London Daily

Focus on the big picture.
Friday, Aug 22, 2025

Chinese Tesla challenger’s new car costs a third of the price of a Model S

Xpeng’s P7 is now available to pre-order as the company aims to take on Tesla, which Xpeng’s founder called overestimated in China

This article originally appeared on ABACUS

Can’t afford a Tesla and not willing to drive around in the company’s new eccentrically futuristic Cybertruck? Well, China has another option for you at a much cheaper price.

Guangzhou-based Xpeng is one of the country’s EV startups hoping to become the “Chinese Tesla,” and it has just started pre-orders of its newest model, the P7. The sport sedan is selling for prices ranging from 270,000 yuan to 370,000 yuan (US$38,400 to US$52,600).

That makes the P7 nearly a third of the price of a Tesla Model S in China. And it already has more than 15,000 pre-orders, according to Xpeng.

The timing is interesting. Just 10 days earlier, Tesla flaunted its first vehicle made in China -- a more affordable Model 3 priced at 355,800 yuan (US$50,500). Tesla has been building its first Gigafactory outside of the US in Shanghai, where it just recently started producing its first vehicles.

“We believe China could become the biggest market for Model 3,” the company said in its third-quarter earnings report.

But Tesla faces competition from hundreds of EV makers in China, including Tesla wannabes like Tencent-backed NIO and WM Motors. Xpeng has been particularly irksome to Tesla, and not just because the company’s cars bear a striking resemblance to Tesla’s designs.

Xpeng is one of the country’s most prominent EV startups to have sprung up in recent years thanks to Beijing’s push to get more electric cars on the streets. The company’s backers include Alibaba, IDG Capital and smartphone maker Xiaomi. The five-year-old company recently raised US$440 million in funding.

(Abacus is a unit of the South China Morning Post, which is owned by Alibaba.)

The similarities between the two companies gained wider attention when Tesla sued its former employee Guangzhi Cao in March for stealing trade secrets. Tesla claimed Cao passed the stolen information to Xpeng, his new employer. Tesla said Xpeng “transparently imitated Tesla’s design, technology, and even its business model.”

Tesla also pointed out that Xpeng introduced features similar to its own Autopilot, called X-Pilot, and it hired former Tesla engineers who had worked on the driver assistance feature that Tesla “spent hundreds of millions of dollars” developing.

Although Cao admitted he uploaded Tesla’s Autopilot-related source code to his own drive, he denies that the files included trade secrets. Xpeng said it has nothing to do with the incident. Cao maintains he didn’t transfer Autopilot information to Xpeng.

Tesla is currently facing financial pressure, having lost more than US$1 billion in the first half of the year. EqualOcean analyst An Feng said Tesla is unlikely to reduce the price of the Model 3 made in China in the short term. This could open the door for Tesla wannabes like XPeng to capture price-conscious Chinese consumers.

Xpeng founder and CEO He Xiaopeng mused on Weibo in March that most people underestimate Tesla's challenge to traditional cars while also overestimating Tesla's competitiveness in China.

How Weibo became China’s most popular blogging platform

But Xpeng Motors President Brian Gu pointed out in an interview with CNBC that Xpeng and Tesla are not competing in the same price range.

“Xpeng is apparently betting on consumers in the so-called new first-tier cities, while Tesla is trying to meet demand from the country's upper-middle class in the major metropolises,” EqualOcean analyst Ivan Platonov said. While the first group prefers a good deal, urbanites in large cities like Beijing and Shanghai are more likely to go for the brand, he added.

Newsletter

Related Articles

0:00
0:00
Close
Ukraine Declares De Facto War on Hungary and Slovakia with Terror Drone Strikes on Their Gas Lifeline
Animated K-pop Musical ‘KPop Demon Hunters’ Becomes Netflix’s Most-Watched Original Animated Film
New York Appeals Court Voids Nearly $500 Million Civil Fraud Penalty Against Trump While Upholding Fraud Liability
Elon Musk tweeted, “Europe is dying”
Far-Right Activist Convicted of Incitement Changes Gender and Demands: "Send Me to a Women’s Prison" | The Storm in Germany
Hungary Criticizes Ukraine: "Violating Our Sovereignty"
Will this be the first country to return to negative interest rates?
Child-free hotels spark controversy
North Korea is where this 95-year-old wants to die. South Korea won’t let him go. Is this our ally or a human rights enemy?
Hong Kong Launches Regulatory Regime and Trials for HKD-Backed Stablecoins
China rehearses September 3 Victory Day parade as imagery points to ‘loyal wingman’ FH-97 family presence
Trump Called Viktor Orbán: "Why Are You Using the Veto"
Horror in the Skies: Plane Engine Exploded, Passengers Sent Farewell Messages
MSNBC Rebrands as MS NOW Amid Comcast’s Cable Spin-Off
AI in Policing: Draft One Helps Speed Up Reports but Raises Legal and Ethical Concerns
Shame in Norway: Crown Princess’s Son Accused of Four Rapes
Apple Begins Simultaneous iPhone 17 Production in India and China
A Robot to Give Birth: The Chinese Announcement That Shakes the World
Finnish MP Dies by Suicide in Parliament Building
Outrage in the Tennis World After Jannik Sinner’s Withdrawal Storm
William and Kate Are Moving House – and the New Neighbors Were Evicted
Class Action Lawsuit Against Volkswagen: Steering Wheel Switches Cause Accidents
Taylor Swift on the Way to the Super Bowl? All the Clues Stirring Up Fans
Dogfights in the Skies: Airbus on Track to Overtake Boeing and Claim Aviation Supremacy
Tim Cook Promises an AI Revolution at Apple: "One of the Most Significant Technologies of Our Generation"
Apple Expands Social Media Presence in China With RedNote Account Ahead of iPhone 17 Launch
Are AI Data Centres the Infrastructure of the Future or the Next Crisis?
Cambridge Dictionary Adds 'Skibidi,' 'Delulu,' and 'Tradwife' Amid Surge of Online Slang
Bill Barr Testifies No Evidence Implicated Trump in Epstein Case; DOJ Set to Release Records
Zelenskyy Returns to White House Flanked by European Allies as Trump Pressures Land-Swap Deal with Putin
The CEO Who Replaced 80% of Employees for the AI Revolution: "I Would Do It Again"
Emails Worth Billions: How Airlines Generate Huge Profits
Character.ai Bets on Future of AI Companionship
China Ramps Up Tax Crackdown on Overseas Investments
Japanese Office Furniture Maker Expands into Bomb Shelter Market
Intel Shares Surge on Possible U.S. Government Investment
Hurricane Erin Threatens U.S. East Coast with Dangerous Surf
EU Blocks Trade Statement Over Digital Rule Dispute
EU Sends Record Aid as Spain Battles Wildfires
JPMorgan Plans New Canary Wharf Tower
Zelenskyy and his allies say they will press Trump on security guarantees
Beijing is moving into gold and other assets, diversifying away from the dollar
Escalating Clashes in Serbia as Anti-Government Protests Spread Nationwide
The Drought in Britain and the Strange Request from the Government to Delete Old Emails
Category 5 Hurricane in the Caribbean: 'Catastrophic Storm' with Winds of 255 km/h
"No, Thanks": The Mathematical Genius Who Turned Down 1.5 Billion Dollars from Zuckerberg
The surprising hero, the ugly incident, and the criticism despite victory: "Liverpool’s defense exposed in full"
Digital Humans Move Beyond Sci-Fi: From Virtual DJs to AI Customer Agents
YouTube will start using AI to guess your age. If it’s wrong, you’ll have to prove it
×