XPeng may start to integrate its product lines, and the possibility of production cuts cannot be ruled out.
Chaotic product line, expected to be integrated in the second half of the year
A source close to XPeng Motors told the editorial department of "Zhiwei" that currently, XPeng Motors is not very optimistic about the market outlook and is considering integrating its product line in the second half of the year, with the possibility of reducing production.
Meanwhile, there are indeed some voices in the market saying that XPeng Motors' product matrix is bloated and suffers from severe internal strife.
From the current XPeng Motors models on the market, it can be seen that XPeng Motors' product matrix is "large and comprehensive". It covers three major categories: sedans, SUVs, and MPVs, as well as four sizes: small, compact, medium, and mid - large, with different configuration versions for each size. Different from Li Auto, which focuses on "family", NIO, which focuses on "luxury", and Xiaomi Auto, which focuses on "sports", XPeng Motors seems to want to incorporate every style.
In terms of configuration versions, the XPeng G9 failed at the beginning of its launch due to overly complicated configuration options. When the XPeng G9 was officially launched in September 2022, the company had high hopes for it and set a goal of achieving monthly sales of over 35,000 units within three months. In reality, due to a large number of overlaps and optional configurations among different versions of the G9 at the time of launch, which confused consumers, and combined with relatively high pricing, the sales volume of the G9 in 2022 was only 6,373 units, dragging down XPeng Motors' overall performance. Subsequently, the price of the car was continuously reduced, with the starting price dropping as low as 263,900 yuan, and the model was updated, but even so, the decline of the G9 could not be reversed.
From the perspective of the product matrix, the product line setting of XPeng Motors' "P series" models is also a bit confusing. The previously launched XPeng P5 targeted the 150,000 - 200,000 yuan family car market. However, most family users in this price range are price - sensitive and value practical configurations such as space and range more than the additional intelligent driving functions, resulting in a disconnection between the car's core selling points and market demand.
Meanwhile, the positioning of this car conflicts with the more cost - effective MONA M03, and its intelligent technology configuration is similar to that of the XPeng P7. After the launch of the MONA M03, the monthly sales of the XPeng P5 dropped sharply from 864 units in August 2024 to 109 units in September. Currently, although XPeng Motors has not issued an official announcement to discontinue the entire P5 series, the car is virtually close to being taken off the market.
In addition, XPeng Motors launched three derivative models of the P7 within three years, but they are not traditional upgrades. In 2023, the company launched the P7i, positioned as a "technical upgrade" of the original P7, strengthening the "sports coupe" label. A year later, XPeng Motors launched the P7+, targeting the "family - comfort" market. The latter encroached on the market of the P7i, and the P7i was discontinued. The monthly sales of the still - on - sale XPeng P7 have also been completely eroded by the P7+, with only 53 units sold in June. This year, XPeng Motors will launch a new version of the P7, which may seize the market share of the P7+. All three belong to the P7 series but target different markets and compete with each other, which is really confusing.
Moreover, with the launch of the volume - driving model MONA M03, the brand positioning of XPeng Motors has further declined. In the past, as one of the "Wei Xia Li" (NIO, XPeng, Li Auto), although XPeng Motors' positioning was not very high - end, it could still be regarded as a mid - range brand. The failure of the brand - upgrading plan of the G9 and the "ride - hailing car" label attached to the MONA have led to a decline in XPeng Motors' brand positioning in the minds of consumers.
Facing the current situation of internal strife among some product lines, a large gap in sales volume between models in the same price range, and the decline of brand positioning, XPeng Motors does have the possibility of adjusting its product line.
It is worth noting that there are also many negative news about XPeng Motors on social networks. For example, on July 18th, Observer.com reported that owners of the XPeng P7+ in multiple regions reported that the steering system of the vehicle malfunctioned during normal driving, and the steering wheel was extremely heavy to operate, affecting normal driving. Earlier, some XPeng car owners also reported on social media that XPeng's intelligent driving system failed during high - speed driving, almost causing a major accident.
Although these incidents have not caused a serious public opinion crisis for XPeng Motors, for any car company, driving safety is always the top priority. While adjusting the product line, XPeng Motors also needs to pay attention to product production quality.
Re - embracing lidar
As Yu Kai, the founder and CEO of Horizon Robotics, said, XPeng Motors has always regarded intelligent driving ability as its core competitiveness. Another controversy surrounding XPeng Motors lies in its core competitiveness, specifically its wavering intelligent driving sensor solution.
In 2018, He Xiaopeng, the chairman of XPeng Motors, clearly stated: "The camera solution has great potential and room for improvement." XPeng Motors became the first new - energy vehicle company to publicly support the pure - vision solution. However, limited by various factors, XPeng Motors has often used a multi - sensor intelligent driving solution with lidar in the past.
It wasn't until June 2024, after He Xiaopeng test - drove FSD V12 in the United States and returned to China, that he quickly announced that the new car P7+ in the second half of the year would abandon lidar and switch to a pure - vision solution. At the end of last year, Li Liyun, the person in charge of XPeng Motors' intelligent driving, announced that all MAX models of XPeng Motors in 2025 would be standard - equipped with a pure - vision solution.
On the surface, XPeng Motors seems to be firmly embracing the pure - vision route. Xi Shaohua, an analyst at EqualOcean, said that XPeng Motors' choice of the pure - vision route at this stage is mainly based on three reasons.
The most important one is the cost factor. Currently, although the price of lidar has dropped to the thousand - yuan level, the cost is still higher than that of cameras, which cost only a few hundred yuan. According to a 2023 Goldman Sachs research report, the bill of materials (BOM) cost of XPeng Motors' ADAS is about 25,000 yuan, which is at the middle level in the industry. To further reduce costs and increase efficiency, replacing lidar with more advanced cameras has become one of XPeng Motors' cost - reduction methods.
In addition, the core of XPeng Motors' intelligent driving system is the VLA (Vision - Language - Action) model, which is also one of the mainstream intelligent driving solutions in China at present. The VLA model can process lidar point - cloud data and image data. "However, the VLA model uses the pre - trained VLM as its 'brain', and mainstream VLMs are trained on a large amount of image - text data. In terms of adaptability, the image data provided by cameras are more suitable for this model." Xi Shaohua mentioned. For the intelligent driving system, the image data from pure cameras also make the decision - making process faster, as it eliminates the process of fusing lidar perception information.
Moreover, Xi Shaohua added that for the currently open usage scenarios of L3 - level intelligent driving, a pure - vision intelligent driving system is completely sufficient, at least for the next two to three years.
However, a source close to RoboSense, a lidar company, told the editorial department of "Zhiwei" that although XPeng Motors is currently on the pure - vision route, due to the large number of corner cases in actual driving, XPeng Motors may reinstall lidar in the future. Employees within XPeng Motors have also confirmed this news to "Zhiwei". At the L3 stage, XPeng Motors will adopt the pure - vision intelligent driving route, while lidar redundancy will be used for L4 - level autonomous driving.
"If XPeng Motors decides to reinstall lidar in the future, it will not bear significant incremental costs. In the early stage, the integration of sensors such as lidar and models was still in the exploration stage, with a long development cycle and high cost. However, currently, lidar and related technologies are very mature in China. Even if XPeng Motors wants to reinstall lidar in the future, it will not affect its existing position in intelligent driving or the development speed of intelligent driving iteration." Xi Shaohua mentioned.
In other words, due to multiple factors such as cost, XPeng Motors has chosen the pure - vision intelligent driving solution at this stage. As the industry as a whole evolves towards higher - level autonomous driving, XPeng Motors will still return to the multi - sensor fusion route and continue to embrace lidar. This series of dynamic adjustments to the sensor strategy will neither slow down the iteration rhythm of XPeng Motors' intelligent driving ability nor cause it to lag behind in the L4 competition.
This article is from the WeChat official account "Zhiwei". The author is Jinli, and the editor is Dabing. It is published by 36Kr with permission.