By ZHOU Shuqi
EV maker XPeng is not going to make its own batteries. In an email to Jiemian News, the company said it is “adamantly” focused on cars. Its priority is to cut costs and improve efficiency.
Tech news outlet 36kr recently reported that XPeng hired former BMW battery engineer ZHONG Liang more than six months ago to run its battery business. XPeng responded that Zhong has been with the company for a long time and that his job is to liaise with battery suppliers.
XPeng however, registered a wholly-owned subsidiary on November 16 under the name Guangzhou Pengbo listing battery manufacturing among its main business areas. XPeng founder XIA Heng is the legal representative.
An internal source blew a smokescreen around the news. “It’s just another subsidiary but doesn’t mean XPeng is starting a new business,” he said.
XPeng buys batteries from CATL and Zhaoqing Xiaopeng Automobile. Zhaoqing is home to one of XPeng’s factories. Guangzhou Zhipeng is also listed as a battery supplier.
Batteries now account for around 40 percent of EV costs and many companies are opting to make their own batteries, or at least trying to, in order to get costs down. SVOLT, once the battery unit of Great Wall Motors, is now among the world’s top 10 batteries. It filed for an IPO recently aiming to raise 15 billion yuan (US$2 billion). GAC Group, a state-owned car company, has pledged over 10 billion yuan to battery making.
Nio formed a battery force of 400 people earlier this year. If everything goes as planned, a new model scheduled for 2024 will be powered by its own batteries. Meanwhile, Nio’s R&D expenses exceeded 2.9 billion yuan in Q3 and are expected to remain at this level for the foreseeable future.
For XPeng, the battery decision is probably quite an easy one since it has more urgent troubles to worry about. Deliveries have been in free fall for three months, and are now around half last year’s level. Its shares have fallen by 90 percent this year, wiping out HK$320 billion of market value.
