China’s Xpeng aims to cut costs with new vehicle manufacturing platform

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The Intelligent Electric Platform Architecture (SEPA) 2.0 will help Xpeng reduce the costs of powertrain systems including batteries by 25% and those of the intelligent drive system by 50% by the end of 2024, Brian Gu, Xpeng’s president, told reporters in Shanghai on Sunday. .

He said that this reduction in costs gives Xpeng an advantage against its rivals in an increasingly competitive market.

“Since the beginning of this year…, a number of players have been launching aggressive price cuts,” Gu said.

“The focus on the ability to offer attractive products at reasonable prices becomes even more important.”

Xpeng will build its G6 SUV, which will debut at the Shanghai auto show starting Tuesday, as the first model to be built on SEPA 2.0, according to the company.

The architecture includes integrated front and rear aluminum die casting technologies and battery packs that integrate into the car body, which will improve manufacturing efficiency and reduce weight of vehicles, added the company.

Xpeng’s rival Tesla uses massive casting machines, also known as gigapresses, to make large, unique pieces of vehicle underbodies. Since 2020 it has been manufacturing its Model Y with a single rear casting part and in 2022 it started using a front casting part in its Texas plant.

In January, Tesla cut prices globally including in China to spur demand while CEO Elon Musk said in March that demand at scale was limited by affordability.

More than 40 car brands in China have followed Tesla and joined what analysts have called a price war, slashing the prices of their best-selling models to defend market share. .

Xpeng CEO He Xiaopeng also said on Sunday that a carmaker needs to achieve annual sales of 3 million units globally to have a chance to survive beyond ten years.

Xpeng’s car sales fell nearly 50% in the first quarter of the year, underperforming the overall EV segment in China.

(Reporting by Zhang Yan and Brenda Goh; Editing by Emelia Sithole-Matarise)

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