Tech Roundup: XPeng’s Autonomous Cars to Hit China’s Roads by 2025, Chinese EV-Makers Taking Longer to Pay Bills

The Daily Tech Roundup covers significant updates in the technology sector across Asia, particularly in China, with a focus on recent developments in the electric vehicle (EV) industry, artificial intelligence (AI) competition, and market stress in the EV market. [para. 1]

XPeng Inc., a Chinese electric-vehicle maker, has launched XOS 5.1.0, Tianji, an AI-powered in-car operating system that marks the first mass-produced system integrating large model technology in China. The system is designed to facilitate full autonomous driving in China by 2025, achieving L4-level autonomy, which is a high level of self-driving capability. XPeng will gradually apply this system to all its vehicles and enhance it via over-the-air updates. CEO He Xiaopeng reiterated the global testing of XPeng’s smart driving capabilities during an event in Beijing [para. 2][para. 3]. [para. 2][para. 3][para. 4]

In the AI market, Alibaba Group Holding Ltd. has significantly reduced prices for its AI services by up to 97%, prompting an immediate response from Baidu Inc., which announced free services based on its Ernie AI models. This aggressive pricing strategy suggests the commencement of a price war in the burgeoning Chinese AI market, driven by significant investments from tech giants like ByteDance and Tencent Holdings Ltd. Baidu and ByteDance followed Alibaba's lead, emphasizing the fierce competition to acquire a substantial user base crucial for accelerating AI development [para. 5][para. 6]. [para. 5][para. 6][para. 7]

The Chinese EV market is exhibiting signs of stress as the time taken by some automakers to pay their suppliers lengthens. For instance, Nio Inc. took about 295 days to clear its payments at the end of 2023, up from 197 days in 2021, while XPeng Inc. took 221 days, compared to 179 days previously. Tesla Inc., in contrast, maintained relatively steady payment periods over the same timeframe, averaging around 101 days. The increasing payment delays reflect the financial strain on manufacturers stemming from sluggish economic growth and waning consumer confidence, leading to decreased demand for EVs and heightened market competition [para. 8][para. 9]. [para. 8][para. 9][para. 10]

After Beijing phased out national subsidies for EV purchases in 2022, smaller manufacturers have struggled, with some verging on insolvency. WM Motors filed for restructuring, and Human Horizons Group Inc., the owner of HiPhi, halted operations for six months. These instances indicate the intense challenges faced by lesser-established players as they navigate the competitive and economically constrained Chinese EV landscape [para. 11]. [para. 11]

Stellantis NV, an automotive group based in the Netherlands, announced plans to extend its EV offerings to South America, particularly in Brazil, following a partnership with Zhejiang Leapmotor Technologies Ltd. Stellantis aims to scale up its Betim engine factory in Brazil from a current capacity of 750,000 engines to around 1.1 million annually, supplemented by an initial investment of 454 million reais ($88.9 million) this year. This initiative is part of a broader 32 billion reais investment plan for 2025-2030, allocating another 14 billion reais for infrastructure expansion [para. 12][para. 13]. [para. 12][para. 13]