Chinese EV-maker’s stocks rallied on April 17 after XPeng unveiled a new production process that supposedly will lower costs, namely SEPA 2.0. The smart EV maker defines SEPA 2.0 as a “next-generation end-to-end integrated technology architecture.”
Per the press release, the updated Smart Electric Platform Architecture can potentially streamline R&D cycles by 20%.
“It will make rapid advancements in technology available for our customers as standard, with faster software upgrades, stunning cost savings and elevated product experience.”
XPeng Chairman and CEO He Xiaopeng
As mentioned, XPeng stocks rallied over 11% on Monday along with other Chinese electric automakers, NIO and Li Auto.
What’s the big deal?
XPeng President Brian Gu claims that SEPA 2.0 will reduce powertrain system expenditures, including EV batteries, by at least 25%.
As a result of the advancement, XPeng will be able to save expenses across its whole portfolio, benefiting vehicles ranging from compact sedans to hatchbacks and pickup trucks.
It is worth noting that the launch of SEPA 2.0 occurs as XPeng’s deliveries have declined for four consecutive quarters. For context, the Chinese automaker’s deliveries fell 46.8% YoY in the latest quarter. Meanwhile, its Chinese rivals enjoyed delivery growth amid a persistent price war.
Excitingly, XPeng’s all-new G6 Ultra Smart Coupe SUV will appear at Auto Shanghai 2023, utilizing the innovative SEPA 2.0
“We envision that this evolutionary intelligent architecture will lead smart EV technology development for the next three years.”
XPeng Chairman and CEO He Xiaopeng
XPeng’s status in China’s EV industry
Market leaders BYD and Tesla continue to dominate the Chinese EV market, with XPeng still far behind in the race. For context, BYD had a 35.5% market share of new energy vehicle sales in March, while Tesla had a 14% share.
In contrast, XPeng reported the delivery of 7,002 EVs in March, down 55% YoY. It also marks the automaker’s seventh straight decline YoY.
Tesla is also on track to develop its next-gen cheaper model, following its numerous price cuts in major markets.
“When you really look at how they can lower costs, it’s really a great way for them to gain market share. And there will be some near-term pressure on profitability, no doubt, but I think the market really understands this.”
Global autos lead equity analyst at RBC Capital Markets
Apart from SEPA 2.0, XPeng has also announced plans to deploy its Advanced Driver Assistance Software (ADAS) to all Chinese cities by 2024.
