(Yicai) April 7 -- Manufacturing cheap, low-profit autos is not worthwhile, according to He Xiaopeng, chief executive officer of Chinese electric vehicle startup.

“Xpeng wants to engage in healthy competition, rather than simply making cheap cars,” He recently told media outlets, including Yicai. “We won’t touch cars priced below CNY100,000 (USD14,540).”

Based on that principle, all of Xpeng’s EV models must be smart and differentiated, with all product technologies revolving around fundamental intelligent differentiation, He noted.

Xpeng will transform from being a carmaker to a technology firm, He explained. As a result, the Guangzhou-based company changed its Chinese name to Xpeng Group from Xpeng Motors on April 1. This signals a bigger shift toward physical artificial intelligence, according to President Brian Gu.

“Twelve years, a full cycle, and a brand-new starting point,” He said in a post on X on April 2. “From our journey in smart EVs to flying cars, the Vision-Language-Action autonomous-driving model, the humanoid robot Iron, robotaxi, and more, we are on a global expedition in physical AI, turning our dreams into reality step by step.”

Five big domestic automakers will dominate the Chinese market for passenger cars by 2030, He predicted, with other players likely remaining much smaller in scale. He added that several EV startups will exist for much longer than many people expect.

The market backdrop remains difficult. Chinese carmakers logged an almost 1 percent year-on-year decline in revenue to CNY1.48 trillion (USD215.1 billion) in the first two months of this year, as costs inched up 0.2 percent to CNY1.31 trillion, according to the latest data from the China Passenger Car Association.

Their combined profit shrank 30 percent to CNY43.5 billion (USD6.3 billion), with a profit margin of 2.9 percent, lower than the 5.8 percent average among downstream firms, the CPCA’s figures also showed.

Editor: Futura Costaglione