China’s Tesla rival Xpeng sets sights on Europe as it delivers first batch of smart electric cars to Norway
- Xpeng will hand over 100 G3 SUVs to buyers in Norway, the first time that Chinese-made smart EVs will be directly delivered to individual customers in Europe
- Xpeng also plans to launch its P7 electric sports sedan in Europe within the next 12 months
Chinese-made smart electric vehicles are making inroads into Europe as the country’s Tesla challengers eye overseas markets to improve their sales and profitability.
“Xpeng is actively exploring opportunities in other EV-mature markets with supportive government policies, advanced EV infrastructure and high EV awareness,” the company said in a statement on Monday. “Xpeng is also planning to launch its second production model, the P7 electric sports sedan, in Europe within the next 12 months.”
Smart EVs refer to electric battery-powered cars that use technology to enhance navigation, improve in-car entertainment and link up with other cars or mobile devices digitally.
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Inside Chinese electric vehicle maker Xpeng's factory in Zhaoqing city
The G3 SUV, with a driving range of 520km, features Xpeng’s proprietary XPILOT 2.5 advanced driver assistance system and auto parking function.
In 2019, Chinese EV maker Aiways became the first mainland company to export smart SUVs to Europe. The company delivered 500 of its U5 vehicles under a business-to-business deal to Hertz Corse, a car rental firm in Corsica, Italy.
Other Chinese carmakers such as BYD and SAIC started selling conventional electric cars in Europe since the middle of this year.
The lofty valuations are helping these three New York-listed companies raise fresh funds to the tune of nearly US$7 billion through new share issuances.
The Tesla challengers, all of which are yet to make a profit, are racing to fine-tune production, churn out new models and increase sales to secure a foothold both at home and overseas.
“Fresh capital is important to the up and coming electric carmakers as they quicken their pace in new model development and expand sales network to woo more customers,” said Cao Hua, a partner at private equity firm Unity Asset Management. “The recent rallies in the US shows that international investors have high expectations regarding their growth potential, and they have to make better use of the funds [to justify their worth].”
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Nio enhances production efficiency amid rising orders for its electric-powered SUVs
China, the world’s largest new-energy vehicle market, has become a key market for Tesla where it dominates the premium segment. In November, the US electric carmaker delivered 21,604 Model 3 cars built at its Gigafactory 3 in Shanghai.
NIO’s November sales more than doubled to 5,291 cars from last year, Li Auto reported a 25.8 per cent sales jump to 4,646 units, while Xpeng’s sales more than quadrupled to 4,224 units.
Yale Zhang, managing director of industry researcher Automotive Foresight in Shanghai, said the Chinese start-ups have not become a real threat to Tesla in the local market given the massive gap in sales.
“They need to focus on cost reduction to help them price their products competitively,” he said. “Tesla’s leading position is unlikely to be challenged in the near future.”
