XPeng Motors announces new AI-centric brand targeting EVs priced as low $14,000
Leading Chinese EV automaker XPeng Motors has publicly shared plans for a new EV brand to deliver affordable, AI-driven smart cars to young consumers. Targeting China’s A-class segment of EVs priced between RMB 100,000-150,000, XPeng’s new brand could help pave the way for more affordable EVs around the globe.
XPeng Motors ($XPEV), although still relatively young in the automotive industry, sits as a veteran in Chinese EV development and the adjacent technologies that support electric mobility.
In addition to designing, developing, and manufacturing its own EV hardware and top-tier ADAS software, the XPeng umbrella also develops charging technology, robots, and even has its own advanced air mobility (AAM) arm called AeroHT – which is developing eVTOLs and actual flying cars.
Such investments are starting to pay off as well. XPeng Motors recently posted its Q4 2023 sales numbers which included record revenues, significantly lower net losses, and an upward tick of gross margins into positive territory.
With expansions to new markets like Europe, Egypt, and the Middle East continuing in 2024, XPeng Motors has announced a new EV brand that will initially launch in China, and its targeted pricing is hard not to get excited about.
New XPeng brand to provide “AI-driven user experience”
XPeng Motors shared details of the new EV brand earlier today, which arrives as a culmination of previously laid plans for new vehicle technologies. During its annual 1023 Tech Day 2023, XPeng expressed a commitment to deploy more AI in its mass-produced EVs, including cognitive assistant functions.
During the recent China Electric Vehicle 100 Summit, XPeng Chairman and CEO He Xiaopeng shared big plans for the automaker’s “AI-enabled smart driving” technology, vowing to invest RMB 3.5 billion (~$492M) in 2024 alone toward the R&D of artificial intelligence and the firing of 4,000 new employees.
Today we’ve learned XPeng’s AI and ADAS technology won’t just be featured on its namesake EVs but in a new, more affordable brand as well. The unnamed sub-brand will launch in China soon, although XPeng says it will “create a new breed of AI-powered Smart EVs for young customers worldwide.”
XPeng’s Chairman and CEO recently said the next decade of EVs will be one of intelligence and smart driving technology. As such, the new brand will deliver AI-centric tech at an affordable price for all, targeting RMB 100,000-150,000 ($14,000-$21,000). Per XPeng’s release:
Vehicles priced between 100,000 to 150,000 yuan have long been the mainstream choice for Chinese consumers. With over 8 million cars sold every year, this price segment possesses abundant market demand, strong development potential, and increasing market share. According to data from the China Passenger Car Association, in 2023, the market share of vehicles priced between 100,000 to 150,000 yuan accounted for approximately 34% of the market, compared to about 31% in 2022. At the same time, the penetration rate of new energy vehicles in this price range is also continuously increasing. However, there are few products in this market segment that offer smart driving functions, let alone AI-driven smart driving.
With its new brand, XPeng intends to tap into a popular EV segment in China and try to dominate by providing technology and smart driving functions that consumers normally don’t gain access to at that price point.
This appears to begin with a lone EV model (teased above), but XPeng says its new brand will continue to introduce multiple models with varying levels of intelligent driving capabilities. We could very well see this new marque eventually expand beyond China, as XPeng is already describing it as an ” entry into a new stage of multi-brand global strategic operation.”
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EV sales kept up their momentum in December 2024, with incentives playing a big role, according to the latest Cox Automotive’s Kelley Blue Book report.
December’s strong EV sales saw an average transaction price (ATP) of $55,544, which helped push the industry-wide ATP higher, according to Kelley Blue Book. The December ATP for an EV was higher year-over-year by 0.8%, slightly below the industry average, and higher month-over-month by 1.1%. Tesla ATPs were higher year-over-year by 10.5%.
Incentives for EVs remained elevated in December, although they were slightly lower month-over-month at 14.3% of ATP, down from 14.7% in November.
EV incentives were higher by an impressive 41% year-over-year and have been above 12% of ATP for six consecutive months. Strong sales incentives, which averaged more than $6,700 per sale in 2024, were one reason EV sales surpassed 1.3 million units last year, according to Cox Automotive, a new record for volume and share.
(My colleague Jameson Dow reported yesterday, “In 2024, the world sold 3.5 million more EVs than it did in the previous year … This increase is larger than the 3.2 million increase in EV sales from the previous year – meaning that EV sales aren’t just up, but that the rate of growth is itself increasing.”)
Kelley Blue Book estimated that in December, approximately 84,000 vehicles – or 5.6% of total sales – transacted at prices higher than $80,000 – the highest volume ever. KBB lumps gas cars and EVs together into this luxury vehicle category, so this is where Tesla Cybertruck is slotted.
However, Tesla bundles sales figures of Cybertruck with Model S, Model X, and Tesla Semi(!) into a category it calls “other models,” so we don’t know for sure exactly how many Cybertrucks Tesla sold in Q4, much less in December. However, Electrek‘s Fred Lambert estimates between 9,000 and 12,000 Cybertrucks were sold in Q4, and that’s not a stellar sales figure.
What will January bring when it comes to EV ATPs? What about tax credits? Check back in a month and I’ll fill you in.
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Tesla is now claiming that Cybertruck was the ‘best-selling electric pickup in US’ last year despite not even reporting the number of deliveries.
There’s a lot of context needed here.
As we often highlighted, Tesla is sadly one of, if not the most, opaque automakers regarding sales reports.
Tesla doesn’t break down sales per model or even region.
For comparison, here’s Ford’s Q4 2024 sales report compared to Tesla’s:
You could argue that Tesla has fewer models than Ford, and that’s true, but Tesla’s report literally has two lines despite having six different models.
There’s no reason not to offer a complete breakdown like all other automakers other than trying to make it hard to verify the health of each vehicle program.
This has been the case with the Cybertruck. Tesla is bundling its Cybertruck deliveries with Model S, Model X, and Tesla Semi deliveries.
Despite this lack of disclosure, Tesla has been able to claim that the Cybertruck has become “the best-selling electric pickup truck” in the US in 2024:
It very well might be true. Ford disclosed 33,510 F-150 Lightning truck deliveries in the US in 2024 while most estimates are putting Cybertruck deliveries at around 40,000 units.
Those are global deliveries, but Tesla only delivered the Cybertruck in the US, Canada, and Mexico in 2024, and most of the deliveries are believed to be in the US.
However, there’s essential context needed here, as we highlighted in our recent ‘Tesla Cybertruck sales are disastrous‘ article.
First off, Tesla had a backlog of over 1 million reservations for the Cybertruck that it has been building since 2019. This led many to believe Tesla already had years of demand baked in for the truck and that production would be the constraint.
However, based on estimates, again, because Tesla refuses to disclose the data, Cybertruck deliveries were either flat or down in Q4 versus Q3 despite Tesla introducing cheaper versions of the vehicle and ramping up production.
Again, that’s after just about 40,000 deliveries.
Furthermore, with almost 11,000 deliveries in Q4 in the US, Ford more likely than not outsold Cybertruck with the F-150 Lightning in Q4.
Electrek’s Take
Tesla is in damage control here. There’s no doubt that it is having issues selling the Cybertruck.
Inventory is full of Cybertrucks and Tesla is now discounting them and offering free lifetime Supercharging.
Tesla is great at ramping up production, and it’s clear the Cybertruck is not production-constrained anymore. It is demand-constrained despite having over 1 million reservations.
Again, those reservations were made before Tesla unveiled the production version, which happened to have less range and cost significantly more.
The upcoming cheaper single motor version should help with demand, but I have serious doubts Tesla can ramp this program up to more than 100,000 units in the US.
As a reminder, Tesla installed a production capacity of 250,000 units annually and Musk said he could see Tesla selling 500,000 Cybertrucks per year.
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