XPeng Launches $25,000 to $35,000 P5 Electric Sedan — How Many Will XPeng Sell?

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XPeng has just dropped a massive hammer on the Chinese EV market. Despite being a smart electric car, which includes having a great infotainment system and lidar for semi-autonomous driving support, XPeng’s new P5 model has a starting price of just RMB 160,000 to 230,000 (after subsidies), which translates to $24,875 to $35,760.

I was just on a conference call with the company and a few others in the press where Vice Chairman and President Brian Gu brought up a comparison to the top-selling Toyota Camry and Honda Accord. That’s a natural comparison, given the price and size. Though, the truth is that the P5 will likely have both much better tech and much better performance, which raises the question: How many P5s can XPeng sell? So, I asked about the company’s mid-term to long-term plans in that regard.

Gu responded that XPeng is excited that it’s going after this hot, mass-market segment so quickly — essentially being the pioneer in this price range for the quality of vehicle on offer. However, he also responded that converting gas engine vehicles to electric vehicles won’t happen overnight. “It’s a process.” Public awareness of the new tech and interest in the new tech doesn’t flip 100% overnight. He also brought up the need for better charging infrastructure in cities, which is where the large majority of XPeng’s customers reside, as indicated later on the call. Reading between the lines a little bit as well, I take the answer to mean that, first of all, XPeng needs time to scale up production, and it doesn’t want people to get too high of expectations at this point; and, secondly, that there are indeed still consumer awareness barriers and infrastructure barriers that will take at least a few years to resolve in order to reach mass-market car volumes like the Camry sees. Nonetheless, being a leader in this market segment with a compelling EV puts XPeng in a good position and it is very happy with the accomplishment.

Also, make no mistake: this is a compelling smart electric vehicle that, objectively, should beat a Camry in any head-to-head comparison. The biggest thing the Camry has going for it is lack of consumer awareness. Beyond all the normal EV advantages with regards to torque, drive smoothness & quiet, convenience of home & workplace charging (if you have that available to you), and computer-on-wheels features, XPeng designed this vehicle with a very open infrastructure that provides possibilities owners haven’t seen previously. For example, the P5 offers a Sleeping Mode in which the interior of the car basically turns into a bed, and also a Cinema Mode in which the driver and passengers can take a break and enjoy the large screen and related infotainment options. This is the future, and XPeng is there.

Sebastian Blanco asked about international sales plans. Brian Gu responded that they would create a European version, just like they did with the P7, and that it will hopefully be on the market within a year.

Another journalist asked about the challenges foreign automakers have had selling EVs in China. “It’s not like foreign players are not successful in China. Tesla is hugely successful in China,” Gu responded. He offered, in essentially the most polite way possible, that it was lack of compelling product offerings that is really why some major global legacy automakers are not selling EVs in high volumes in China. But if any companies come to market with a “more innovative, technology-driven mindset; more cool products,” they can find success in the Chinese market as well, Gu argued. He again referenced Tesla, not shying away from acknowledging its success in the market while clearly showing that the difference is largely between new “smart” EVs & EV companies and an older mindset or process that has to battle the inertia of how cars used to be designed and built — not as large computers on wheels. Interestingly, Gu really doesn’t spend energy or time criticizing or shaming legacy automakers. He has a refreshing matter-of-fact style when talking about these things and an openness to others.

I asked for a bit more perspective on the range of the P5 in different driving scenarios in the real world. Gu pointed out that the company had a third party test the vehicle range in the real world. The official range varies from 460 km (285 miles) in base package to 600 km (373 miles) in premium version, and the third-party testing company found close to 95% or 97% accuracy with the official range, respectively, driving in the city. He did not indicate whether it was tested on the highway and how much range dropped there, but we all know that highway range is lower than city range to some extent.

Asked about production challenges related to the ongoing automotive chip shortage, Gu said that they expected the chip shortage to continue at least through the first half of 2022. (Though, needing a somewhat gradual production ramp-up, that could hopefully be fine anyway.) They hope things will look better buy this time next year, but it seems that no one really knows. On the plus side, he also mentioned that the P5 and P7 use different chips and suppliers, so not all of XPeng’s eggs are in one basket.

I also brought up the rumored $25,000 Tesla that is in development and asked about whether customers were peppering XPeng with questions about offering such a low-cost model in this segment before the P5 was revealed. Gu noted that they started designing the P5 long before Tesla started talking about developing an electric car in this segment — which is clear if you consider how long this process takes and recognizing that the P5 is already arriving. A car like this takes years of development and was always in the company’s plans. “We are launching a product in this segment ahead of others,” Gu noted proudly and with some inspiration and excitement in his voice, and Tesla is clearly a bit behind the company in this regard. In fact, we have little clarity about when a “Tesla Model C” or whatever the car will be called will be revealed, let alone hit the market.

I asked about whether the P5 is less advanced than the P7 with regards to some of its smart features, and Gu emphasized that the P5 is actually more advanced than the P7 in terms of semi-autonomous driving tech and capability, thanks in part to the additional lidar. However, the P7 does have two screens instead of one in the infotainment system and better screen resolution. Also, there are simply some more premium features that you get with the P7 and not the P5 — it is a more expensive, larger car after all.

Another journalist asked about the type of people buying XPeng vehicles — if they are primarily just engineers/techies as rumor goes. Gu noted that they actually have a very wide range of buyers across XPeng models — “the only common thread we can conclude is these are city drivers, higher-income/middle-income drivers … people who are young or young at heart.” They are people working in the media, government, education, and beyond — not just the tech sector — and that they are people who “really want to embrace innovation.” XPeng certainly seems to abound in innovation.

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Zachary Shahan

Zach is tryin' to help society help itself one word at a time. He spends most of his time here on CleanTechnica as its director, chief editor, and CEO. Zach is recognized globally as an electric vehicle, solar energy, and energy storage expert. He has presented about cleantech at conferences in India, the UAE, Ukraine, Poland, Germany, the Netherlands, the USA, Canada, and Curaçao. Zach has long-term investments in Tesla [TSLA], NIO [NIO], Xpeng [XPEV], Ford [F], ChargePoint [CHPT], Amazon [AMZN], Piedmont Lithium [PLL], Lithium Americas [LAC], Albemarle Corporation [ALB], Nouveau Monde Graphite [NMGRF], Talon Metals [TLOFF], Arclight Clean Transition Corp [ACTC], and Starbucks [SBUX]. But he does not offer (explicitly or implicitly) investment advice of any sort.

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