Electric car start-up boss is willing to bet his entire fortune on beating Tesla
Xiaopeng Motors chairman He Xiaopeng made a fortune from a mobile web browser business. Now he and other investors are betting that Internet-enabled electric cars are the next big thing.
What do you do for a next act if you’re in your 30s and sitting on millions from selling a successful mobile browser business to China’s biggest online commerce company? Early retirement? Cruise around the world? Buy an island in the Caribbean?
If you’re He Xiaopeng, none of the above.
Now 40, He has taken the money from selling his UCWeb browser business to China’s Alibaba Group and bet it on a car start-up to upend the likes of General Motors, Volkswagen and Tesla.
It seemed so much of a long shot that his wife asked if they will still have money after he is done, to which he replied: “At least we will still have our brains.”
Gambling his wealth away on a whim, however, was far from his mind as He did back-to-back media interviews about Xiaopeng Motors in a suite at the Rio casino hotel off the Las Vegas Strip. Earlier last week, he unveiled his eponymous company’s first production model at the CES technology fair.
“From where I stand, the future will definitely be internet-connected smart cars,” said He, who estimates he would have invested more than 1 billion yuan (US$155 million) of his own money into the venture by next year. “I am confident enough that I’m willing to bet all my wealth.”
Technology companies are entering the automotive industry with their visions for connected smart cars, betting that the future of mobility lies in services and content, not hardware. Electric vehicles (EV) have lowered the bar for entry because they do away with internal combustion engines that require hundreds of precisely engineered parts.
With the focus shifting increasingly away from horsepower to “digital power,” a new breed of car companies like China’s Byton, NIO and Xiaopeng are venturing into territory dominated by GM, Japan’s Toyota Motor and Germany’s VW. The incumbents, in response, are investing billions into the advanced computer sciences that form the backbone for autonomous and connected driving.
If He’s confidence sounds familiar, it is because a generation of Chinese start-up bosses have reaped the rewards of China’s embrace of internet technology and are looking for the next big thing.
Emerging a winner in the so-called Fourth Industrial Revolution, however, is far from a sure thing.
One of the most high-profile Chinese internet entrepreneurs, Jia Yueting, is fighting to revive his fortunes after overstretching his Leshi empire into automobiles, hobbling the group with a mountain of debt and scrutiny from regulators.
His Faraday Future electric-car company made a big splash at last year’s CES, unveiling the FF91 SUV and promising a “next generation of sustainable luxury mobility.”
Xiaopeng Motors, also known as XPENG, had a more subdued unveil of its G3 SUV– the “G” standing for “geek”. Unlike Byton, the Nanjing-based EV start-up that showed its concept car to hundreds of journalists and partners at the Mandalay Bay resort, XPENG held its event at a small stand on the CES show floor.
XPENG’s G3 featured Star Wars-inspired headlights – the auxiliary lamps are shaped like light sabres – and a contour that the company said takes after the shark. Instead of a sunroof, the car has a windscreen that sweeps all the way back to mid-roof, allowing the occupants to look up to the skies.
The model is expected to be priced between 250,000 yuan (US$38,700) and 300,000 yuan when it goes on sale later this year, putting it in the same price bracket as Audi’s Q3, Mercedes-Benz’s GLA and BMW’s X1. Tesla’s Model X starts from about US$118,000 in China.
“I don’t like the term ‘China’s Tesla’, said He, who owns three of the Palo Alto, California-based company’s cars. “We watch and study Tesla intently, but that is different from following them.”
XPENG will have a research team of 600 to 700 staff by the end of the year, and plans to double its annual research and development spending from the current US$100 million, He said.
Alibaba, which owns the South China Morning Post, invested in UCWeb in 2009, before buying the mobile browser and search company entirely in 2014. The e-commerce giant is also an investor in XPENG.
The EV start-up aims to raise 5 billion yuan in its latest financing round by the Lunar New Year holiday in February, according to He. The company was initially co-funded by He and a group of Chinese internet businessmen including Li Xueling, the founder of YY Inc., Fu Sheng, CEO of Cheetah Mobile and Wu Xiaoguang, a senior management adviser from Tencent Holdings.
With a private valuation of more than US$1 billion, XPENG ranks alongside NIO and WM Motor in the ranks of so-called Chinese EV unicorns.
But money alone isn’t enough motivation to get He out of bed each morning. Nor is he afraid of losing it all, he says.
“If today I have the world’s biggest brick-moving business, it doesn’t excite me enough,” said He. “Moving bricks may be a very profitable business, but I’m not willing to do it.”
“At my age, I don’t have to worry [about losing it all]. If I’m 60 or 70, I will worry. As long as the body doesn’t give, as long as one doesn’t have a vile character, one can always earn it back.”