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Author: Zhou Changxian

Many people felt like they were punching their master with an unorganized punch when watching the XPeng P5 launch event.

During a one-hour speech, He XPeng frequently “saluted the classics” and compared the parameters of the XPeng P5 with those of the Toyota Camry and Volkswagen Passat in several categories such as zero to a hundred acceleration, interior space, and active safety.

To be honest, comparing electric cars with fuel cars has some worthwhile parameters to discuss, but some are really unnecessary.

What I am curious about is the product positioning and behind-the-scenes logic of XPeng’s third car, P5, as a new carmaker that has been in business for seven years. What new tactics and choices are hidden behind its marketing and communication? These are obviously more worthy of analysis and summary.

Of course, it is difficult to obtain answers to these questions through an online product launch event. Fortunately, I spent half a day test driving the P5 earlier and got a shorthand transcript of He XPeng’s interview with the media, which basically clarified the XPeng car’s philosophy and P5’s tactics.

He XPeng’s philosophy: only speed can’t be broken, and dimensional reduction is used to strike

He XPeng had been an entrepreneur in the Internet industry for many years, being well-versed in some of the tactics of this field, such as only speed cannot be broken and dimensional reduction is used to strike, while also being flexible.

XPeng car has only been in business for seven years but has already launched three cars with a mid-term facelift, which can be said to be progressing quickly. For example, P5 was launched in 2019 and made its debut in April 2021 before going on sale in September. Is it fast?

There is a rationale for being fast. First, P5 selected the G3i platform, which has a more mature supply chain. Second, P5 is equipped with a visual fusion sensor solution that has been successfully validated on the P7, as well as the globally leading Livox LiDAR system. Therefore, the development cycle has been significantly shortened, and R&D efficiency has been greatly improved.

Now let’s talk about “dimensional reduction is used to strike,” which is related to the previous point. On an A+ level electric car product, the tactics of installing intelligent software and hardware that B-level cars do not have temporarily are even scary for insiders.

In fact, after careful consideration, P5 uses dimensional reduction in technology and dimensional elevation in marketing. Just take this launch event, for example, discussing the challenging Camry and Passat that middle-aged people buy, which can be described as taking a different approach with good intentions.

I have read some comments from colleagues in the media, and many people feel that P5’s positioning, level, and user base are different from those of these two cars and that there is no comparability between them.

Let’s see how He XPeng puts it.“`
“I don’t really like using the current positioning method to position cars. Why? The logic behind the current positioning method assumes a premise in the Chinese market environment. Secondly, under certain user needs and within a certain price range, this generally appears when there is a relatively stable demand.”

He believes that these stable demands come from stable changes. However, technology is now the biggest variable driving changes in automotive products, and bigger changes in products will drive changes in user demand.

This is He XPeng’s theoretical deduction. Believe it or not, he believes it and the data seems to confirm his inference.

“Many people ask, how many people will take a nap in the transformable space of the XPeng P5? How many people will watch a movie there? Just as we didn’t know how many people would use the NGP when we first launched it.”

But the data speaks for itself: XPILOT 2.5/3.0 accounted for as much as 97% of deliveries on the P7. “To be honest, we didn’t imagine such a high proportion at first, far beyond the scale our partners can mass produce.”

At first glance, He XPeng seems to deny the positioning theory, but in fact, I think he is applying positioning theory in practice.

The book “Positioning” proposes that to impress users’ minds with indelible information, the first thing required is a vacant mind, a mind that is not occupied by other brands.

Jiang Nanchun, founder of Focus Media, has been walking the streets for more than 20 years based on this theory, successfully seizing users’ minds through differentiated positioning and saturation marketing. He also summarized multiple cases and wrote a book called “Seizing the Mind”.

I don’t know if He XPeng has read this book, but he clearly applied it well. In practice, XPeng’s strategy has reached an even higher level: by affixing intelligent labels.

XPeng has invested heavily in R&D in the fields of intelligent driving and intelligent cabins, creating heavyweight products such as NGP for high-speed navigation-assisted driving, memory parking for parking lots, and cabin full-scenario voice conversations. This has not only attracted tens of thousands of users but has also largely led to the development of the intelligent electric vehicle industry.

Today, the XPeng P5 has gone even further and added the City NGP (Navigation Guided Pilot) intelligent navigation-assisted driving function.”
“`On urban expressways, main roads and secondary roads that are covered by advanced driver assistance system maps and connected to highways, assisted drivers can execute driving tasks according to the navigation route, with the abilities of intelligent assistance for passing through traffic lights, customized following of city road conditions, intelligent assistance for overtaking in city road conditions, intelligent assistance for limiting speed adjustment, and intelligent assistance for passing through roundabouts.

Meanwhile, XPILOT 3.5 also brings the VPA-L cross-floor parking memory parking function to the 600P and 550P models of XPENG P5. Under the monitoring of the driver, the vehicle can intelligently assist the driver to drive to the vicinity of the parking space and complete parking in the parking lot when entering the parking lot from the entrance (within a specific distance from the parking space).

With the support of lidar, XPENG P5 has stronger capabilities in scenes such as oncoming vehicles, detours, and avoiding pedestrians. With the fusion solution of multiple radars and cameras and intelligent decision-making algorithms, the memory parking function can cope with complex scenarios such as vehicles entering and leaving the parking lot, oncoming vehicles, and pedestrians passing through to complete the intelligent parking assistance.

So, what is the purpose of XPENG Automobile attaching intelligent labels? It is definitely not for the sake of being different, but to create a hot-selling product.

“The most important thing is to create a hot-selling product. I think the value of a hot-selling product is better than many other vehicles.” said He XPeng.

P5’s tactics: creating hot-selling products at all costs

To create a hot-selling product, He XPeng has done two incredible things:

First, he doesn’t listen to the product personnel.

He said that he often participates in internal and external styling, especially internal discussions related to intelligence, and even leads product definition.

“I have a lot of ideas, such as why use lidar? I proposed it, let’s study it together. Why create the “hundred-changing space”? It was also my idea and what I wanted to do.” He XPeng found that the more experienced product personnel are, the less they dare to break through, and it is the outsiders who dare to think and do it.

Take the sleeping scene of the “hundred-changing space” as an example. He XPeng believes that according to the insight into the user’s habits, resting in the car is a more common scenario. For electric vehicles, midday nap in the car is feasible, which also expands the application scenarios of electric vehicles’ hundred-changing intelligent space.

However, the designers and product managers are not very receptive to such whimsical ideas, and even have some resistance. Under He XPeng’s insistence, the designer considered the safety and convenience of the sleeping scene application, and on P5, users can enter the sleeping space in 10-15 minutes.# One-click/voice access to Sleep Space
(Lower the seat, close the electric sun shade, play soothing music for sleep, install a privacy curtain, unfold the pillow and blanket, and enter the sleep mode with our special custom-designed inflatable mattress during long-distance driving breaks.)

Second, Don’t Ignore Users’ Feedback

Henry He talked about a story from his first startup experience. One of his competitors, who had been in the business for four years, went bankrupt. The founder summarized the three core reasons for the company’s failure. The first reason was that a small number of users with loud voices led the company into a ditch.

“I remember this sentence very deeply, even after so many years.”

This phenomenon is actually a common logical fallacy – Survivorship Bias. It means that people can only see the results that have been subjected to a certain screening process, without realizing the screening process itself. Therefore, key information that has been screened out is ignored. In other words, these survivors (very active people) are actually a small group of people, or a non-typical population.

At this point, Henry He made an astonishing assertion: in the new era of technological innovation, a good product manager should not conduct customer research.

Does this differ greatly from the “user co-creation” concept that many car companies talk about these days? Very interesting.

Henry He further explained that product development is about how to sift through sand to find gold. “Because the customer demand scenario is like sand, and only those that are relevant to you are the gold that you should be seeking from a product perspective.”

He reached a conclusion: what every product manager, customer, and Pango friend should understand today is that you are a customer of the product, but you do not represent its customers because the data range is too vast.

In addition, Henry He also talked about another skill for creating explosive products: the art of balance.

“I think that designing cars is really an art of balance.” Henry He admitted that this sentence was originally told to him by Lei Jun, “I understood the literal meaning of this sentence when I first heard it, but now I increasingly realize the deeper meaning, that designing a product with hardware and software integration is an art of balance.”

At the same time, he also understood the differences between the barrel theory in the field of internet and automotive manufacturing.”Making cars and software are different. It follows the short-board theory of the wooden barrel, where increasing the length of the long board may not seem impactful, but increasing the length of the short board can improve sales tremendously. In the end, sales come from a combination of multiple abilities, rather than just one.

AutocarMax believes that these two points are precisely why the XPeng P5 improves driver and passenger comfort at the car level. This is also the reason why XPeng P5 pays homage to traditional gasoline sedans, and seeks to surpass them in terms of design, handling, acceleration, steering, NVH, and navigation convenience.

Some say that the XPeng P5 is a product that can only succeed and not fail. For a start-up company, this is obviously a useful but meaningless statement.

To create a successful product, XPeng Motors is willing to sacrifice profit margins and cost. Of course, the reason why they dare to do this is because they have enough money.

He said that at a time when it’s difficult for new car-making companies to raise funds, gross profit margin is undoubtedly an important point, but now that they have relatively sufficient funds, they should ask themselves, “Why can we become the strongest in China or even globally even faster?”

“If after three to five years, from the Spring and Autumn Period to the Warring States Period, you cannot be in the top three to five, it will be very challenging,” He XPeng said. “At that time, XPeng’s gross profits should be higher, and the scale should be larger. Today, the most important thing is to solve the problem that we not only have to survive at that time but also to survive stronger.”

After all, if we think about it from a higher level, there are two reasons why He XPeng compares P5 with Camry and Magotan:

Firstly, He XPeng believes that in today’s changing technological era, using the analogy method of the past may produce significant errors, but it is undoubtedly partially correct.

“I often say that limited information, changing environments, and correct logic lead to wrong conclusions. Because you have extensive past experiences, you may infer wrong conclusions in a changing environment, and that’s what it means.”

Secondly, in terms of competition, some people adopt the avoidance method, while others adopt the face-on competition method. XPeng Motors eventually chose the latter. It is a difficult decision that requires courage and may lead to failure, but after enduring the hardships, training the first group of teams, and elevating comprehensive abilities, many cars will not have significant weaknesses in different aspects and have relatively long strengths.

After speaking, He XPeng added, “This is the path we choose, and it may not be right.”I think that, although he says so, he must believe that he is right in his heart. As he said at the press conference: XPeng Motors skipped the fuel and hybrid stages and went straight to electric power. This process was more difficult, but it must be the more correct one.

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.