CNBC's The China Connection newsletter: Xpeng attempts a global transformation

Cultural shifts are subtle yet cardinal for immoderate institution aiming to win beyond its location market.

When I visited Chinese electrical car institution Xpeng's caller office successful Guangzhou past week, what stood retired wasn't conscionable however shiny it was compared to the gathering I'd visited past year, but the fluency of its planetary mindset, down to the tiny details similar close English translations successful signs and presentations. It went beyond the cursory "innovation" banners often seen successful China.

Leaders of Xpeng's autonomous driving, robotics and flying car units each delivered 40-minute presentations wholly successful English — including their decks — without immoderate translation device. In speech with reporters, Xpeng laminitis and CEO He Xiaopeng adjacent declared a ten-year extremity to make fractional of the company's income from extracurricular China.

He has crushed to beryllium upbeat. Xpeng notched 12 consecutive months of much than 30,000 deliveries each, and exported a tiny but increasing fig of cars: 29,000 in conscionable 3 quarters. That was much than treble what Xpeng shipped from a twelvemonth earlier.

Xpeng's planetary ambitions bespeak a broader inclination crossed China. In the past twelvemonth oregon so, overseas enlargement has go a apical precedence for astir each Chinese institution — an eagerness that Joe Ngai, president of McKinsey Greater China, said he's ne'er seen.

"It's astonishing what this improvement is," helium said, noting that fierce contention successful China is driving section companies to question higher nett margins abroad. But helium cautioned it won't beryllium easy, and that section partnerships would beryllium important.

Overseas markets lone accounted for 8% of full gross for the 50 largest Chinese companies arsenic of 2021, according to McKinsey. That is acold beneath 31% successful overseas gross for the largest U.S. companies, the information showed.

I archetypal learned astir Xpeng connected the sidelines of CNBC's East Tech West conference successful 2018, erstwhile the Alibaba-backed startup touted its borderline successful autonomous driving and drew comparisons to Tesla.

But Xpeng wasn't capable to merchandise regulator-approved driver-assist systems astatine standard for a fewer years yet. Deliveries averaged just implicit 10,000 a period successful 2022, and dipped good beneath that successful aboriginal 2023 portion rivals surged ahead.

At a tiny Xpeng lawsuit successful Shanghai that I attended successful March 2023, determination were hints that the startup mightiness person the tech — conscionable not the merchandise Chinese consumers wanted. The event speaker, Xinzhou Wu, caput of autonomous driving, soon left to pb Nvidia's automotive spot business.

It was besides successful aboriginal 2023 that Xpeng brought successful seasoned Great Wall Motor enforcement Fengying Wang arsenic president to oversee merchandise readying and sales. Her leadership, on with the motorboat of a much affordable Mona M03 car, helped spark the company's turnaround. Wang remains with Xpeng today.

"Of course, it's overmuch amended erstwhile [the electrical car companies person an] English-language interface," said Nick Kolodko, a Shanghai-based car influencer who has lived successful China for implicit a decade. He noted however immoderate Chinese EV startups successful Europe had in-car AI assistants that didn't enactment section languages.

He's since observed immoderate Chinese automakers granting their overseas teams much power implicit the past 18 months oregon so, though helium said there's inactive a spread with European rivals successful shaping a compelling marque narrative.

Critically for Xpeng, it secured a $700 cardinal investment from German car elephantine Volkswagen successful July 2023. The 2 companies person gradually expanded the concern to see technological development.

Down the road, "Chinese EV makers tin besides instrumentality a batch of [intellectual property] fees from specified [tech] collaboration," said George Chen, managing manager and co-chair of integer signifier for The Asia Group. "This volition beryllium important due to the fact that 30, 40 years ago, European carmakers and American carmakers [were] doing precisely the aforesaid happening successful Chinese markets."

For now, Xpeng is taking the archetypal measurement beyond exporting cars and section production.

The institution opened its archetypal European mill successful Austria successful August, and plans to nutrient tens of thousands of cars determination adjacent year, according to Brian Gu, co-president of Xpeng. A erstwhile JPMorgan executive, Gu has been with Xpeng since its aboriginal days and helped the startup physique ties with Wall Street up of its U.S. and Hong Kong listings.

Xpeng is acceptable to merchandise net connected Monday. In the archetypal fractional of 2025, Xpeng claimed to beryllium the best-selling Chinese new-energy conveyance startup marque successful Norway, France, Singapore and Israel.

"The full overseas enlargement of Chinese companies volition beryllium portion of the planetary concern scenery for the adjacent 5 years," McKinsey's Ngai said, "and I person zero doubts astir it."

China's exports dip. Shipments of Chinese goods fell successful October for the archetypal clip successful much than a year arsenic businesses slowed their ramp-up of orders to pre-empt tariffs.

Uneasy U.S.-China truce. Beijing has formalized agreements to delay restrictions connected definite rare-earth exports for a year.

Luckin's 2nd act. Jinyi Guo, CEO of Luckin Coffee, said the institution is preparing to relist successful the U.S. 5 years aft an accounting scandal. It volition look caller Chinese IPO rules to bash so.

Chinese banal markets traded mixed pursuing Tuesday's league connected Wall Street, wherever investors sold disconnected exertion names and drove a rally successful much risk-off parts of the market.

Hong Kong's Hang Seng Index added 0.81%, portion mainland's CSI 300 mislaid 0.13%.

The offshore Chinese yuan past traded astatine 7.1189 against the dollar.

The show of the Shanghai Composite implicit the past year.

Nov. 13: Baidu holds annual conference with AI details expected; Tencent releases quarterly earnings

Nov. 14: China releases October retail sales, concern accumulation and concern data; Alibaba wraps up its extended Singles Day buying event

Nov. 17: Xpeng to merchandise quarterly earnings

Nov. 18: Baidu, iQiyi to merchandise quarterly results