China EV maker Xpeng to launch a Tesla Model Y competitor in 2023

A new Xpeng P7 car is displayed in the Xpeng Motors flagship store in a shopping center. Xpeng P7 is one of the two popular models of Xpeng motors.

Zhang Peng | Light Rocket | Getty Images

Chinese electric car maker Xpeng teased details about two new vehicles it plans to release next year, with one positioned to be a competitor to Tesla’s Model Y.

Currently, the company has four vehicles for sale: the flagship P7 sedan, a lower-cost P5 sedan, the G3 SUV and a larger G9 SUV that will be delivered to customers in October.

Xpeng has been aggressive in vehicle launches as it seeks to gain market share in China’s burgeoning electric vehicle market and challenge leaders such as Tesla and Warren Buffett-backed BYD.

While the company hasn’t released names or many details about the two new models slated for 2023, Xpeng president Brian Gu has provided some snippets of information.

One of the vehicles will be a so-called B-class vehicle and the other a C-class vehicle. The classes refer to the size of the vehicle. For context, the company’s P7 sedan is a B-class car, while the G9 SUV is a C-class vehicle.

Gu said the B-class vehicle will be launched in the first half of next year and will “actually target” [an] even larger market segment” than the P7 sedan. He said the car could be considered a “strong competitor” to Tesla’s Model Y mid-sized SUV.

The C-class product will be released in the second half of 2023, Gu added.

“Given the premium and wide-format positioning, the number may be limited in terms of contribution,” Gu said of the C-Class model. “But again, it will still focus on a brand new segment that we haven’t covered before,” he added.

Gu also said the new models will not be sedans. He did not comment on the type of vehicle it would be.

The executive said the B-class model will be “different” from the upcoming G9 in terms of size and price.

“So there is minimal cannibalization of our model positioning and setup,” Gu said.

Tesla’s Model Y is consistently one of the best-selling electric vehicles in China. But competition in the world’s largest electric car market is mounting with Xpeng and rivals Nio and Li Auto trying to challenge the US giant.

Details on Xpeng’s new cars came after the company reported a larger-than-expected loss in the second quarter of the year, and weak delivery expectations for the third quarter caused inventory to collapse.

Gu said that with the launch of the G9 and its new cars next year, the company will enter a “growth cycle”.

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