Some of China's wealthiest tycoons steered billions of dollars into electric-car companies in order to fuel the country's dreams of becoming a leader in the field. Now a reckoning may be looming as car sales slow and the government reduces subsidies for the nascent industry. That leaves the flagship companies of Jack Ma, Pony Ma, Hui Ka Yan and Robin Li facing an increasingly steep path to profitability on their bets that electric vehicles can be smartphones-on-wheels connecting passengers to other businesses. Their capital, along with dozens of startups raising $18 billion, helped inflate an electric bubble that now looks to be in danger of popping. China's car market is experiencing a prolonged sales slump, prompting EV-makers to slash earnings outlooks.
China's bid to take the lead in the electric vehicle market moved up a notch with the recent office opening of Xpeng Motors in Silicon Valley. Xpeng is one of several Chinese electric vehicle producers that is vying for this expanding market, along with several potential Tesla killers, among them startup unicorn NIO. China already accounts for about half of global EV sales, boosted by the Chinese government's handouts such as a $15,000 subsidy, a free driver's license and access to many charging stations. Xpeng has a head start among dozens of Chinese EV startups given its connection to Alibaba. Co-founder He Xiaopeng, one of China's Internet tycoons, sold his browser startup to Alibaba in 2014 for $5 billion, and Alibaba backed Xpeng at $350 million with Foxconn and IDG Capital in January 2018 -- along with a who's who of venture investing including Matrix Partners, Morningside Venture Capital and GGV Capital.
Tesla boss Elon Musk is not known for admiring his competition, but when Chinese manufacturer Nio made its 100,000th electric car last week, he offered his congratulations. It was a mark of respect from a chief executive who had been through "manufacturing hell" with his own company. Yet it is also a sign of the growing influence of China's electric carmakers. They are hoping to stake out a spot among the heavyweights of the new industry and bring a significant new challenge to Tesla – and to the rest of the automotive industry as it scrambles to catch up. Tesla mania and cheap money have pushed the market valuations of a clutch of electric carmakers to astonishing levels.
GUANGZHOU, China,--(BUSINESS WIRE)--XPeng Inc. ("XPeng" or the "Company", NYSE: XPEV), a leading Chinese smart electric vehicle ("Smart EV") company, today announced the launch of a long-distance navigation-assisted autonomous driving expedition from March 19 to 26, 2021, covering a total distance of 3,675 km across six provinces in China. The performance of XPeng's newly released autonomous driving assistance function - Navigation Guided Pilot (NGP) - will be fully tested in 3,145 km of highway driving, starting from Guangzhou, all the way north to Beijing. The Xpeng P7 Premium version, equipped with XPILOT 3.0 which supports the NGP function, will be driven by members of the media and third parties during the 7-day drive expedition, the longest driving challenge to date for an autonomous driving assistance function in mass-produced models in China. The total distance of 3,675 km consists of about 3,145 km of highways, where the key functionalities and reliability of the NGP, including automatic highway ramp entering and exiting, automatic switching of highways and optimization of lane choices, automatic lane changing, overtaking and speed limit adjustment, will be fully tested by the press and third parties. The frequency of human driver intervention, and the success rate for the functions listed above, are among the key indicators to be tested in these sophisticated driving scenarios on China's highways. Over the course of 7 days, the fleet of P7s will drive across 10 cities in China in six provinces, starting from Guangzhou, to Shantou, Quanzhou, Wenzhou, Hangzhou, Shanghai, Nanjing, Qingdao, Jinan, finishing in Beijing.
Tesla CEO Elon Musk always said that the mission of the company is to accelerate the advent of electric transport (and later they added renewable energy). They want to achieve that by producing competitive electric cars, but also by accelerating the whole industry's transition, which is why they open-sourced their patents. It hasn't been clear if any company actually took advantage of Tesla's patents yet, but now a new Chinese startup openly references Tesla's technology and the open-sourcing of their patents as the motivation behind the company. Xiaopeng Motors was founded by Henry Xia back in 2014. Xia was working in research and development for the Guangzhou Automobile Group when Tesla announced that they are opening their patents and the young engineer saw an opportunity to create a startup.