Xpeng to Unveil Cheap EV Brands as China Price War Intensifies

Xpeng, a Chinese electric-vehicle maker known for its stylish and pricey EVs, has announced plans to launch a cheaper brand.

The move comes amid growing competition in the domestic car sector and greater pressure on prices because of the country’s economic slowdown.

New models being launched within the next month will be priced between 100,000 yuan and 150,000 yuan ($14,000-$21,000), Xpeng chairman and CEO He Xiaopeng told an industry event in Beijing on Saturday.

The news – posted on the company’s official WeChat account – represents a significant price drop from the 200,000-300,000-yuan range in which premium EV makers generally sell their cars.

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Competition in China’s EV market has intensified as companies race to cut prices, with market leader BYD spearheading a deeper round of price reductions.

Xpeng said it will successively introduce models under the brand, which it did not name, each with different levels of intelligent driving capabilities. The new brand is dedicated to creating “the first AI-assisted driving car for young people”, it said.

Sales of battery-powered EVs in China slowed to 18% in the first two months of the year from 20.8% for all of 2023, according to the China Passenger Car Association.

Tesla to raise price of Model Ys in Europe

In related news, Tesla said on Saturday it would increase the price for its Model Y electric vehicles (EV) in a number of European countries on March 22 by approximately 2,000 euros ($2,177) or the equivalent in local currencies.

The move, announced in a post on social media platform X, followed the automaker’s announcement on Friday that it would increase prices for all Model Y cars in the US by $1,000 on April 1.

Tesla had raised the prices of its Model Y rear-wheel drive and long-range vehicles by $1,000 to $43,990 and $48,990, respectively, on March 1.

“This is the essential quandary of manufacturing: factories need continuous production for efficiency, but consumer demand is seasonal,” Tesla CEO Elon Musk said in February, replying to a post on X from his company announcing that prices would go up the following month.

Tesla’s margins have been hurt by a price war with rivals that started more than a year ago.

In January, Tesla warned of “notably lower” sales growth this year as it focuses on the production of its next-generation EV, which is code-named “Redwood.”