Author: Zheng Senhong

In 2022, what do the top three new forces, NIO, Xpeng, and Li Auto, have in common?

With the launch of Xpeng G9, these three new forces have officially entered the mid-to-large-sized SUV market with a capacity of 400,000 units.

Unlike NIO ES7 and Li Auto L9, G9 has a larger competitive scope.

G9 continues its family-style complex “SKU combination,” with six versions of the new car priced at 3.099-4.699 million yuan:

There are also three optional packages:

• 5D Music Cockpit (22,000 yuan)

• XNGP ADAS (28,000 yuan)

• 4C Super-Fast Charging Battery Pack (10,000 yuan)

The numbers in the car model name represent the endurance, and the letters represent different configuration versions. For example, G is the low-end version, E is the basic version, and X is the smart driving version.

From Xpeng’s delivery plan, only the 702E version is planned to begin deliveries at the end of October this year, and other versions will be delivered in December.

He XPeng stated at the press conference that the 702E will be the main selling model of G9.

However, according to the configuration list, the main selling model with a price of 3.499 million yuan has missed all the selling points of G9.

If users want to have all the selling points of G9, the top version (650X commemorative edition) is already more expensive than the Li Auto L9 and NIO ES7.

If users only want to experience G9’s full-scene assisted driving function, for example, with the 570G lowest-level version, they need to choose the 702E version and then choose the XNGP ADAS package. The price difference is already 68,000 yuan, which exceeds the domestic price of Tesla’s FSD (64,000 yuan).

As a key model for XPeng to move upmarket and improve its product line gross margin, the importance of G9 is self-evident.

Xpeng G9: The Disruptor that Overloaded the Game

New car products always anchor intelligence.

J.D.Power’s research data shows that the intelligent experience of cars accounts for 14% of the purchasing weight, and 24% of potential car buyers believe that the intelligent experience of cars is their most important consideration.

This more or less means that “no intelligence, no car” has become the new consensus between car companies and consumers.

In this trend, “no intelligence, no XPeng” has become the bottom line of XPeng’s product development, and even its genes.

As He XPeng said, “We are not achieving branding upmarket through higher-end services but using products and technology to establish a standard and uniform service to achieve differentiation.”小鹏 G9 is the product of this thinking process.

“The smartest among luxury cars, the most luxurious among smart cars, and the fastest charging among mass-produced cars.”

At the press conference, He XPeng declared that “the XPeng G9 is going to take over from the Porsche Cayenne.”

How to achieve the smartest?

He XPeng focused on the XPeng Intelligent Driving Generation 2 System XNGP, whose ultimate product form is point-to-point all-scene intelligent assisted driving, which can operate normally regardless of whether there is high-precision maps or not.

XNGP achieves the function of cruising and parking integration, and gradually shifts from the “heavy sensing and heavy mapping” route to the “heavy sensing and light mapping” route.

“The application of high-precision maps has improved the experience value of navigation services, but due to the cost of data acquisition, production, approval, updating, and maintenance, high-precision maps can only cover a small part of the high-speed area and cities,” He XPeng explained the reason for the route change.

In order to get rid of the limitations of high-precision maps, XPeng will accelerate the promotion of large-scale use of advanced assisted driving:

• Plan to cover most urban areas in China in 2023, and achieve scenarios including active follow-up, lane change overtaking, left and right turns;

• By 2024, the driving and parking functions will be interconnected to form a complete point-to-point assisted driving scenario.

In terms of hardware configuration, XPeng G9 is equipped with two Nvidia Orin-X chips, with a computing power of 508TOPS. The whole car has a total of 31 perception hardware:

• 2 Velodyne lidars from Suteng Juchuang

• 12 high-definition cameras

• 5 millimeter-wave radars

• 12 ultrasonic radars

Among them, He XPeng specifically emphasized the advantages of twin lidars: wider coverage than a single lidar and smaller blind spot angle.

He also provided a set of data as evidence: the vehicle front layout hides only 25% of the blind spots in the vertical viewing angle compared to the roof solution, which is safer in the vertical viewing angle of the front position.

Regarding the controversy about the easiness of getting scratched in the front of a car, He XPeng presented a set of data:

• The accident rate for a human driver is about once every 50,000-100,000 kilometers;

• The repair rate for XPeng P5’s collision caused by the laser radar is only 0.9%.

It is worth mentioning that except for the 650X model of XPeng G9, which is equipped with dual laser radars and dual Orin chips, other models do not have laser radars, and only have a single Orin chip. Even the lowest-end model is only equipped with an 8155 chip, and other chips are not available for optional installation.

This also means that if this part of the models does not choose the XNGP driver assistance package, XPILOT 4.0 driver assistance system of XPeng will be included as standard.

For this part of customers, XPeng promises to rewrite the algorithm architecture of the past, and enhance the experience of current functions such as ACC, LCC, VPA, and NGP, including following, accelerating, responding to cut-in or overtaking, and so on.

“From scratch to whether it’s good to use or not, domestic users have gone through three stages of acceptance for driver assistance. With the gradual widespread coverage of XPeng CNGP, the degree of user acceptance is also gradually improving,” added He XPeng.

The data can explain everything.

By the end of August this year, the cumulative mileage of high-speed NGP has reached 36.9 million kilometers, and the penetration rate has reached 62.5%.

In terms of intelligent cabins, due to the addition of the Qualcomm Snapdragon 8155 chip, the G9 has achieved millisecond-level speed in terms of car-machine interaction and voice response.

At the same time, G9 has applied the MIMO multi-sound area technology to the car voice system for the first time, which can realize small P standby throughout the whole journey and multi-passenger voice dialogue without the need to wake up. The system also uses local computing power to achieve local dialogue, and can control 600 vehicle functions by voice under weak or no network conditions.# The Most Glamorous and Fastest Charging Electric Car G9 from Xpeng

Xpeng CEO He XPeng boasted that G9’s static, low-speed, and high-speed driving experience is as good as million-dollar luxury cars such as Porsche Cayenne and Mercedes-Maybach. Huawei CEO Yu Chengdong might approve or disapprove of it.

For energy replenishment, G9 is equipped with an 800V high-voltage SiC platform.

It fulfills the energy replenishment demand of 200 km driving distance after only 15 minutes of charging time (4C), and under the 3C standard, it can achieve a driving distance of 130+ km after 20 minutes of charging time.

In conclusion, G9 indeed has robust product power in terms of intelligence, energy replenishment, and driving comfort. However, whether it can achieve the “best in the industry” still remains controversial.

Who Will Buy Xpeng G9?

High-end means “upgraded brand.”

Cui Dongshu, Secretary-General of the China Passenger Car Association, once believed that new energy vehicles have significant differences from traditional vehicles, especially in the rise of domestic high-end electric vehicle brands, which actually face the difference in experience from traditional luxury.

Undoubtedly, under the multiple driving forces of policies, capital, and market demand, the high-end war has become the battlefield for automakers to compete.

Xpeng’s first product was priced at 349,800 yuan, and the second product surged to 459,800 yuan.

NIO has already crossed the 500,000 yuan price threshold.

Products with high sales prices can not only bring upward space to brands, but also significant profit growth for automakers.

Xpeng certainly sees this point.

G9 does have strong product power, but the key to high-end may not necessarily be the more advanced technology and the more configuration.

If the product fails to capture consumers’ pain points and fails to gain recognition, it will eventually become a flower vase.

After understanding G9’s product strength, the next question is, who will pay for G9?

The first portrait of Xpeng users is the young generation.

Of the more than 200,000 Xpeng users, people born after the 1990s account for more than 50%.

The fundamental reason is the price – the price range of 150,000-300,000 yuan is in the range of the mainstream consumption group and is also a price range that most geeks are willing to try out.And the target audience for the XPeng G9 model are mainly people over 30 years old who are married with families and looking to upgrade their current vehicles.

This group of users don’t have an obsession with “luxury brands,” and price isn’t the deciding factor in their car purchases.

Whether the vehicle is comfortable to use, the power and intelligence experience are good enough, determines whether this type of user will buy the G9 or not.

From the complicated SKU combination and a price range spanning 150,000 yuan, the G9 user group will also be divided into two parts:

• Users who choose a G9 under 400,000 yuan are more concerned about the comfort, space, usage cost, and peripheral replenishment conditions of the vehicle.
• Users who choose a G9 over 400,000 yuan value the vehicle’s intelligence as their primary factor for purchasing the G9.

Of course, there are also two types of people who won’t consider the G9:

One is those who have a strong demand for BBA or other luxury brands.

This group of people may prefer to compromise and choose the brand-added value brought by BMW X3 or Mercedes-Benz GLC over spending 300,000 yuan on a new up-and-coming car model.

The other type are non-family users who don’t have a need for space, and they are more inclined towards small cars with balanced brand and product strength.

In summary, the G9 user group will increase the average age of XPeng’s users, and they are mainly first-line families who are married with at least one child. These families often have a demand for carpooling.

Currently, there may be no better choice for a car model that can accommodate multiple passengers at this price point other than the G9 on the market.

This also means that the user group for the G9 will highly overlap with that of NIO and Li Auto, and they will share the same group of consumers in the same segmented market.

Is it difficult to sell more than ten thousand cars per month?

Due to the subsidy reduction and raw material price increase, new energy vehicles have started a continuous price increase mode this year. But XPeng sounded the “horn” of counterattack in July, taking the lead in launching a price reduction promotion, involving models such as G3, P5, and P7, with discounts of up to 15,000 yuan.

Behind the price reduction is mainly because XPeng’s order volume is insufficient.

In addition, XPeng will expand its production capacity to 400,000 vehicles this year. If “double-shift production” is implemented, the actual production capacity will be further increased.

Obviously, XPeng has now entered the stage of “supply exceeding demand.”

The main reason for this is the continuous squeezing of the product’s competitiveness.## G9, the Latest Contender in China’s Booming Luxury EV Market

G3 is nearing the end of its product cycle, and the P5 segment, where it belongs to, is facing stronger rivals such as Deep Blue SL03 and BYD Dolphin, which are more practical.

As for the P7, the XPeng’s flagship model, it has already announced that a next-generation product will be launched next year, and the percentage of consumers who are holding out for the new release is increasing.

In light of this, the responsibility of boosting sales of XPeng falls on the G9 model.

XPeng He, the company’s CEO, stated boldly that, “Next year’s G9 sales will surpass those of the Audi Q5 in terms of scale, and we will achieve continuous monthly sales of 10,000 units.”

According to data from the China Passenger Car Association, the market share for SUVs priced over RMB 250,000 increased from 7.25% in 2020 to 9.4% in the first half of this year. If we focus only on the electric SUV category, the latest market penetration rate has risen to 22%.

This indicates that the G9 is operating in a sub-segment that is experiencing a positive expansion.

As the market share of German, American, and Japanese SUVs continue to decline, the G9 may have the opportunity to gain more market share.

So, does the G9 face pressure in this market?

— Definitely.

SUVs are a sub-segment that is second only to mid-to-large-sized new energy vehicles. Besides the traditional giants BBA, other brands like Tesla Model Y, NIO ES6, WM Motors EX5, and GAC NE Aion V compete with XPeng.

Compared to its competitors, G9 shines with its overall product performance.

However, when we break it down and compare it with other brands at specific price points, G9 does not seem to have a decisive advantage.

For example, the EX5 from WM Motors has strong competitiveness in terms of price, range, and vehicle size.

Similarly, the NIO ES6 has a competitive edge in terms of cost-effectiveness, in addition to the brand value of Huawei.

On the other hand, besides XPeng XPILOT 4.0, in-car entertainment system, fast charging capabilities, and the ability to build charging stations, none of the core selling points of the G9 are within the same competitive system.

This means that the only real competitor that G9 currently has is the Tesla Model Y. But, given that Model Y sells 20-30,000 units per month on average, how much of that can G9 get?

When it comes to models priced at RMB 400,000 and above, G9 has to compete head-to-head with NIO ES7 and the Ideal L9.

In this price segment, the only advantage of G9 is its XNGP full-scenario auxiliary driving system. After all, NIO has battery swap technology, and Ideal can refuel like a traditional vehicle.# Challenge for G9: competing with Audi Q5

Apart from the current competitive pressures in the market, the upcoming Feeyfan R7, LiXiang L8, and Tesla Model Y, which could stimulate current order volume through large price cuts at any time, are all unknown “challenges” for G9.

Since there are many market competitors, why did He XPeng specifically target Audi Q5?

At the G9 launch event, He XPeng cited Porsche and Mercedes-Benz’s million-dollar luxury cars as competitors, but eventually turned to Audi Q5.

Behind this information is nothing but the expression of G9’s superior competitiveness.

The million-dollar luxury car market is only a niche market. For example, Porsche Cayenne, as the best-selling million-dollar car model in China, sold only 40,000 units in the first half of this year, with an average monthly sales volume of less than 7,000 units.

As the main product of XPeng Motors, G9 will not naturally take the sales volume of million-dollar luxury cars as its target. The monthly sales volume of Audi Q5 has long been maintained at around 12,000 units.

Obviously, this is He XPeng’s sales volume expectation for G9, and it also highlights G9’s ambition to enter the same-level fuel vehicle market.

In summary, the goal of maintaining monthly sales volume above ten thousand for G9 is undoubtedly a huge challenge, but a sales volume level of 5-7 thousand units per month may be normal for G9.

Of course, what the industry is looking forward to even more is, after the three giants in the areas of XPeng, NIO, and LiXiang met in the mid-to-large SUV arena, who will sell better?

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.