President and Vice Chairman of XPeng Motors Brian Gu joins Yahoo Finance Live to discuss the car manufacturer’s innovations in EV development and autonomous driving software in the Chinese market, managing sales prices, and its production outlook.
Video Transcript
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BRIAN SOZZI: We’re watching shares of Chinese EV company, Xpeng, as it gears up for a big slate of innovation in 2022. Despite that, however, shares have been under pressure along with others in the space as DiDi plans to delist from the New York Stock Exchange. Joining us now from the New York Stock Exchange to discuss the state of the company and autonomous space is friend of the program, Brian Gu, President and Vise Chairman of Xpeng Motors. Brian, always nice to see you. Normally, you’re coming to us from overseas. What brings you to New York City?
BRIAN GU: Well, after two years of, I would say, semi-lockdown, I think we finally are able to travel again. I’m so eager to come to the US to see our colleagues, see our friends, our investors. And this is a trip for me to actually meet a lot of my colleagues in person. So I’m very excited to be on the ground here.
BRIAN SOZZI: Brian, we last talked with you around your innovation day. And one thing we didn’t get to, we’d love to get to it now though, your X-Pilot 4.0. What is that and when will it start hitting the market?
BRIAN GU: Well, we unveiled X-Pilot 4.0 at our tech day. That’s a software that will be upgraded by early 2023. This is actually going to be embedded in our fourth product, which is the T9, the premium SUV will we envealed in the Auto Show last month as well.
It will have a brand new architecture with cutting edge computing chips from NVIDIA. It also has probably the most extensive sensor packages on a production vehicle. So our goal is to use X-Pilot 4.0 to enable end-to-end city wide NGP, which means that you can basically turn on the autonomous driving capability and drive around the city for most of the scenarios that you see.
JULIE HYMAN: Brian, certainly that’s not the only electric vehicle that’s being sold in China right now. We just got the Chinese auto sales for November for electric vehicles, 427,000 cars, that’s 19.5% of the total passenger sales, car sales in China, which is incredible to me. So talk to me about the industry there versus what you’re seeing from the industry in the US, where you are in the growth cycle there, and how much, for example, the Chinese government has been instrumental in that growth.
BRIAN GU: Well, this year we certainly saw an explosion of EV penetration. So let’s say a year ago, it’s a roughly 5% penetration. And as a late, figure as you mentioned is close to 19%. So that’s a dramatic increase over the course of probably 15 to 18 months.
And this is not just the carbon policies at work, I think to really move this penetration rate is actually the availability of very good, smart EV products coupled with acceptance, and also the user behaviors that should actually welcome these products.
Because the subsidy in China actually has come down pretty dramatically from two to three years ago. And this has become a very small portion of the sales price. But the product right now is selling very well. And so, it’s due to because product strength.
At the same time, I think also you saw the infrastructure allowing usage of EV is also blossoming in China. The number of charging stations and also the toll roads and also the city roads are also really geared to welcome more and more EV usages. So the combination of these factors really propelled the conversion in penetration rates.
JULIE HYMAN: And I’m also curious, obviously we have seen this global push to address climate change to bring down emissions, and what you’re doing in the electric vehicle industry there is a part of that. How confident are you that– or are you already seeing a decrease in pollution, for example, in China as a result of this shift?
BRIAN GU: I think EV industry is definitely a very key component to decarbonization because we are producing zero emission vehicles. But also, we actually focus on manufacturing processes from starting from the raw material, try to be as green as possible.
So that’s why if you look at in our plant, we are basically utilizing a lot of these recyclable energies and waste treatment techniques to reduce carbon footprint. So one of the things that we’re very proud of is that Xpeng is ranked double A by MSCI in the ESG rating, really reflective of the commitment that we have on this energy front.
BRIAN SOZZI: Brian, I read something recently that Xpeng is rolling out superchargers that will let you charge up your car in about five minutes. Is that right and how many of those will you have in the market next year?
BRIAN GU: Well, this is actually a part of the technology will be in our fourth product, which is the Premium SUV G9, which we’ll be start delivering the second half of next year. It will have the cutting edge powertrain design that enable 480 kilowatt chargers, which actually allows you to charge up to 200 kilometers in about five minutes.
That requires, obviously, we built new charging piles that is enabled by this technology, which coupled with our automobile battery designs. We’re aiming to deliver that experience to our customers by the end of next year.
BRIAN SOZZI: And we mentioned in the intro, Brian, lots of focus in this space on DiDi delisting. From an Xpeng standpoint, do you have plans to do delist from the New York Stock Exchange?
BRIAN GU: Well, we don’t have plans to delist at all. We still enjoin, I would say, very active trading of our shares in the US stock market. But we are closely monitoring, obviously, the development of this proposal by the SEC and how in a few years what exactly will lead to at the end.
But as a company, we are fully prepared for any eventualities. We have successfully completed our Hong Kong two primary listing this summer. So we actually are able to independent trade with or without the New York Stock Exchange listing status.
But what I would say is that most of our shareholders are large institutional investors who actually are able to invest in both stock exchanges. So we don’t think they will be a lot of problems or issues if there’s a chance of listing value.
BRIAN SOZZI: Well, good to see you down there, Brian. Enjoy your trip and time in New York City. Brian Gu, President and Vise Chairman of Xpeng Motors. We’ll talk to you soon.