China’s Xpeng gives Tesla run for its money in Europe with new electric car

• The Chinese EV maker is pushing further into Europe, with another electric car model to be sold in Denmark, the Netherlands, Norway, and Sweden.
• The P5 is XPeng’s new, low-priced sedan and it will compete for market share against existing EVs like Tesla’s Model 3.
• The European version of the P5 electric car will be different to the China model XPeng sells

In December 2020, Chinese electric car firm Xpeng began shipping its G3 smart electric SUVs to its first international market, Norway. Six months later, the electric vehicle (EV) maker launched its second production model, the P7 electric sports sedan. By then, the Chinese manufacturer had a goal to deliver 50% of its output to countries outside China in the coming years.

This week, Xpeng started taking pre-orders for its mass-market P5 electric sedan in four European countries, as part of its aggressive international expansion. The P5 was first revealed nearly a year ago in China and can now be reserved by customers in Denmark, the Netherlands, Norway and Sweden.

Shortly before this week’s pre-order announcement,  the Guangzhou-headquartered company opened its first self-operated store outside of China in the Swedish capital of Stockholm last month. Yesterday, Xpeng said it plans to open another store in the Netherlands.

According to the South China Morning Post (SCMP), the European version of the P5 will be slightly different from the one released in China. It will be equipped with Xpilot 2.5, Xpeng’s advanced driver-assistance system, or ADAS, which is a slightly older version of the software than what the company is rolling out to customers in China this year. It is a driving software system with some autonomous features, but where a driver is still required. 

To top it off, Xpeng’s European P5 will also not have Lidar technology, otherwise known as Light Detection and Ranging. Lidar systems can help an electric car measure distances and create a three dimensional representation of the vehicle’s surroundings. Lidar is a key technology behind more advanced autonomous features, but Xpilot 2.5 does not require Lidar to work.

The company has been working on differentiating itself from its rivals by focusing on in-house developed autonomous driving features and other technology. The efforts are an attempt to attract  European consumers while staying competitive in the crowded electric vehicle space.

Xpeng’s VP, Leong H,e said “The Xpeng P5’s arrival in four key European markets is a new demonstration of our commitment to Europe. The P5 brings a host of differentiated features to a new customer base in Europe, a market where we are building ourselves as a long-term player.”

In a previous exclusive interview with CNBC, chairman and VP Brian Gu emphasized that the Chinese electric car startup plans to become a global automaker, allocating for 50% of its vehicle deliveries to go to countries outside China “As a company that focuses on global opportunities, we want to be balanced with our contribution of delivery — half from China, half from outside China — in the long run.”

Overall, XPeng has plans to build its European presence with a combination of self-operated retail stores, alongside the existing distribution and service networks of its local agency partners. Xpeng’s presence in the region is anticipated by many to give EV market leader Tesla a run for its money.

According to data by JATO Dynamics, the Tesla Model 3 was able to break into the top 20 overall best-selling cars in Europe, featuring both combustion engine vehicles and alternative electric. In total, 141,429 Model 3s were registered, up 64% year-over-year from when it was 85,713 registered the year before. The numbers were enough to place Tesla on 17th place among the best-selling cars in Europe. Tesla was also the monthly leader in both December and September.

Europe will not be the first battleground between the US-based and Chinese EV maker. In fact, Tesla has been competing with XPeng along with other Chinese electric car brands like Shanghai-based NIO and Beijing-headquartered Li Auto in mainland China. And now it looks like Chinese EV automakers like NIO and Xpeng have started exploring the European market by exporting their Chinese-made electric cars in the opposite direction.

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