XPeng's He Xiaopeng Warns of 'More Brutal and Bloody' Auto Market Competition in 2026
XPeng Chairman He Xiaopeng has issued a stark warning about intensifying competition in China's automotive market, predicting 2026 will bring even more cutthroat rivalry as the company launches its aggressive pricing strategy with its first extended-range electric vehicle.
The forecast came as XPeng unveiled its X9 Super Extended-Range version at an unexpectedly low starting price of RMB 309,800 ($43,000), significantly undercutting the RMB 350,000 presale price and market expectations of around RMB 330,000. The move signals XPeng's determination to capture market share through price competition, particularly targeting northern regions and range-anxious consumers.
Despite achieving near-profitability in Q3 2024 with net losses narrowing to RMB 380 million, He acknowledged the uncertain road ahead. "I can only confirm one thing: competition in the auto market in 2026 will be more brutal and bloody," he told reporters, noting challenges ranging from supply chain pressures to geopolitical uncertainties.
The cautious outlook comes as XPeng enters the extended-range vehicle segment at a time when hybrid sales have declined for four consecutive months from July to October, though He expressed confidence that next-generation extended-range technology could reverse the trend.
Aggressive Pricing Shakes Market Expectations
XPeng's pricing strategy for the X9 Super Extended-Range caught the industry off guard. The two variants—Max and Ultra—launched at RMB 309,800 and RMB 329,800 respectively, triggering audible gasps at the unveiling event. The pricing not only undercuts competitors but also makes XPeng's own pure-electric X9, priced at RMB 359,800, appear relatively expensive.
Within one hour of the launch, XPeng announced the vehicle had "broken records" for same-day firm orders compared to previous X9 launches, though specific figures were not disclosed. He called it a successful "first shot" for the company's extended-range lineup.
The company is leveraging technology transfer from its pure-electric platform to achieve cost efficiencies. He explained that pure-electric vehicles require approximately 40 kWh more battery capacity, adding tens of thousands of yuan to costs. By sharing technology across platforms, XPeng aims to maintain aggressive pricing while preserving margins.
Product head Li Yifan indicated that rising sales volumes in 2025 have enabled significant economies of scale, allowing XPeng to avoid passing costs onto consumers. The company's automotive gross margin stood at 13.1% in Q3, though overall gross margin reached 20.1% thanks to software and services revenue.
Targeting Northern Markets with Technical Solutions
A strategic breakthrough emerged in the launch data: over 50% of initial orders came from northern regions, marking the first time XPeng's northern orders exceeded southern ones. For the Guangzhou-based pure-electric vehicle maker, penetrating northern markets represents a crucial expansion opportunity.
The X9 Super Extended-Range offers CLTC combined range of 1,602 km and pure-electric range of 452 km, addressing range anxiety in colder climates. However, its rear-wheel-drive-only configuration initially raised concerns about winter handling on icy roads.
XPeng addressed these concerns with an integrated ice and snow stability system. Demonstration videos showed the vehicle maintaining stability in snow at 0-80 km/h acceleration without slipping, climbing 10% grades on packed snow without loss of traction, and executing stable 60 km/h circles without fishtailing. A dedicated escape mode enables single-wheel recovery from 10 cm deep snow pits.
Li Yifan explained that the system coordinates the standard dual-chamber air suspension, active rear-wheel steering, and torque control systems. In escape mode, ground clearance expands to 185 mm while individual wheels can receive peak torque of 4,700 N·m, capabilities that distinguish it from traditional rear-drive vehicles.
Advanced Safety and Intelligence Features
The X9 Super Extended-Range incorporates comprehensive active safety systems, including extreme blowout control at speeds up to 160 km/h on wet roads and 150 km/h in heavy rain. The automated emergency braking and steering systems support speeds up to 130 km/h, with automatic avoidance of construction zones and stalled vehicles.
The vehicle meets both 2024 C-NCAP and 2026 E-NCAP five-star safety standards, featuring nine airbags including front dual-chamber far-side airbags and a 2.97-meter side curtain. Even the zero-gravity seats include dedicated airbags.
On intelligent driving, the MAX variant uses one self-developed Turing AI chip with 750 TOPS computing power, while the ULTRA version employs three chips delivering 2,250 TOPS. XPeng's second-generation VLA system will roll out to Ultra models in Q1 2026, with Max versions receiving full compatibility throughout the year.
Near-Term Profitability Amid Long-Term Uncertainty
XPeng's Q3 results showed total revenue of RMB 20.38 billion, up 101.8% year-over-year and 11.5% quarter-over-quarter. Net losses narrowed to RMB 380 million, down 78.9% year-over-year and 20.3% sequentially.
He placed Q4 profitability probability at "five nines"—99.999%—moving closer to his earlier prediction of quarterly profit. He compared XPeng's current phase to Amazon's heavy R&D investment period, suggesting the company's comprehensive capabilities will become more apparent in coming years.
Looking ahead, He emphasized that software value will grow from under 10% of vehicle value today to a much larger share, playing to XPeng's strengths. However, he warned of multiple uncertainties including economic conditions, regional factors, and supply chain challenges such as memory chip availability. The question of whether advanced driver assistance systems will reach an "iPhone 4 moment" starting in 2026 adds another variable to an already volatile competitive landscape.