XPeng calibrates its SUV product line, and the G6 explores cost - reduction and price - cut solutions.

After the G7 was launched with a starting price of less than 200,000 yuan, its price range overlapped with that of the G6.

XPeng's SUV product line next year will include four models, and all four SUVs will also have corresponding extended-range versions. Before the product matrix becomes more complete, XPeng needs to establish a clear price gradient.

01. XPeng Adjusts the Positioning of the G6

We've exclusively learned that XPeng is formulating a cost - reduction plan for the G6. Currently, for the three available models of this car, the cost per vehicle will be reduced by 10,000 to 20,000 yuan. The G6 with the cost - reduction plan applied is expected to go into production in the fourth quarter of this year.

The project code of the current G6 is F30b, and it will be adjusted to F30be etc. after cost reduction. XPeng will replace some of the component suppliers of the G6 while minimizing the impact on quality. There will be no obvious changes in the core product features such as styling and functions.

The purpose of cost reduction is to lower the future selling price of the G6 as a whole. In early July this year, the new XPeng G7 was launched with a starting price of 195,800 yuan, lower than the outside world's expectations. The G7 is positioned as a mid - to large - sized pure - electric SUV. The top - end version priced at 225,800 yuan is equipped with three self - developed Turing AI chips by XPeng. He Xiaopeng said it is the first AI car with L3 - level computing power.

The product positioning of the G7 is higher than that of the G6 in many aspects. It is not only larger in size but also has higher - end configurations in the cockpit. For example, it has an additional AR - HUD developed in cooperation with Huawei, and the second row is equipped with an independent screen.

However, there is an overlap in the price ranges of the two cars. The new G6 on sale was launched in mid - March this year, priced between 176,800 and 198,800 yuan. The price of the high - end version exceeds the starting price of the G7.

XPeng G6

We've learned that XPeng's SUV product line next year will include at least four models. In addition to the three models that have already been launched, a new model codenamed D03 will be put into production at the Wuhan factory. D03 will replicate the positioning of the MONA M03 in the SUV market. For reference, the price of the M03 is between 119,800 and 139,800 yuan. In the future, all four SUVs are planned to gradually launch extended - range hybrid versions.

Before more new cars are launched, XPeng urgently needs to clarify the positioning of each model in its SUV product line and establish a clear price gradient.

Internal competition among models is a big no - no for car companies. In particular, the G6 and G7 share a large amount of R & D resources. In terms of many intuitive feelings such as styling, the two cars have many similarities. Although the high - end version of the G6 and the low - end version of the G7 target different user groups, the adjacent prices still cause some confusion for consumers when making a choice.

In 2022, when XPeng launched the G9, it had a very complex SKU design, offering up to six models and various optional packages, which increased the consumers' understanding cost. As a result, this flagship car fell into a reputation crisis, forcing XPeng to urgently adjust its product strategy and configuration plan. After that, XPeng's new cars strive for simplicity, and the number of available models is generally controlled between three and four.

XPeng currently has three SUVs on sale. The G9 is priced between 240,000 and 270,000 yuan, with a price difference of 20,000 yuan from the G7. Only the G6 and the G7 have a relatively close price range. After the launch of the G7, the G6 needs to be re - positioned.

02. The Test of the Supply Chain

The G6 was first launched in the middle of 2023. Initially, its price range was as high as 200,000 to 270,000 yuan, targeting the Tesla Model Y, but the result was not ideal.

Last year, XPeng successfully created two popular sedans, the MONA M03 and the P7+. XPeng changed its previous approach. These two cars no longer force high - end technological configurations on all users but offer higher cost - effectiveness while still retaining the core intelligent features. Since then, many of XPeng's facelifted models have continued this strategy.

In March this year, the G6 was facelifted and launched again, with the price controlled below 200,000 yuan. This was a quite effective facelift. Before the facelift, the monthly sales of the G6 were between 2,000 and 4,000. After the facelift, the sales have been stable at over 5,500 units for three consecutive months, becoming the model with the third - highest sales within the brand after the MONA M03 and the P7+.

However, the current performance of the G6 has not reached the level of a blockbuster. Currently, only the MONA M03 of XPeng has a stable monthly sales volume of over 10,000 units. In the first half of this year, this model contributed about 40% of XPeng's brand sales. Therefore, further price reduction of the G6 can not only clearly distinguish its positioning from the G7 but also implement the high - cost - effectiveness product strategy more thoroughly.

Although the goal is clear, whether the specific cost - reduction path is reasonable and effective is still a key challenge to XPeng's systematic capabilities. We've learned that XPeng has re - evaluated and selected suppliers for multiple parts projects of its new models. Cost reduction is only one of the purposes of this measure.

He Xiaopeng once suffered losses in procurement. The component cost of XPeng used to be higher than that of many car companies. Now, this is one of the fields he personally takes charge of and manages very meticulously, and he has established many cross - departmental horizontal processes for this purpose.

He Xiaopeng, Chairman and CEO of XPeng Motors

However, this has also led to a more complex operation of the entire system. For the finalization of a component, there are often multiple managers such as the project leader, platform leader, and professional manager. Coupled with XPeng's frequent product strategy adjustments, it has become difficult to establish a stable relationship between the vehicle manufacturer and parts suppliers.

A stable relationship between the vehicle manufacturer and parts suppliers is a core competitiveness of automobile enterprises. This not only affects cost and quality but also serves as the foundation for mature car companies and suppliers to carry out joint R & D and jointly promote and maintain technological progress over a longer period. Even in China, within a few kilometers around Toyota's vehicle factories, most of its core suppliers are usually concentrated.

Among domestic new - energy vehicle startups, Leapmotor has borrowed a similar parts strategy to Toyota. This is one of the reasons why they can maintain cost competitiveness despite their relatively small scale. Leapmotor conducts self - R & D and self - production of key components, such as car lights; for components with high technical thresholds or strict scale requirements, they are solved through joint - venture methods, such as seats. In this way, a stable supply relationship is established.

Leapmotor conducts self - production in key cost items, such as car lights, and solves items with high thresholds through joint - ventures, such as seats. By this means, it maintains a stable supply relationship and gains a cost - effectiveness advantage.

XPeng's goal is clear: to transform from a technology company into a company with a large - scale manufacturing gene. However, how to build a mature system that can continuously produce high - cost - effectiveness products is still a topic that it needs to explore in depth.

This article is from the WeChat official account "Automobile Pixel". Author: Xing Ruifang, Editor: Mao Shiyang. Republished by 36Kr with permission.