Chinese electric vehicle (EV) company Xpeng has recently announced to launch a new and more affordable brand, indicating its plan to expand its production and capture a significant part of the electric car sales. The move comes during a time when companies are trying to get their share of the EV market that is booming in China.
Tapping into the budget segment
Xpeng’s objective to induct a budget-oriented brand was mainly to address the increasing call of an affordable electric vehicle. The producers are planning to put their models with the prices between 100,000 yuan and 150,000 yuan (11,000 – 16,500 pounds) on the market whose objective is to engage with consumers who like electrical motive and saving money at the same time.
Competitive landscape
EV market in China has come to a very cut throat race between manufacturers who are always struggling to be “best buys” to their customers. The pioneer BYD has been leading in the barricade of discounts until mass brands like Xpeng also have joined the price trailing. The fact that Xpeng wants to attract budget-conscious customers highlights the prospect of gaining a competitive advantage and opening up new opportunities in expansion.
Strategic pricing
Xpeng’s pricing plan positions the new brand in an extremely low pricing group,while the prices of premium EV companies’ cars may be as high as 300,000 yuan to 200,000 yuan (£33,000 – £22,000). Through their strategy of providing more cost-effective solutions, the company will be achieving the target of democratizing access to electric transport and eventually catch the attention of a greater number of clients.
Focus on intelligent driving
The new Brand is going to comprise models covering the entire spectrum of smart driving abilities from level one to level five, showing Xpeng’s ambition to continuously make breakthroughs in the development of innovative technologies. This company tries the achievement of the AI-aided driving by which attracting the tech-oriented and young consumers is possible and they appreciate the latest innovations and characteristics.
Addressing market slowdown
Despite the partial slowdown in the country, overall resource utilization in the EV sector is going to increase. Battery-powered EV distribution recorded 18.2 % revenue increase in the first half of the year in contrast with 20.8% over the previous year’s full sales. Xpeng’s foray into the budget segment could potentially stimulate demand and revitalise market growth.
Future outlook
With Xpeng now fully into an all-new brand launch, the company may encounter both potential and risks in the market fields already crowded. By using the budget market segment as a door-opener, Xpeng creates an opportunity to expand its market share. However, the company faces the challenge of balancing the quest of capturing a larger space with the need to stand out among others amid intense price competition. On the contrary, Xpeng that moves forward innovative solutions and customer value are expected to capture even larger share of the famously dynamic and competitive EV sector.