Chinese electric vehicle maker Xpeng’s president on its global ambitions to be a world leader in mobility

We are gathered outside the Xpeng AeroHT headquarters in Guangzhou, about to witness a “flying car” demonstration by the Chinese electric vehicle (EV) maker.

“It looks like a giant drone,” I overheard another journalist’s remark.

Indeed, the Xpeng X2, with its airframe made of carbon fibre, looks more like a cooler, futuristic helicopter with four propellers located at each corner to lift its fully enclosed, two-seater cockpit into the air.

Can a vehicle without wheels be called a car, I wonder, as the X2 rises tentatively, yet impressively, into the skies.

Days later, Xpeng premieres the eVTOL Flying Car, which stands for Electric Vertical Take-off and Landing vehicle, at the 2024 Beijing Auto Show in April, and we are there to witness its debut.

We watch as massive propellers emerge and slowly unfold from the top of this hulking contraption of a car designed with a dual-mode cockpit for both land and air travel. Well, at least there are wheels on this one to placate this exceedingly punctilious journalist overly obsessed with technicalities.

DEVELOPING THE LOW-ALTITUDE ECONOMY

“If you look at mobility as a whole, it's not just limited to the automobile,” said Brian Gu, Xpeng’s vice chairman and president in an interview with CNA Luxury following a tour of its production facility in Guangzhou.

“Given the advancement in AI, [the notion of] mobility has morphed into lots of different areas and as a smart EV player, we want to look into the future and see how our vehicles can be used differently and more efficiently. Electrification is just the first step, and mobility does not have to be two-dimensional. We want to see how mobility can evolve with autonomous driving and with flying cars; that is our hope for the future of mobility,” he explained.

So, Xpeng intends to position itself as not just an EV company, but as tomorrow’s experts in electric mobility reaching far beyond the production of electric cars.

“There’s a lot of talk about the low-altitude economy,” said Gu. “Compared with other countries like the US, this space is underdeveloped in China and there’s huge potential for economic development,” he observed.

According to Gu, the technology required to power these low-altitude craft are based on the same large AI models that train its EVs and drive the development of robotics, which he believes could become mainstream in factory, retail and home environments in 10 to 15 years. Which is why Xpeng is investing heavily into R&D, with about 40 per cent of its global workforce in research & development located across its R&D centres in Silicon Valley, San Diego, Guangzhou and other major Chinese cities.

“The technology is all connected, and we see that as more important for the future than simply providing affordable EVs. So, there are two different ways of looking to the future,” he said.

THE FUTURE IS GLOBAL

“Even as a young company, Xpeng has always aspired to be a global player,” said Gu.

The company, which was founded in 2014, began selling its cars in the European market in 2021, starting with the Nordic countries of Norway, Sweden and Denmark, where EV penetration is highest in the world outside of China.

“This year, we embarked on what we call our ‘Globalisation 2.0’ strategy as the international [EV] market is ready to grow and explode, just like what we’ve seen in China in the last three years,” he remarked.

China, with its rapid EV adoption rates, has been in a “hyper-growth phase”, with its EV penetration soaring from 10 per cent to 50 per cent in the past three years, said Gu.

In 2023, the Volkswagen Group purchased a 5 per cent stake in Xpeng to develop two VW-branded models for the Chinese market.

“That is the explosion we have witnessed, and I believe the international market will similarly cross the 10 per cent threshold soon. So, the global strategy for us is to focus on the largest, fast-growing auto markets,” he shared.

Continuing its aggressive international expansion, Gu says agreements have been signed for Xpeng to enter other major European markets including Germany, France, Italy, Spain and Portugal, in addition to its existing presence in the Netherlands.

Xpeng already has a footprint in the Middle East as well. “We are selling very well in Israel and have announced our entry into the United Arab Emirates and a host of other countries in the Gulf,” he said.

Asia is another important focus for the brand: “It is also ready to explode, and we have plans for Hong Kong, Malaysia, Thailand and Indonesia.”

In Singapore, Xpeng made its debut with the G6 at an immersive pop-up showroom at UOB Plaza 2 on Jul 24.

The carmaker has thus begun developing right-hand drive versions of its popular G6 and G9 SUVs, as well as its P7 sedan that features the sort of upwards sweeping butterfly doors you find on supercars in order to cater to more markets internationally.

Gu, who joined XPeng in 2018 following a two-decade career in investment banking and mergers and acquisitions, expects global sales to contribute about 10 per cent to its revenue in the next one to two years, and ratchet up to 50 per cent on a long-term horizon.

SEXY, FUTURISTIC AND TECH-SAVVY

Is he worried about the low-quality, low-price connotations associated with the ‘Made in China’ label, though?

“I think there's more opportunity than risk because China EVs are now recognised around the world as being one of the best products on the market,” he maintained.

“Compared with traditional ICE (international combustion engine) cars, there's no baggage of China EVs as being low-quality and low-priced. In fact, they come with a sense of high-tech content, and I think we need to take advantage of that rather than shy away from being [a Chinese brand]. We should be proud to be a Chinese EV product and we’re confident that the China EV label is not a stigma, but is actually the right label to have,” he clarified.

Now the challenge in avoiding being branded as just another China EV brand lies in product differentiation and Gu has outlined a clear strategy to achieve this.

“We want to show global customers that China’s EV makers are not just coming with affordable EV products; we’re coming with best-in-class technology in electrification,” he said. “We have probably one of the best electric powertrains – 800-voltage [architecture] in our G6 and G9 models, which makes them the fastest-charging vehicles in these segments.”

“At the same time, our cars exude a premium, intelligent feel with smart cabins and autonomous driving capabilities, which are the hallmarks of Xpeng products,” Gu added.

“Whereas a lot of products coming from China compete on price and all look and feel the same, we don’t want to have a generic look; we want to be viewed as sexy, futuristic and tech-savvy, and I see a window of opportunity to position Xpeng as a premium Chinese brand and tech leader in this space.