Introduction: Channel reorganization, re-establishment of brand tone, redistribution of R&D resources, and further enhancement of organizational system are the key areas that XPeng Motors urgently needs to improve in 2022.
It seems that new forces in the auto industry are deeply rooted in the wave of technology. Many PPT-based car manufacturers disappeared with the downturn of the technology wave in 2018 and 2019, including companies focused on autonomous driving. In 2021, with the funding boom of autonomous driving technology companies, new forces such as XPeng, Wei and Ideal have started delivery competitions, especially the top-ranked XPeng, who seems to have seen the dawn of victory.
With crowds cheering for XPeng, victory seems to be within reach. Is this really the case? Obviously not. After a year of intensive attacks, XPeng’s weaknesses have been revealed. Failure to strengthen these areas in a timely manner may have a significant impact on the future performance of the company. Therefore, channel reorganization, re-establishment of brand tone, redistribution of R&D resources, and further enhancement of organizational system are the key areas that XPeng Motors urgently needs to improve in 2022.
The Throne of New Forces
Many founders of new forces in the auto industry, born in the 1980s and 1990s, are bold and aggressive, just like the generation born after 2000. He XPeng, a computer programmer, is a top player in this group, and this determines the tone of XPeng Motors: Although XPeng pioneered sensational UC title and clickbait content, XPeng Motors is the new force that is most similar to traditional automakers among top players. XPeng Motors does not have too many elaborate customer operations, and especially influenced by Mr. Lei Jun, the founder of Xiaomi, XPeng seems to have chosen the most difficult path among three top companies in terms of route selection: NIO and Ideal chose to focus on luxury high-end segments, while XPeng chose to go all in on the mainstream mid-range pure EV models.
If the flag can stand up, high-end cars definitely mean high profit margins. However, XPeng chose to dive into the red sea market and face the hardships of developing the customer EV market, and face the mass-market gasoline vehicles at the same price level. After enduring the tough times, XPeng has also proved that the mainstream market can achieve scale more quickly.
# Initial Layout
XPeng’s G3 (entry-level SUV) is priced between 150,000 to 200,000 yuan, P5 (national sedan) is priced between 150,000 to 220,000 yuan, and P7 (coupe) is priced between 220,000 to 400,000 yuan. According to the pyramid theory, the sales volume of these models is bound to be much greater than the likes of NIO and Ideanomics costing three to four hundred thousand or four to five hundred thousand. When XPeng’s G9 stands firm and takes a slice of NIO and Ideanomics’ cake, XPeng’s lead may be even greater. In the coming years, it is highly probable that NIO, XPeng, and Ideanomics will dominate the market. However, XPeng’s delivery throne should be secure.
XPeng’s self-proclaimed goal is to explore technology, lead the future changes of travel, and create a more convenient and enjoyable travel life for humanity with science and technology! In 2021, XPeng’s blueprint is beginning to take shape.
As for the models, the G3 entry-level SUV, national sedan P5, and coupe P7 have initially opened up the territories and laid the foundation, and the high-end SUV G9 that breaks through the upper limit is beginning to take shape and will be launched in the heavy-hitting year of 2022. (In my personal opinion, XPeng should launch the G1 costing 80,000 to 100,000 yuan early on, preferably followed by the G0 costing 30,000 to 50,000 yuan. In this way, the GDP models covering high, medium, and low-end markets will all be in place, and XPeng can claim absolute success).
Intelligence has always been XPeng’s hallmark. Overall, XPILOT has received good market reviews from automatic parking to high-speed NGP when various versions were launched, and has been a powerful tool for XPeng to conquer new territories. CEO of XPeng, He XPeng, previously announced on Technology Day that XPeng will become the first Chinese automaker to explore automatic driving and travel operations, which means that Robotaxi based on XPeng’s models will land in 2022.
XPeng’s intelligent route has been clearly arranged from XPILOT 3.5 to subsequent 4.0, 5.0, high-speed NGP to urban NGP, from consumer-grade mass production cars to Robotaxi operation.
Flying cars, XPeng Huitian has already reached its sixth iteration, and the latest news is that it will be priced at under 1 million yuan and launched in 2024. It is commonly believed in the industry that flying cars may be XPeng’s obsession, and we do not know if it is motivated by a neglected yacht parked at home (hand dog head)! But XPeng’s level is definitely not attainable by the vast majority of people. Will flying cars be the F1 of the new era of cars?
Although it is unlikely for the F1 to become a high-volume model, the technology competition of flying cars will undoubtedly raise a banner for XPeng, just like how the success of the ES8 owes greatly to the story of EP9 being the fastest electric car on the track in Germany.
Organizational Depth Needs to be Strengthened
In 2021, XPeng Auto still has many gaps that need to be filled, such as being ridiculed for selling a car at a loss of 60,000 yuan and being punished for collecting facial data. It has also been criticized for having relatively low cost-effectiveness in areas such as human-machine engineering, chassis and suspension, handling, passenger space and comfort, and range. It should shift its design orientation from being cool and good-looking to considering more space, driving experience, and practicality in order to truly create a high-volume and well-received car model.
For example, XPeng can cut unnecessary hardware and software expenditures to meet the pseudo-market demand and bring electric vehicles back to being a good car first, an affordable car second, and an intelligent electronic product last.
Judging solely from the criticisms that people make, XPeng still has a long way to go to achieve perfection. In terms of long-term development, XPeng’s current car sales and profitability are still far from safe because of rapid organizational expansion, such as the increase in R&D personnel from 2,063 to 4,000 and the number of sales outlets from 160 to 271 in 2020 alone, with an expected year-end number of more than 350. The rapid expansion of the organization poses huge challenges to management ability, organizational vitality, and brand tone. The frequent problems in the sales department are essentially due to the increase in scale without matching improvements in management.
XPeng has repeatedly mentioned its current dilemma of “one is the supply chain, the other is organizational management.” Supply chain problems are short-term issues and are superficial. When the company becomes stronger, the supply chain problems will naturally be solved. Therefore, ultimately, all of these problems may be attributed to organizational depth. Only with sufficient organizational depth can an organization have a strong and intelligent management team, a smart corporate culture, powerful organizations, and small organizational units that work together to build intelligent products and explore an uncertain future.
Conclusion
XPeng Auto, which will never change its name, has turned into a “butterfly wing,” perhaps in response to the temptation of its good buddy Xiaomi’s 2 million logo, and it seems to hide the joy and excitement of transformation. Now that it has wings, can it soar into the sky?Perhaps influenced by Brother Lei Jun, XPeng Motors seems to be a true “Xiaomi” car at heart. Now, Li Kuai Xiaomi Motors is about to be launched, while XPeng Motors will be a stumbling block and touchstone for Li Kuai Xiaomi Motors. How mystical.
In fact, Toyota and Honda also came out hand in hand from the small Japanese market. Even when Toyota sat firmly in first place in the world, no one underestimated Honda, which still received a lot of attention. Similarly, BMW and Mercedes-Benz, also from Germany, have been loving and killing each other for many years.
Therefore, whether it is the domestic car market or the international car market, the market is large enough. As long as there is strength, there is plenty of room for XPeng and Xiaomi to play their respective strengths. Looking forward to XPeng and Xiaomi falling in love and fighting with each other for thirty years, fifty years…
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.