Electric-Vehicle Startup XPeng Bets On Tech That Tesla Rejects
One of three U.S.-listed Chinese EV makers, it is relying on innovation to overtake its rivals.
One of three U.S.-listed Chinese EV makers, it is relying on innovation to overtake its rivals.
GUANGZHOU—Once a Tesla Inc. fan who owned four of its vehicles, He Xiaopeng, co-founder of Chinese electric-vehicle startup XPeng Inc., now wants to overtake the car company that originally inspired him.
While acknowledging Tesla as an inspiration, Mr. He said XPeng—one of three Chinese EV companies listed in the U.S.—can win using innovation, an area in which Chinese technology companies have become increasingly formidable.
“We have a saying in China,” Mr. He said in an interview Wednesday at XPeng’s headquarters in the southern city of Guangzhou. “To defeat someone, you need to do something different.”
XPeng, alongside its U.S.-listed peers Li Auto Inc. and Nio Inc., has taken investors on a wild ride over the past eight months.
The company’s August listing on the New York Stock Exchange valued it at US$8 billion. By November its value had jumped to nearly $58 billion. Now it is back down to about US$27 billion. In March, the Shanghai-based research firm Hurun Report said Mr. He was worth US$11 billion.
XPeng unveiled its third production vehicle, the P5 sedan, in Guangzhou on Wednesday. Deliveries of the P5, which is said to have approx. 600km driving range, are due to start this year. The company didn’t announce the car’s price, though it will be lower than the in-production P7 sedan, which starts at roughly $60,000 and is a direct competitor of the made-in-China Tesla Model 3, which costs the equivalent of about $66,900.
XPeng began low-volume exports to Europe in December and plans to enter the U.S. market in the future.
Considered by some analysts as the most tech-centric of China’s EV players, Xpeng deploys a voice-operated user interface in its cars, and an autonomous-driving system for use on stretches of highway with 5G internet coverage.
It recently tested the software by sending a fleet of its cars on a 3540km trip from Guangzhou to Beijing, and logging 0.71 human-operator interventions per 100 km—a new benchmark for self-driving cars, the company claimed. On the roughly 320km Shanghai to Nanjing leg attended by the Journal, the car’s human operator intervened once, swerving when the car failed to notice a bus changing lanes ahead.
XPeng claims its autonomous-driving systems, which have previously used radar and cameras, will be significantly enhanced by the addition of lidar, which uses lasers to scan the vehicle’s surroundings—and which Tesla Chief Executive Officer Elon Musk has dismissed as a waste of money. Xpeng says the new P5 is the first Chinese EV that comes with lidar as standard.
XPeng sold 13,340 vehicles in the first quarter of 2021 and likely needs to sell as many cars every month to break even, said Tu Le, founder of Sino Auto Insights, a consulting firm. Mr. He said in the interview that he was focused on building revenue and growing XPeng’s reputation, rather than on profit.
Tesla sold 69,280 vehicles in China in the January-to-March period, according to the China Passenger Car Association, while Nio sold 20,060 cars.
XPeng is in a strong position as a car company whose main asset is its software, Mr. Le said. “The post-1990s generation in China are all digital natives, and they like Chinese brands,” he said. “What XPeng is doing plays very well with that young Chinese consumer.”
At a moment of rising nationalism in China, homegrown brands have generally been gaining ground on Western ones among local consumers, from clothing to cars.
Mr. He this month announced plans for a third XPeng plant in Wuhan; its second plant, in Guangzhou, is still being built. The three plants will give the company an expected production capacity of 300,000 cars a year.
XPeng last year unveiled a prototype flying car that Mr. He said was far from being a gimmick and potentially key to the company’s future. The company’s growing fleet of EVs is just a starting point for a company with ambitions to define “the future commute,” he said.
Originally a computer programmer, the 43-year-old Mr. He, who comes from the central city of Huangshi, founded UCWeb Inc., a mobile-browser developer, in 2004. He sold the company to Alibaba Group Holding Ltd. a decade later in what was then China’s biggest internet merger, and worked as a senior Alibaba executive until 2017 before leaving to run XPeng, which he had co-founded as an investor in 2014.
The birth of his son in early 2017 jolted Mr. He into starting something new, he said. He settled on EVs despite having no automotive background and, by his own admission, regarding the overheated EV sector as “a crazy business.”
“I wanted my son to think that he had a cool dad,” he said.
Unable to persuade Alibaba to let him develop an EV in-house, Mr. He joined XPeng as full-time chief executive and brought the e-commerce giant on board as an investor. Alibaba owns 12.5% of the company, while Mr. He holds 22.7%. Alibaba didn’t immediately respond to a request for comment.
Mr. He said he only fully realized the difficulty of teaming software engineers with car mechanics when the company produced its first working prototype in late 2017.
The XPeng team was moved to tears when the vehicle rolled out: Engineers wept with joy because the machine worked, while the software developers were heartbroken because to them the unpainted and incomplete test-model “looked like trash,” Mr. He said.
The experience taught Mr. He and his software colleagues that developing a competitive car would be an arduous, years-long process.
Mr. He said his priority was to build XPeng into a global company rather than to outflank Tesla or other competitors, but there is open enmity between Mr. He and the company that once inspired him.
In 2019, Tesla filed a lawsuit against a former employee who had quit Tesla to join XPeng, alleging that he had downloaded its Autopilot source code with a view to handing it over to his new employer. XPeng was never a party to the legal case and said it is “confident we have engaged in no wrongdoing.”
In November, Mr. Musk trashed XPeng’s autonomous-driving system, saying on Twitter that “they have an old version of our software” and alleging that intellectual-property theft “was just an XPeng problem. Other companies in China have not done this.”
Mr. He fired back on Weibo. “It seems XPeng’s next-generation autonomous driving architecture…has made someone in the West feel very upset,” he said.
“Elon Musk is an amazing person and a great entrepreneur, despite some flaws,” Mr. He said in the Wednesday interview. Tesla didn’t respond to a request for comment.
Reprinted by permission of The Wall Street Journal, Copyright 2021 Dow Jones & Company. Inc. All Rights Reserved Worldwide. Original date of publication: April 15, 2021.
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Just 55 minutes from Sydney, make this your creative getaway located in the majestic Hawkesbury region.
It’s easy to buy clunkers when you’re caught up in the moment. But regrettable purchases aren’t inevitable.
Trying to buy just the right souvenir on a trip is a risky business. You can wind up with a lifetime treasure—or an albatross you feel stuck with forever.
Consider the giant painting of a chicken flying out of Cuba that has been hanging over our couch in Palos Verdes, Calif., for the past 15 years. Buying it cheaply seemed to make sense when we were in Havana, since my husband’s family had fled the country after the revolution.
But the flying chicken just didn’t seem as, well, poignant by the time we returned home and hung the 4-by-7-foot painting. No guest has ever said a word about it. “I can’t help you with the chicken,” an art dealer told me long ago when I asked for help in selling it.
So, how do you find the right souvenir? Or is there even any such thing?
For many people, the answer to the second question is an unqualified “No,” and they have stopped trying. “Souvenirs never look as enticing or beautiful as they did at the time of purchase once you get them home,” warns Patricia Schultz, the author of “1,000 Places to See Before You Die.”
After collecting rugs on her trips, then Christmas ornaments, before running out of room at home for both, Schultz says, “I have gone cold turkey. I collect memories.”
But for others, surrendering just won’t do. “It’s intrinsic when people travel that they wind up bringing a keepsake of the journey,” says Rolf Potts, the author of “Souvenir,” a book that traces the history of travel souvenirs back to the earliest recorded journeys.
“It can be a way to show off,” he says. “Much like the envy-inducing travel posts on Instagram.” But for many people, he says, “It’s proof you were there, not only to show other people but also for yourself.”
For those who lean in this direction, there are ways to help avoid regrets. Tara Button , founder of the Buy Me Once website, and the author of “A Life Less Throwaway: The Lost Art of Buying for Life,” suggests focusing on practical items that fit your lifestyle and double as mementos.
As an example, she once bought a “very affordable” baby blanket made from alpaca fiber on a trip to Peru and now uses it every day. The blanket not only reminds her of “the time pre-children when I was traveling,” she says. “It goes over my 2-year-old son every night. It’s always soft and always gorgeous.”
She has a friend who collects one cup from each destination. “Those are perfect memory keepers,” she says. “A small item that is used every day.”
One obstacle to finding the right souvenir is that it can be hard to think practically when you are swept up in the excitement of a new culture. Consider the Burmese puppet, 15 inches tall, that has spent about two decades in the closet of Liz Einbinder , head of public relations for Backroads, an adventure-tour company.
“We saw a lot of puppets everywhere and just got caught up in all of the Burmese art and culture,” she says. Now she wonders, “Why did I bring this back? It sits in the back of my closet and I can’t seem to get rid of it. It creeps me out when I see it.”
When that buying urge sweeps over you, Button and other travel experts suggest pausing to consider your lifestyle, taste, needs, and the scale of your home—you’re going back to the reality of your everyday life, after all.
But that doesn’t necessarily mean being entirely practical. Einbinder collects miniatures, mostly miniature houses, from every country, and has more than a hundred. Most are in storage, but she keeps a little London bus and a little Egyptian pyramid on her desk. For her, souvenirs aren’t just about memories, they’re also about the hunt. “It gives me something to search for” on each trip, she says. “That’s half the fun.”
Another way travelers often go wrong is by giving in to pressure, or at least persistence, from salespeople.
When Kimba Hills, an interior designer, went to Morocco, she hired a guide who took her to a rug store in Fez, where the dealers delivered a whirlwind sales pitch while serving tea. She wound up buying a $4,000 flat-weave Turkish rug, measuring about 13 feet by 9 feet.
“No one in my group could believe I got seduced,” she says.
When the rug finally arrived at her home in Santa Monica, “It smelled like cow dung,” she says. Washing the rug was going to change the color.
When she called the dealer in Fez and demanded her money back, he refused, offering to send her a different rug instead. “We got into a yelling match,” says Hills. “All my skills went out the window.”
Looking back, she says, “You are in a buying mode because you are there and feel like you should buy something.” On a recent trip to Mexico, she bought nothing, explaining, “I’m wiser.”
Spontaneity can cut both ways. There’s the chicken painting. But waiting for inspiration to strike, rather than planning to go home with a souvenir, can still help.
Henry Zankov, a sweater designer, says that when he travels, he explores his destinations with the idea that he won’t buy anything unless he comes across something he loves. He still buys plenty, but says “I don’t have regrets.” At his home in Brooklyn, he has ceramics, vases and glassware from shops he found randomly in Spain, Greece, and Italy. “I buy what I have to have,” he says.
There are times he doesn’t find anything. “So I just give up,” he says. “It’s OK.”
Some souvenirs do become the treasure of a lifetime.
Annie Lucas , the co-owner of MIR, which offers tours to less-traveled destinations, became captivated by a mirror on a trip to Morocco. It was made with hand-pounded silver and pieces of camel bones.
She went back to the store three or four times, debating the cost and whether she would regret it once she got home. It was heavy and measured 24 inches by 40 inches.
“That was 15 years ago, and I still treasure it,” she says. “If I had to get out of my house and had only five minutes to pack, I would grab that off the wall.”
This stylish family home combines a classic palette and finishes with a flexible floorplan
Just 55 minutes from Sydney, make this your creative getaway located in the majestic Hawkesbury region.