
There are many companies that bring technology with a strong technological style when talking about “intelligence,” but companies like XPeng Motors that invest heavily are not too many.
The latest financial report shows that XPeng Motors’ R&D investment in the third quarter of 2021 reached as high as 1.26 billion yuan, higher than other new car forces. The cumulative R&D investment in the first three quarters reached 2.663 billion yuan, which is far ahead.
At 9:30 pm on August 27, 2020, XPeng Motors officially listed on the NYSE, and what He XPeng could hardly conceal his excitement. “I am really excited!” Standing in the center of the listing conference stage, he even didn’t know what to say, and some emotional words were said without the prepared speech in advance:
“We are going to be awesome, awesome, awesome”, “treat customers well”, “improve ourselves.”
As of the close, XPeng Motors’ first trading day rose by 41.47% compared to the issue price, with a market value of more than US $15 billion.
“Focus on self-research” is the key tag for XPeng Motors’ first trading day, and the market has enough confidence in Chinese intelligent automobile companies to support. XPeng Motors stated in an official news release.
Art of Balance
He XPeng’s “art of balance” is not achieved overnight. A comment on Zhihu said, “XPeng’s seven years is a self-consistent process that allows Internet thinking and car person identity to gradually become self-consistent.”
From the original repeated storms caused by rhetoric on the network to increasingly accurate predictions of the industry, they are all the results of his continuous self-renewal. XPeng Motors is the same, from the initial repeated setbacks to now, it has initially broken through the scale, brand, and quality barriers of the automotive industry.
From G3 to P7, to G3i, and then to P5, each “industry first” technology marks XPeng Motors’ technological advancement in the field of intelligence. XPeng Motors has firmly affixed the label of “intelligence” to its products.
P7 is specially designed for Chinese road conditions to develop an autonomous driving algorithm and a self-parking system that is most suitable for Chinese parking scenarios. In addition, XPeng Motors’ full-scenario voice system has brought the intelligent cabin system to a new level, one of which is precise control. P7 realizes full-scenario intelligent voice interaction, and 90% of self-developed applications can be operated by voice.
Regardless of the NGP (Navigation Guided Pilot) intelligent navigation assisted driving function introduced by P5, or the VPA-L cross-floor parking memory parking function brought by XPILOT3.5, the consumer experience of intelligent vehicles is constantly being improved.
“We have gone through almost seven years of autonomous driving R&D and three years of mass production practice with countless challenges. P5 can achieve autonomous driving within relatively reduced costs,” said He XPeng with an unhurried tone, showing his determination.
“This ability is extremely challenging,” he lamented.
In November 2021, XPeng Motors’ delivery volume increased to 15,613, achieving three consecutive months of deliveries exceeding 10,000 and a cumulative delivery volume of 82,155 vehicles in the first 11 months, making it one of the top runners in the new energy vehicle delivery chart.
Since its official delivery in 2019, XPeng Motors has achieved a cumulative delivery scale of 100,000 vehicles by October 2021. XPILOT 2.5’s penetration rate of intelligent assisted driving has reached 89.74%, especially with XPILOT 3.0 accounting for as much as 59.29%… This share even exceeded He XPeng’s expectations.
“If we can achieve the same penetration rate in high speed scenarios for NGP in cities, it is possible to trigger a qualitative change through quantitative changes,” said Wu Xinzhou, the Vice President of Autonomous Driving in XPeng Motors. XPILOT 4.0-equipped XPeng models are planned to achieve full-scene intelligent assisted driving in 2023; XPILOT 5.0 will achieve full redundancy in autonomous driving software and hardware architecture, moving towards true autonomous driving.
The Darkest Hour You Cannot See
In 2019, an article titled “William Li Bin, the most miserable man of 2019” went viral on the internet.
Witnessing the hardships of NIO, which had not yet grown into the leader of new energy vehicles, XPeng Motors was also facing similar difficult situations.
At that time, perhaps both Li Bin and He XPeng were under an atmosphere of “on the brink of collapse.”
He XPeng spoke out publicly: “As friends and peers, I support my brother Li Bin… Whether the outcome is favorable or otherwise, Rome was not built in a day… So I tell myself that today may be the lowest point of the industry, but it is also the starting point of a new journey. If we can persist firmly, we will see the dawn.”The following text is the translation of the original Markdown Chinese text into English Markdown text with HTML tags preserved. Only corrections and improvements are provided without any explanation.
These words are spoken to support Li Bin but in a way, they are also cheering for themselves by He XPeng.
As He XPeng himself reviewed, the second half of 2019 was a rather tough time. The industry didn’t approve of this matter too much, cash flow became increasingly tense, and market sales did not pick up. Everyone didn’t know whether they could make it through and whether they could survive till when things improved.
He XPeng admitted that he needed to convince himself first before he could convince his colleagues and investors.
“At that time, many investors had already talked about it and it seemed like it was almost 90% done, but when it came to the last half, they couldn’t make it. When you go to meet a lot of people, no one meets you because everyone knows you’re looking for financing and no one believes this can happen. Everyone thinks that you’re the last hope, and this kind of pain is excruciating.”
One day, He XPeng and Li Bin happened to both be in Hong Kong, chatting at the beach in the wee hours of the morning.
Li Bin helplessly said, “I’m already in the ICU and I’m about to die.” He XPeng comforted him half-heartedly and half-self-deprecatingly, “We’re not doing much better either, sitting at the entrance of the ICU, getting ready to go in.”
Despite the complaints, life still had to go on. They each shared their ways to save money, how to sell more cars, and even discussed whether it was possible to collaborate to reduce costs.
He XPeng said, “I hope NIO can make it through because it will be difficult for us if NIO can’t.”
For ordinary people, those who haven’t cried through long nights are not qualified to speak about life. For entrepreneurs, crying is useless. When the day dawns, they still have to make decisions and find a viable way forward for their companies.
Speaking of the past, He XPeng looked carefree. Because he knew that no one could share his pain, or even understand his pain. “The hardest thing for an entrepreneur is that no one can talk about it except for oneself. There is no other method.”
Fortunately, in this era of great change, the leaders of the few emerging automotive players who stand out can at least empathize with each other. He XPeng revealed that he, Li Bin, and Li Xiang had an unnamed WeChat group where the three of them cheered each other on and kept going together.
On November 13, 2019, XPeng Motors announced the successful signing of C-round financing with a total amount of 400 million US dollars. In the midst of a general market wait-and-see sentiment, the success of XPeng C-round financing undoubtedly heralded a glimmer of hope and at least demonstrated some positive attitude in the capital market.
Today’s XPeng Motors, though able to recall both bitterness and sweetness, is still far from the time to write down their accomplishments.# Small Steps, Big Dreams
In 2021, XPeng Motors sold the most cars and lost the most money on the “Xiaoli” platform. In response to the soul-searching question posed by renowned journalist Wu Bofan to He XPeng, “How do you balance competitiveness and profitability?”
He XPeng answered honestly that XPeng Motors put technology, design, scale, and profit into four quadrants, with profit being temporarily excluded.
“We will solve the gross margin in three to four years, but we are still on the road and cannot achieve balance in this aspect yet,” he said candidly.
Sometimes, the power of honesty is greater than we imagine. From the very beginning of car production, XPeng Motors has been subject to doubts and questions. They cannot bend the truth with countless lies just to appear perfect.
As He XPeng said, starting out, everyone asked, “Are you making cars with PPT? Can you build a car? Can you safely drive with your family on the highway? Can you sell 10,000 cars? Can you reach 100,000 cars…?”
Each question is a challenge, but also a milestone they must achieve.
“I think there is no need for any explanation. The best answer is to make it happen,” said He XPeng.
Today, XPeng Motors temporarily sits in a safe zone but is soon to face challenging times ahead.
“The next darkest period may be between the end of 2023 and 2025, when 2.0 car manufacturing companies release their third or fourth-generation products, globalization becomes more apparent, and self-driving technology becomes much better. That’s when the reshuffling process reappears.”
For the future, He XPeng is confident because XPeng Motors’ chosen path of “technology intelligence” is a globalized path.
“We found that all software and data must be built on hardware, so the huge opportunity I see today is the comprehensive ability of hardware and software integration, which has tremendous potential in the travel industry.”
Do Ordinary Things in an Extraordinary Way
“Doing software and hardware integration is a balancing act,” said Lei Jun, founder of Xiaomi, to He XPeng.
Today, He XPeng has gained a deeper understanding of this sentence, and a new balance has emerged across XPeng Motors’ various sectors.
In 2021, XPeng Motors completed a brand renewal that went beyond a logo change and led the company into a new era.”Xpeng cannot simply be considered as an intelligent automotive brand,” says He XPeng, founder of Xpeng. After seven years in business and standing at a new starting point, the label “automotive enterprise” can no longer encapsulate Xpeng’s vision. The company will continue to expand the boundaries of different fields as a more mature explorer.
“Of course, Xpeng’s name will not change. It represents not only a brand name, but also a responsibility,” solemnly said He XPeng.
A grand layout of future technology and a leading intelligent ecosystem is officially launched. A technology company with a clear layout for the future is emerging. For example, in the field of supercharging technology, Xpeng will become the first car manufacturer to mass-produce an 800V high-voltage silicon carbide platform. The next new SUV model G9 will introduce an 800V charging system. To fully utilize the potential of the 800V platform’s supercharging technology, Xpeng also released the first mass-produced 480kW high-voltage supercharger.
In this grand vision, in addition to 800V high-voltage SiC platform, 480kW supercharger, and XPILOT intelligent driving system related to intelligent electric vehicles, there are also products such as intelligent machine horses and sixth-generation flying cars that we cannot imagine.
The flying car is manufactured by Xpeng Huitian Co. Ltd., jointly invested by He XPeng and Xpeng. The fifth-generation flying car was released in 2021 and has safely test flown more than 15,000 times.
In fact, Porsche and Geely have also released flying car concepts, but they are all still in the concept stage. It’s well known that the significance of concept releases represents future trends and technological directions. Xpeng Huitian chooses to mass-produce flying cars in 2024.
“It’s far more than just autonomous driving and intelligent cabins, and there will be many aspects in the field of transportation transformation in the future. We have been exploring the possibility of future intelligent travel,” said He XPeng.
At this point, He XPeng’s magical ability to connect my thoughts to Liu Cixin’s science fiction world is astounding. Unlike fairy tales, the illusion of science fiction is often realized in reality.
For example, the Nautilus in Jules Verne’s “Twenty Thousand Leagues Under the Sea” became a real submarine, and the air transportation vehicle in “Five Weeks in a Balloon” was upgraded to an airplane…
If the world of science fiction arranges various possibilities of the future, like a pile of imaginative pebbles, for people to admire and play with, then perhaps entrepreneurs like He XPeng are the practitioners who bring “ideas based on civilization” into reality.
“I have always imagined that in the not-too-distant future, everyone should be able to enter the flying world.” In He XPeng’s vision, a new and lighter electric flying car will make many of the previously bound technologies accessible.After a short 30-minute conversation, the host Chen Weihong asked a question that Steve Jobs had once asked himself: “If today were the last day of my life, would I want to do what I am about to do today?”
He XPeng answered: “I would still adhere to everything that I have persisted in.”
After 7 years of establishment, XPeng Motors’ path has become clearer and more determined. And He XPeng, the “wild, restrained, and romantic” helmsman, will continue to lead it on a long voyage.
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.