Xpeng Motors Founder Talks Tesla and Future of EV Industry

XPeng G3 Motor (Source: XPeng)

He Xiaopeng, founder of Xpeng Motors, recently posted on Weibo his thoughts about the future of the electric vehicle industry, following Tesla’s 17% drop in share price earlier this week. He compared Tesla to Apple but claims that the high margin approach does not translate well from the mobile sector to the automotive sector.

He predicts that as the global transition towards electric vehicles continues, no one player can service the entire world, and he expects many companies to develop and flourish with valuations of over $100 billion. The industry is currently volatile and has been dependent on government subsidies, and following a 70% reduction in subsidies, many companies had difficulties.

SEE ALSO: EV Maker Xpeng Rakes in $400 Million in Series C Funding, Xiaomi Joins as Investor

XPeng Motor’s founder He Xiaopeng posted on Weibo

He’s comparison of Tesla and Apple prompts parallels to the Chinese smartphone market, where Apple has faced fierce competition from domestic players like Huawei and Xiaomi. He continued, describing the domestic players in China as focusing on production and scale, while foreign competitors are more concerned with the level of technology rather than the sales volume. However, Tesla continues to grow their sales, shipping 367,500 cars in 2019, up 50% from 2018, compared to Xpeng’s 2019 total of just over 16,000.

The outbreak of the novel coronavirus has the potential to disrupt Chinese EV producers, who fear that lapses in emergency protocol could spark a further suspension of business. Tesla announced in their quarterly financial results that the company will suspend production at the Shanghai gigafactory until February 10.

The lack of accessibility to China’s robust public transport system during the emergency virus period could cause a boom in demand for private cars, in what has recently been a relatively sluggish auto market.