<img src="https://imageproxy.pbkrs.com/https://wpimg-wscn.awtmt.com/edeff9f1-4d74-485d-8c45-a88b07bee65f.png?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" alt="" original-src="https://imageproxy.pbkrs.com/https://wpimg-wscn.awtmt.com/edeff9f1-4d74-485d-8c45-a88b07bee65f.png"/>Author | Chai XuchenEditor | Zhou ZhiyuSince the beginning of this year, there have been voices in the market saying &#34;Xiaopeng seems to be falling behind&#34;, but He Xiaopeng is not giving up, believing that this is the accumulation of strength before making a big move.On April 25th, Xiaopeng's full range of models made their debut at the 2024 Beijing International Auto Show. Although they are all models currently on sale, Xiaopeng promoted the slogan &#34;AI defines cars&#34;, claiming to activate their product power for the second time and allow Xiaopeng owners to &#34;upgrade to a new car&#34; for free.In He Xiaopeng's view, there will be a qualitative change in autonomous driving in 2025, &#34;even earlier than expected, because the technology is faster than I imagined.&#34; Xiaopeng intends to seize this opportunity and make a breakthrough.At the auto show, Xiaopeng first introduced its &#34;Tianji System&#34;, an AI system that connects intelligent driving and intelligent cabin, including an AI voice assistant and over a hundred cabin functions. This is also the first shot Xiaopeng has taken after going all in on artificial intelligence.Next, XNGP intelligent driving supported by the &#34;end-to-end&#34; large model will be the highlight of Xiaopeng's AI revolution.In a post-event interview, He Xiaopeng told Wall Street News that previously, intelligent driving required a large amount of code to establish rules. Even with ten thousand lines of code, only 50% of the rule capabilities could be achieved. With the advent of the &#34;end-to-end&#34; era of AI, vehicles' intelligent driving now has the ability to think independently, requiring only tens of billions in training costs to significantly improve product performance within a year.Xiaopeng, who has always been portrayed as a &#34;tech geek&#34;, is eager to ride this wave of AI, which is not surprising.Currently, with the promotion of leading giants such as Huawei and Tesla, the rapid popularization of intelligence, and intelligent driving solution providers such as DJI and Yuanrongqixing focusing on models priced at 200,000 yuan or even below 100,000 yuan, the intelligent driving sector is flourishing.He Xiaopeng is confident that AI has the ability to once again revolutionize smart cars, which is his next big move to turn the tables. Therefore, he will recruit another 4,000 new employees this year to aggressively pursue this track, and the organization will undergo a comprehensive transformation for this purpose.In addition to refining AI technology, Xiaopeng also plans to accelerate the speed of new product launches. This year, Xiaopeng will &#34;downgrade&#34; AI capabilities to the 200,000 yuan A-class model &#34;MONA&#34;, which will bear the responsibility of high sales volume.Apart from product layout, Xiaopeng will also increase its strategic efforts overseas. Leveraging the advantages of cooperation with Volkswagen, the international market coverage will expand from the current 3 countries or regions to more than 20. He Xiaopeng emphasizes that future domestic and international revenues should achieve a &#34;50-50 split&#34;.He Xiaopeng, who has placed his bets on AI and overseas markets for a turnaround, firmly believes that Xiaopeng Motors' positive cycle will begin in the fourth quarter of this year.The following is a transcript of the conversation with He Xiaopeng (as edited):Question: In the past quarter, XPeng's sales were relatively poor. When can it return to monthly sales exceeding 20,000 units, and when can the gross profit margin return to double digits?He Xiaopeng: In fact, there have been significant changes in the past year. Previously, the focus was on being the largest in scale. Later, the logic shifted to surviving the elimination rounds, aiming to be the first in scale under the logic of the &#34;Polygon Warrior&#34;, leading in scale.My view on survival rounds is different from many others. I don't believe that selling two to three thousand units more in a month and moving up several ranks in the rankings can ensure survival. I believe in excelling in multiple aspects to succeed in the automotive industry.This year, XPeng aims to achieve year-on-year growth of tens of percent, strengthen operations several times over, and truly link AI capabilities with customer service experience. These are the technological core areas that will propel XPeng to soar. I believe that after the arrival of the new AI era, our transformation will be the most successful.Question: The industry competition is fierce. How do you view the second half of automotive intelligence development, and what measures will you take?He Xiaopeng: Firstly, we will increase investment in the AI field. Our goal this year is to add 4,000 relevant personnel, mainly focusing on the integration of AI and automotive technology. Secondly, we plan to expand the application of AI from A-level cars to B-level cars. Currently, XPeng mainly focuses on the B-C level car market. Thirdly, we are undergoing organizational changes, aiming to build a company structure similar to a tree crown, with over a dozen product lines, and planning to launch them in the coming years.Many people think that XPeng's changes are too drastic. In fact, people have a vague understanding of the cruelty of the elimination rounds. For example, if the annual sales volume of a certain car drops to 25%-30%, its products will also undergo transformation. Therefore, we need to adapt earlier.My overseas goal is a long-term one, not to sell a lot of products in a short time. XPeng insists on developing autonomous driving. Ten years ago, no one believed in it. We also persist in developing flying cars, which no one believed in ten years ago. However, next year, many people will start to believe in autonomous driving, and in 3-4 years, flying cars will also be truly used by people.Therefore, we need technological foresight to foresee the future, patience to wait for that day, and the ability to perform well. All three aspects need to be done well, and we look forward to achieving unity of knowledge and action in China and even globally.Question: The price wars in the past two years have been particularly intense. When will this round of price wars end? What is the current logic behind price reductions?He Xiaopeng: Regarding price wars, I believe there are two core logics. Firstly, profit is the decisive factor. As long as the profits of traditional fuel vehicles remain at a reasonable level, they will not easily reduce prices. Secondly, with the continuous development and popularization of intelligent automotive technology, the prices of smart cars and traditional fuel vehicles will converge in the future. When the prices of smart cars are equivalent to traditional fuel vehicles and the latter's profits are reasonable, the entire industry will undergo significant changes.As smart cars provide a disruptive user experience, their market penetration rate is expected to increase significantly from the current 50% to 90%, driving rapid industry evolution. In addition, while the industry used to rely mainly on hardware, it now emphasizes the combination of hardware and AI technology. Large-scale model technology has helped many brands, including XPeng, make great progress in the field of autonomous driving. This technology is no longer an unreachable dream but a practical achievement that has been implementedWe expect that by 2027, the number of car companies in the market will significantly decrease. At that time, we will see more advanced AI, better hardware devices, and higher-quality products, leading the entire industry into a stable phase. Over the past year, XPeng has undergone a lot of changes and is expected to experience a huge leap in development in the fourth quarter of this year.Question: It was just mentioned that XPeng's technological progress in end-to-end aspects is very cutting-edge. What is the national coverage for the nodes that can be driven?He Xiaopeng: XPeng has been working on this since last year, and it has now started public testing. The plan is to officially release the end-to-end solution to the public next month. The core of this solution lies in successfully running the model and implementing some functions. Our goal is that by the end of this year, driving will be possible in most regions and even within small communities.Currently, many companies claim that they can provide services nationwide, but in reality, they still rely on high-precision maps. It may seem fast, but high-precision maps currently cover less than 1% of national roads. When a vehicle travels from road A to road B without the support of high-precision maps, the service will immediately be interrupted. Only by completely eliminating the reliance on high-precision maps can it be applied in complex scenarios.In 2025, there will be a qualitative change in autonomous driving. It seems that this change may even happen a year earlier than expected because the technology is advancing faster than I imagined. With the emergence of end-to-end technology, we only need to invest billions in training costs to significantly improve product performance within a year, which will greatly accelerate the popularization of autonomous driving technology in practical applications.Question: It was mentioned earlier that MONA will take the next step in June and its name includes AI. What actions will be taken for the future intelligence of this car?He Xiaopeng: We have always wanted to create an A-class car, which will be the size and price of an A-class car, while also having excellent performance, appearance, and AI capabilities.As I mentioned before, no one has been able to achieve full-domain autonomous driving like XPeng with an A-class car. I believe that after 4-5 years of research and development, MONA will bring a completely different new brand experience to everyone.As a completely new brand, MONA will have multiple models. The first model is very cool, suitable for young graduates, and has a high level of intelligence.Question: Could you introduce the situation of XPeng's overseas expansion?He Xiaopeng: We are a mid-to-high-end brand overseas and are not inclined to take the cost-effective route. I hope that XPeng's image overseas will still be that of a technology company, bringing intelligence and ultra-fast charging technology to the past.In the past few years, XPeng has launched a limited number of models in the Chinese market, with one model per year, and even fewer in the overseas market. Starting from the second half of this year, we will accelerate the pace of model launches and plan to introduce some models to overseas markets. The export range will expand from the original 3 countries to over 20.I believe that for any Chinese car company to do well overseas, it must establish a strong brand. I hope that half of XPeng's future revenue will come from the global market and the other half from China.Question: After Xiaomi's car went public and caused a lot of discussion, has XPeng exchanged and learned about marketing content with Mr. Lei?Xiaopeng He: We have had a lot of communication, but some abilities are innate and not easy to learn. I think Mr. Lei's marketing abilities are better than mine, but I aim to surpass him in technical capabilities. Each company needs to find its own roots and genes. We are also significantly improving our marketing capabilities, with very noticeable results in the past two months, but it's still not enough.Q: What is the most important thing for XPeng Motors this year? Besides technology and products, what achievements does XPeng Motors need to accomplish?Xiaopeng He: Internally, we need to excel in five areas: the first is the organizational aspect, including people and management; the second is the entire product line, including users, customers, commercial products, and how to effectively market the products, which are the two most crucial aspects. The other three capabilities are how to manage operations effectively, how to enhance customer experience, and how to develop a global mindset.I believe excelling in these five areas is crucial for XPeng to outperform in the elimination rounds. All our organizational and capability transformations are aimed at making the company achieve and excel in globalization

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XPeng sounds the charge