Xpeng CEO expects 100,000 annual new EV sales through Didi partnership

Xpeng Motors chief government He Xiaopeng stated on Monday that he anticipates annual sales for an upcoming mannequin, co-developed with Didi Chuxing underneath a new model, to succeed in 100,000 items, in an surprising partnership between the electrical automobile maker and the ride-hailing platform.

Why it issues: The transfer marks Xpeng Motors’ newest effort to increase its product lineup and prolong its model attain into the fleet market. The alliance is predicted to assist Xpeng considerably scale back prices and generate economies of scale within the manufacturing of extremely autonomous automobiles, stated He.

• While the deal will assist Xpeng speed up its EV manufacturing development and facilitate the event of self-driving applied sciences with extra driving knowledge, it might probably assist Didi monetize its sensible auto phase and entice drivers with autos appropriate for ride-hailing, Bernstein analysts wrote on a Monday observe.
•  Nonetheless, doubts have been voiced over Xpeng’s formidable sales purpose, citing restricted market measurement and fierce competitors. “BYD was the only OEM (Original Equipment Manufacturer) to deliver more than 100,000 units, and the remaining top players all have their own ride-hailing affiliates,” wrote Bernstein analysts.

Details: Speaking to Chinese reporters throughout a media briefing, CEO He expressed confidence within the forthcoming A-class sedan, scheduled for manufacturing subsequent yr. He believes the mannequin will improve Xpeng’s efficiency, however doesn’t specify a timeframe for his annual sales quantity purpose. The firm delivered 41,435 EVs for the primary half of this yr with six namesake-branded fashions on sale.

• The EV startup is presently growing the mannequin with help from Didi underneath a venture codenamed Mona. He believes that this might develop into “a hit product” that includes Xpeng’s self-driving know-how at an anticipated price ticket of round RMB 150,000 ($20,594). 
• The compact sedan may also be the primary mannequin underneath a new mainstream sub-brand, which He stated will likely be positioned to focus on the Chinese shopper EV phase whereas additionally facilitating Xpeng’s enlargement throughout the fleet market phase.
• As a part of the collaboration, Xpeng will purchase Didi’s sensible EV enterprise, which includes the design, analysis, and improvement of EVs with clever options. This acquisition will likely be completed through the issuance of roughly HK$5.84 billion ($744 million) price of new shares to Didi.
• China’s greatest ride-hailing service will develop into a strategic investor in Xpeng with a stake of three.25% after the deal,  serving to take Xpeng’s newly branded EVs nationwide by way of its sturdy shared mobility market, in keeping with a press release. 
• In Hong Kong, Xpeng’s shares surged 10.9% to HK$72.2 on Monday following the announcement. 

Context: The information comes a month after Guangzhou-based Xpeng introduced a collaboration with Volkswagen to collectively launch two VW-branded B-class EVs in 2026. B-class autos are usually bigger than A-class autos and have bigger engines.

• Xpeng shouldn’t be the one Chinese EV maker exploring new model choices to succeed in a wider buyer base. Rival Nio has just lately made notable progress within the improvement of two entry-level manufacturers codenamed Alps and Firefly, with each scheduled for launch in 2024. 
• Didi initially had formidable plans for its carmaking enterprise, assembling a workforce of 1,700 staff devoted to engaged on the venture, with the goal of releasing a shopper EV in mid-2023, a number of Chinese media shops reported. It even launched a battery-electric hatchback tailored for ride-hailing in collaboration with BYD in November 2020, Bloomberg reported. 
• However, the ride-hailing large had been underneath an 18-month investigation for alleged nationwide safety points which started proper after its mega-public itemizing on the New York Stock Exchange in June 2021. Meanwhile, Chinese authorities have imposed strict rules on the discharge of EV manufacturing licenses in recent times.

READ MORE:What to anticipate from Volkswagen and Xpeng’s new partnership