Xpeng's Ceo Says The Auto Industry Will Enter An 'elimination Round' From 2025 To 2027

"Competition in 2025 will be fiercer than ever," Xpeng CEO He Xiaopeng wrote in an internal letter obtained by The Wall Street Journal.

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• Xpeng CEO He Xiaopeng said that competition within the auto sector will be even more heated in 2025.
• He said in an internal letter that the industry will face an "elimination round" from 2025 to 2027.
• The Xpeng founder-CEO said in November that most Chinese carmakers wouldn't survive the next decade.

Competition within the auto industry will become even more cutthroat in the years ahead, Xpeng CEO He Xiaopeng said in a letter to his company's staff last month.

"The period from 2025 to 2027 marks the elimination round in the automotive industry," He wrote in an internal letter obtained by The Wall Street Journal.

"Competition in 2025 will be fiercer than ever," He added.

In 2024, Xpeng delivered 190,068 vehicles, a 34% increase from the 141,601 vehicles delivered in 2023, per a company filing. The company's vice-chairman and president, Brian Gu, said in March that Xpeng is on track to "achieve profitability at some point in 2025."

Tesla, the world's largest EV maker, delivered 1.79 million vehicles in 2024, a 1% decrease from the 1.81 million vehicles delivered in 2023.

Xpeng did not respond to a request for comment from Business Insider.

He made similar statements on the auto industry's outlook last year. In November, the Xpeng founder-CEO said in an interview with Singaporean newspaper The Straits Times that most Chinese carmakers won't survive past the next decade.

"From 300 start-ups, only 100 of them survived. Today, there are fewer than 50 companies that still exist, and only 40 of them are actually selling cars every year," He told the outlet.

"I personally think that there will only be seven major car companies that will exist in the coming 10 years," he added, without specifying who he thought the surviving companies would be.

In March, He told Singaporean broadcaster CNA that the Chinese EV industry will see a "knockout tournament" in the next three to four years, followed by an "all-star competition" in the next seven to eight years.

To be sure, He isn't the only auto executive who expects intense competition in the industry.

In October, Mercedes-Benz CEO Ola Källenius told attendees at the Berlin Global Dialogue conference that Western automakers are fighting an existential battle against their Chinese counterparts.

"It's strange. It's a Darwinistic-like price war, market purification. And many of those players that are around now. Many of those are not going to be around five years from now," Källenius said.