The New Kid on the Block (Xpeng Motors)
An overview of China's newest luxury EV car manufacture on the US market
Welcome to another Smartrick Pick! Today I’m covering something a little different a new IPO in Xpeng (Xiaopeng Motors XPEV). Chinese EV car manufacturers Nio Inc and Li Auto have been 2 big names in terms of alternatives to American giant Telsa as of late. Both companies are in a similar market space in terms of being a luxury EV. However today XPEV will finally be listed on NASDAQ and today will share with you why I am personally very excited about what XPEV brings to this market space.
Intro
Xpeng Motors founded in 2014 in Guangzhou China is the latest Chinese Auto company to be traded on the NASDAQ. Xpeng initially public offering of 85 million American Depositary Shares (ADS) was set at $11-13 in hopes of raising 1.1 billion dollars which would bring their evaluation to ~9.2 billion. However, after the recent surge of its competitors Nio and Li Auto, that price has been raised to $15 as of 8/26. In this report I will cover:
*UPDATE* XPEV listed at $23.00
The history of Xpeng Motors
Xpeng’s technology
Xpeng’s sales and finances
How they differ from Li Auto and Nio Inc.
History
Xpeng Motors filed its F-1 with the SEC on August 7th of this year in an attempt to keep up with competitors Nio and Li Auto as both companies have seen recent success on the American market. Xpeng currently has two locations one in Guangzhou, and the other in Silicon Valley, California. The company is currently valued at ~$11 billion dollars with notable backing from Alibaba (BABA), Qatar National Bank (259.5 billion USD), and Chinese tech manufacture Xiaomi (Chinese Samsung). Xpeng has seen multiple successful rounds of series funding most recently closing Series C+ financing at around $900 million USD in August. In total, the company has raised over $2.6 billion since 2018.
Xpeng manufacturing facility Zhaoqing Xpeng Motors Intelligent Industrial Park sits on 3000 acres (~roughly 4.5 square miles). The factory is “state of the art” in terms of its advanced robotics and autonomous capabilities as the facility is operated by 264 intelligent robots and 600 member team. Xpeng holds a competitive advantage to rival Nio Inc in this regard as Nio relies on JAC motors as its manufacturing partner.
Xpeng’s Technology
XPILOT System
Xpeng Motors’ biggest tech advantage is its V2X (Vehicle to Everything) capabilities that it offers in its onboard AI system. Currently, the two models offered by Xpeng in the P7 sedan and G3 SUV come standard with Xpeng’s XPILOT 2.5 autonomous system. This capability is powered by NVIDA’s ‘Drive Xavier’ onboard ECU and Qualcomm’s ‘Snapdragon’ processor which together enable hands-free parking, lane control, and additional safety features warning drivers of various road hazards. Xpeng will release XPILOT 3.0 later this year and as of today is the only EV manufacture outside of Tesla to offer this feature.
In 2018 Telsa filed a case against a former engineer Guangzhi Cao who uploaded Telsa’s Autopilot source code to a zip drive accusing him of bringing their proprietary AI software to Xpeng. Cao who is now the ‘head of perception’ at Xpeng admits to downloading the source code but ensured he deleted the source code and Telsa’s IP was safe.
However, Telsa hasn’t been able to pursue these claims further as a judge recently denied Tesla’s request that would allow them to access materials related to a former Apple engineer who reportedly stole trade secrets from Tesla before joining Xpeng motors. Telsa hasn’t commented further on these accusations.
Xpeng has openly stated that its XPILOT system was inspired by Telsa’s Autopilot but calls the claims “ speculative and tenuous”. The XPILOT system boasts 10 autonomous driving cameras giving it 360 degrees of sight compared to Tesla’s 8 camera system that provides only 90 degrees.
Battery
Xpeng’s P7 sedan is currently ranked #1 in distance per charge and like its competitor Li Auto utilizes an onboard fast charge system allowing the vehicle enough charge for a distance of 120Km in just 10 minutes of charging. In 2019 Xpeng teamed up with Nio to enable both companies charging network to both Nio and Xpeng customers at no additional charge. Recently Nio announced its battery as a service (BaaS) business giving its customers quick swapping of batteries something Li Auto and Xpeng Motors have yet to offer.
Sales and Finances
Xpeng finances have been their biggest question mark leading up to the IPO. The company reported a net loss of ~21 million USD in its f/1 filing leading up to the IPO leaving some investors questioning Xpeng’s actual value. However, I don’t expect that to be an issue going forward as the company continues to scale up production in its vehicles in China. As of July 17th, Xpeng has surpassed the expected capacity ramp-up of its new facilities as the company has had more interest then they expected leading up to its large-scale delivery ceremony.
The number of vehicles reached 1,641, making it the fastest model for large-scale delivery among the new car-making forces, dispelling everyone's doubts about the Xpeng P7. At the same time, according to the latest data from the China Automotive Technology and Research Center, the number of Xpeng P7 models in July reached 1,723, an increase of over 450% from the previous month making it the 8th most popular vehicle in China (petro and electric).
The Wrap Up
Whether you prefer Nio, Li Auto, or Xpeng they all are trending in the right direction as China continues to dominate in the EV market outside of the American Tesla. I look forward to covering all of these companies as this industry continues to grow.