In recent developments within China's electric vehicle (EV) sector, Xpeng Motors has emerged as a standout performer despite the challenging environmentAs various automakers revealed their January sales figures, Xpeng posted a remarkable total of 30,350 new vehicle deliveries, marking a staggering year-on-year increase of nearly 269%. This leap has positioned Xpeng back at the forefront of the new electric vehicle manufacturers, overtaking rival Li Auto in the process.

For comparison, Li Auto managed deliveries of 29,927 vehicles during the same period, which translates to a decline of almost 4% compared to the previous year, alongside a significant 49% drop from DecemberOther competitors also showcased their performance, with Leap Motor delivering 25,170 vehicles, marking an impressive 105% increase year-on-yearMeanwhile, the Xiaomi SU7 surpassed the 20,000 mark in new deliveries, and Seres recorded sales of 17,906 units.

Despite these optimistic figures, the overall automotive market in China reflects a downward trend

Advertisements

Although Xpeng has demonstrated robust performance over the last three months—registering over 30,000 deliveries—there was still an approximate 17% decline compared to the previous monthAnalysts suggest that the surge in December sales might have overstressed the inventory, compounded by the typical slowdown of January due to the Lunar New Year holiday, leading to a less than promising start for the new year.

Market sentiment regarding Xpeng, however, remains cautiously optimisticOn February 4, its stock value surged by 12.4% in Hong Kong, resulting in a market capitalization that surpassed 124.86 billion HKD, outpacing NIO’s 72.90 billion and inching close to Li Auto’s valuation of 199.89 billion HKD.

Xpeng's impressive comeback wasn’t easy, especially after a tumultuous ending to 2022. Issues such as erratic pricing strategies and disappointments in delivery figures led to a drastic fall in its stock price

Advertisements

At one point, its share price plummeted by 85% from its peak, reducing its valuation below 50 billion HKDAdd to this the significant reduction in shareholding by major stakeholder Alibaba, and the situation appeared grim for the new automotive player.

Under these critical circumstances, the arrival of Wang Fengying marked a pivotal change for XpengHer presence not only helped to clarify the muddled brand positioning but also established a well-defined pricing structure for its productsThe successful launches of models like the MONA M03 and the P7+ revitalized Xpeng's prospects and restored its competitive edge in the marketHowever, success in sales volume alone is insufficient; achieving steady profit margins remains the ultimate goal in the fiercely competitive EV landscape.

Wang Fengying, often referred to as a “fire-fighting captain,” was persuaded to join Xpeng by founder He Xiaopeng in December 2022. After three test drives, she accepted that Xpeng's smart vehicles could offer a comfortable urban driving experience and recognized the potential for autonomous driving as a significant marketing angle.

Once aboard, Wang quickly ignited her campaign at Xpeng, initiating measures to eliminate inefficiencies and streamline budgets

Advertisements

Her hands-on approach included directly adjusting marketing release schedules, allowing her to establish more effective strategies for sales and distribution.

As 2023 rolled in, the sales figures did not improve as rapidly as expectedInsiders indicated that while there had been restructuring within Xpeng’s sales framework, many expected more substantial market impact after nearly a year of her leadership.

The continuous sales drop coupled with significant shareholder sell-offs cast a shadow over the company’s aspirations, culminating in a staggering loss of 10.376 billion RMB for the yearSuch performance raised questions about Wang's leadership effectiveness in salvaging the brand.

Nevertheless, He Xiaopeng retained faith in Wang's vision and strategiesInitially focusing solely on sales, Wang's responsibilities expanded post-May 2023 to include product planning and the balancing of production, supply, and sales operations

This trust in her capabilities was soon validated by positive outcomes.

Wang is renowned for her focus-driven management styleA few months into her tenure, she began addressing senior management at Xpeng, emphasizing the importance of perception and branding around intelligent driving capabilitiesHer pursuit of a top industry position became a central theme in her approach.

Continuing her focus on technology and intelligence in vehicles, Wang pushed for every aspect of marketing to center around smart featuresShe introduced a more meticulous policy regarding advertising expenditures, choosing to personally review marketing budgets and scrutinize any request that didn't align with their refined vision.

By August 2024, Wang’s efforts appeared to bear fruit, evidenced by the remarkable launch of the MONA M03. Within 52 minutes of its release, orders surpassed 10,000, escalating to 30,000 within just 48 hours—a clear testament to the model’s appeal and market readiness.

Celebrating this impressive performance, Wang made a rare public appearance at the MONA M03 success party

alefox

In a moment that went viral online, she raised a glass and candidly admitted it was her first drink in celebration of a well-deserved achievement.

The momentum continued with the subsequent release of the P7+, where orders quickly surged past 31,528 within three hours, setting a new record for Xpeng salesFor three consecutive months, the company reported deliveries exceeding 30,000, showcasing a remarkable reversal from previous trends.

This revival in Xpeng's fortunes allowed it to momentarily escape the grips of its prior troublesThe stock prices reflected this recovery, significantly exceeding those of NIO and closing in on Li Auto, who had already entered a more stable profitability phaseDespite this relative improvement, the competition within the EV market remains fierce, with BYD and Tesla continuing to dominate.

Analysts argue that the lack of a decisive edge in the EV sector beyond these established players keeps the competition heated

Xpeng’s present predicament exemplifies this challengeBuilding a distinct moat and sustainable competitive advantages over other automakers involves prioritizing profitability above all else.

Achieving stable profits will position Xpeng favorably to withstand the intense and rapidly evolving challenges within the electric vehicle arena, allowing it to conserve resources for future growth initiatives.

However, financial reports indicate that Xpeng's business dealings were not entirely encouragingAs of the third quarter of 2024, a cumulative net loss of 4.46 billion RMB raised serious concerns about the company's liquidity and cash reserves.

Operating cash flow in the first half of 2024 was characterized by a negative balance of 7.392 billion RMBExcluding the 2.296 billion RMB technical fee received from Volkswagen, this figure swelled to negative 9.688 billion RMB

By September 30, 2024, Xpeng’s cash and equivalents had plummeted to 10.661 billion RMB, reflecting a 35.93% decline.

Nevertheless, the ongoing sales successes of the MONA M03 and P7+ substantially reinforce Xpeng's cash flow, earning the confidence of the marketIn 2025, stock prices attributed to Xpeng surged over 40%, outpacing both NIO and Li Auto significantly.

However, this recent upturn does not guarantee a safe harborLi Auto's struggles with the MEGA model resulted in steep consequences, even as it reported profitsIn comparison, profitability dwindled by 1.537 billion RMB year-on-year, affecting investor confidence and sending stock prices tumbling—down 36.13% in 2024. NIO fared even worse, seeing a drop of 52.72%, while Xpeng experienced a comparatively small decline of 18.99%. This illustrates how fleeting sales spikes do not ensure long-term stability; achieving steady profits must remain the primary focus of any successful enterprise.

Looking ahead, various reports indicate that China's electric vehicle sales are expected to reach 12.85 million units in 2024, with an electrification penetration rate around 40.9%. This trend should gain momentum, with government-supported initiatives such as trade-in programs and tax incentives projected to maintain demand growth throughout the market