November 18, 2024
BEIJING – Most of the Chinese carmakers today will not survive in the coming decade, and artificial intelligence (AI) technology will be one of the keys to the success of those that remain.
This was a point made by Mr He Xiaopeng, chairman and chief executive of Chinese electric vehicle (EV) manufacturer Xpeng, in an exclusive interview with The Straits Times during his visit to Singapore in October.
“From 300 start-ups, only 100 of them survived. Today, there are fewer than 50 companies that still exist, and only 40 of them are actually selling cars every year,” said Mr He, 47, whose company is headquartered in Guangzhou.
“I personally think that there will only be seven major car companies that will exist in the coming 10 years.”
He did not specify which Chinese automakers these might be.
He added: “AI is one of the core competencies that the large-scale car companies need to survive. They also have to learn from the global brands in terms of product quality and service levels.”
His somewhat grim forecast for Chinese car companies comes at a time when the country’s EV brands are thriving in Singapore. Riding on a surge in demand for EVs, Chinese brands accounted for 52.1 per cent of all EV registrations here in the first 10 months of 2024, compared with 30.3 per cent in 2023.
The number of Chinese car brands in Singapore has also grown – from two in 2018 to nine as at November. Xpeng made its debut here in July.
Industry watchers said motor dealers here have been actively courting Chinese carmakers, with more expected to set up in the city state in 2025.
Since its Singapore launch, Xpeng has registered 212 units.
This puts it ahead of three other Chinese EV brands that made their debut here in 2024 – Zeekr (65 units registered), Chery (48 units) and Seres (one unit). GAC Aion, which launched here in April, has sold 262 units.
In comparison, the top-selling Chinese EV brand, BYD, which has been in Singapore since 2017, is well ahead with 4,560 units registered between January and October.
When asked about Xpeng’s decision to establish a presence in Singapore, Mr He said: “We make medium- to high-end cars. So the market we enter needs to be more advanced and able to afford such vehicles.”
Xpeng, which is in more than 30 countries, has yet to turn a profit.
In the second quarter of 2024, the company reported a net loss of 1.28 billion yuan (S$237.7 million), compared with a net loss of 2.8 billion yuan for the same period in 2023.
Mr He said his company aims to balance profitability with long-term success.
“Now, it involves heavy investment in research and development and brand. This will continue,” he said. “But when the industry stabilises, then profit will be very good.”
In a wide-ranging interview at the brand’s showroom in Leng Kee Road, Mr He also spoke about autonomous vehicles and his company’s ongoing project to build flying cars.
Xpeng uses AI technology to power its autonomous driving system, which was first piloted with some Guangzhou-based cars in 2022. This was expanded to cars from other Chinese cities in the second half of 2023.
It was the first company in China to introduce an advanced driver assistance system that enables the car to tackle urban driving conditions, such as changing lanes to overtake other vehicles, reacting to traffic lights, navigating roundabouts, and avoiding pedestrians and cyclists.
Mr He believes it would be easy to roll out this feature in Singapore because the driving environment is highly regulated and drivers keep to the rules.
“By 2025, the Xpeng driver will have to take over from the assistance system only one to two times per 100km. This makes driving easier and safer,” he said.
The rare times when a driver needs to intervene, Mr He said, will be during instances such as when he or she prefers to park in a spot that differs from what the car has identified.
The system can be set to mimic the motorist’s driving style.
Mr He’s target is for the cars to behave like an experienced human driver in any given situation and be deemed a “good driver”.
There are six levels of driving automation, ranging from Level 0 to 5, as defined by the US-based Society of Automotive Engineers.
Xpeng’s technology is classified as a Level 3, where the vehicle can detect the environment and do most of the driving. Level 5 vehicles can move independently without any human intervention under all conditions.
The Land Transport Authority told ST that, at present, vehicles approved for registration and sale in Singapore have only up to Level 2 automation, but it will evaluate applications for Level 3 automation. Cars with Level 2 automation can steer and accelerate on their own, but the human needs to monitor the controls and can take over at any time.
Singapore is not about to venture into robotaxis yet because of the complexity of dealing with different routes.
Instead, the Government is looking into deploying self-driving minibuses on less technically challenging routes with lower traffic and ridership. Safety drivers will be on board the minibuses in the initial stage before a remote safety operator is allowed to control them from afar.
Self-driving logistics vehicles will also be a focus for Singapore.
Mr He does not see Level 5 automation happening any time soon globally. “If there is a typhoon today and the roads are already flooded, it is difficult even for a human driver to handle the situation. So I think Level 5 is something that is very far away.”
Xpeng is not limiting itself to full EVs. It announced in November that it will launch its first extended-range vehicle, which carries an internal combustion engine and an electric motor, in 2026. The vehicle is expected to have a range of 1,400km before needing a refuel and recharge.
The company is also expected to start delivering its flying car to customers from 2026. This includes an order for 150 units from two Hangzhou-based companies that provide air travel services.
In a sign of the state of affairs for some Chinese EV companies, Neta – which has been exporting its cars to markets such as Malaysia and Thailand – has reportedly halted production at its Zhejiang factory and cut salaries in November. The brand is on track to launch in Singapore by the end of 2024.
In the past year, there have been reports of Chinese EV producers struggling in their domestic market because of stiff competition and price wars. Trade barriers put up by the European Union are also making it difficult for them to expand overseas.