Chinese electric vehicle manufacturer Xpeng Inc. hopes drastic reductions in production costs will bring the eight-year-old company profitable, co-president Brian Gu told reporters at the Shanghai International Auto Show, which opens to the general public on April 20.
The Guangzhou-based company plans to save 25% on its powertrain costs, including battery cells, and save 50% on intelligent driving features by the end of 2024, Gu said. As of now, the two account for more than half the cost of building Xpeng EVs, he added.
Last year, disappointing sales forced Xpeng to do so push back the timeline for profitability to 2025.
But battery materials are getting cheaper, Gu said, bringing savings this year and next. The company is also trying to reduce the use of laser-based radar, chips, sensors and cameras in its automated driving functions.
The company is also betting that a new design and manufacturing architecture it calls SEPA2.0 will help increase efficiency and reduce costs, the company’s CEO He Xiaopeng said at a launch event on Sunday.
Xpeng will introduce its first model developed on the new platform, a mid-sized SUV that will compete with the Tesla Model Y, when the show opens to the media on April 18. It doesn’t say how much it will cost, but Gu said the company will focus on developing core products with a price range of 150,000 yuan ($21,800) to 350,000 yuan. The company may launch another model by the end of this year.
“The industry is becoming much more competitive and there are many more models,” Gu said. Not so long ago, electric vehicle buyers were a smaller, more affluent group, he said, but now that that has changed, “the focus needs to be on offering attractive products at an affordable price.”
a price war caused by the American car manufacturer Tesla Inc. early in the year has put automakers in the world’s largest market under pressure. About 20% of passenger cars on the market saw price cuts of more than 10,000 yuan ($1,500) in the first quarter, facts compiled by research firm China Auto Market show.
Xpeng said its intelligent drive technology is “much better suited to the Chinese market” compared to Tesla’s, Gu said, pointing out that the technology originally developed in the US does not work with high-definition cards and is not produced locally. developed and tested.