This report is from this week’s CNBC’s The China Connection publication, which brings you insights and evaluation on what’s driving the world’s second-largest financial system. You’ll be able to subscribe right here.
The large story
Cultural shifts are refined but elementary for any firm aiming to succeed past its dwelling market.
After I visited Chinese language electrical automotive firm Xpeng‘s new headquarters in Guangzhou final week, what stood out wasn’t simply how shiny it was in comparison with the constructing I would visited final 12 months, however the fluency of its international mindset, all the way down to the small particulars like correct English translations in indicators and shows. It went past the cursory “innovation” banners usually seen in China.
Leaders of Xpeng’s autonomous driving, robotics and flying automotive items every delivered 40-minute shows solely in English — together with their decks — with none translation machine. In dialog with reporters, Xpeng founder and CEO He Xiaopeng even declared a ten-year objective to generate half of the corporate’s gross sales from outdoors China.
He has cause to be upbeat. Xpeng notched 12 straight months of greater than 30,000 deliveries every, and exported a small however rising variety of automobiles: 29,000 in simply three quarters. That was greater than double what Xpeng shipped from a 12 months earlier.
Chinese language electrical automotive firm Xpeng opened its new headquarters in Guangzhou, China, and most workers began working there in Nov. 2025.
CNBC | Evelyn Cheng
Xpeng’s international ambitions mirror a broader pattern throughout China. Within the final 12 months or so, abroad growth has change into a prime precedence for almost each Chinese language firm — an eagerness that Joe Ngai, chairman of McKinsey Better China, mentioned he is by no means seen.
“It is astonishing what this phenomenon is,” he mentioned, noting that fierce competitors in China is driving native firms to hunt greater revenue margins overseas. However he cautioned it will not be straightforward, and that native partnerships can be essential.
Abroad markets solely accounted for 8% of whole income for the 50 largest Chinese language firms as of 2021, in response to McKinsey. That’s far beneath 31% in abroad income for the most important U.S. firms, the information confirmed.
Discovering traction
I first realized about Xpeng on the sidelines of CNBC’s East Tech West convention in 2018, when the Alibaba-backed startup touted its edge in autonomous driving and drew comparisons to Tesla.
However Xpeng wasn’t capable of launch regulator-approved driver-assist methods at scale for a number of years but. Deliveries averaged simply over 10,000 a month in 2022, and dipped properly beneath that in early 2023 whereas rivals surged forward.
At a small Xpeng occasion in Shanghai that I attended in March 2023, there have been hints that the startup might need the tech — simply not the product Chinese language customers wished. The occasion speaker, Xinzhou Wu, head of autonomous driving, quickly left to steer Nvidia‘s automotive chip enterprise.
It was additionally in early 2023 that Xpeng introduced in veteran Nice Wall Motor government Fengying Wang as president to supervise product planning and gross sales. Her management, together with the launch of a extra reasonably priced Mona M03 automotive, helped spark the corporate’s turnaround. Wang stays with Xpeng immediately.
“In fact, it is a lot better when [the electric car companies have an] English-language interface,” mentioned Nick Kolodko, a Shanghai-based auto influencer who has lived in China for over a decade. He famous how some Chinese language EV startups in Europe had in-car AI assistants that did not help native languages.
He is since noticed some Chinese language automakers granting their abroad groups extra management during the last 18 months or so, although he mentioned there’s nonetheless a niche with European rivals in shaping a compelling model narrative.
Critically for Xpeng, it secured a $700 million funding from German auto large Volkswagen in July 2023. The 2 firms have progressively expanded the partnership to incorporate technological improvement.
Down the street, “Chinese language EV makers may also take a variety of [intellectual property] charges from such [tech] collaboration,” mentioned George Chen, a associate at The Asia Group. “This shall be vital as a result of 30, 40 years in the past, European carmakers and American carmakers [were] doing precisely the identical factor in Chinese language markets.”
For now, Xpeng is taking step one past exporting automobiles and native manufacturing.
The corporate opened its first European manufacturing unit in Austria in August, and plans to provide tens of 1000’s of automobiles there subsequent 12 months, in response to Brian Gu, co-president of Xpeng. It’s partnering with Canadian automotive elements producer Magna to assemble the automobiles domestically in Graz, Austria.
A former JPMorgan government, Gu has been with Xpeng since its early days and helped the startup construct ties with Wall Road forward of its U.S. and Hong Kong listings.
Xpeng is about to launch earnings on Monday. Within the first half of 2025, Xpeng claimed to be the best-selling Chinese language new-energy car startup model in Norway, France, Singapore and Israel.
“The entire abroad growth of Chinese language firms shall be a part of the worldwide enterprise panorama for the following 5 years,” McKinsey’s Ngai mentioned, “and I’ve zero doubts about it.”
Correction: This story has been up to date to mirror George Chen’s title, and to make clear that Xpeng partnered with Magna for the meeting of automobiles in Austria.
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Weiwen Han, Bain & Co.’s Asia-Pacific retail follow chief, mentioned China’s gross sales “month” may surpass U.S. Cyber Week gross sales and proceed to develop steadily.
Fred Hu, Chairman and CEO of Primavera Capital, mentioned China’s financial system shall be in a lot better form as soon as client spending normalizes.
Georges Elhedery, CEO of HSBC, mentioned the impression of tariffs on international commerce and added that China’s financial rebalancing is a “welcome improvement.”
Must know
China’s exports dip. Shipments of Chinese language items fell in October for the primary time in additional than a 12 months as companies slowed their ramp-up of orders to pre-empt tariffs.
Uneasy U.S.-China truce. Beijing has formalized agreements to delay restrictions on sure rare-earth exports for a 12 months.
Luckin’s second act. Jinyi Guo, CEO of Luckin Espresso, mentioned the corporate is making ready to relist within the U.S. 5 years after an accounting scandal. It’ll face new Chinese language IPO guidelines to take action.
Quote of the week
The one factor that was completely different from Xpeng AI day from its earlier tech day, is that it’s speaking extra about its ambition oversea as a model, not simply as a EV maker, as a result of it’s pushing out all these different bodily AI merchandise past simply an electrical car.
Within the markets
Chinese language inventory markets traded combined following Tuesday’s session on Wall Road, the place traders offered off expertise names and drove a rally in additional risk-off elements of the market.
Hong Kong’s Grasp Seng Index added 0.81%, whereas mainland’s CSI 300 misplaced 0.13%.
The offshore Chinese language yuan final traded at 7.1189 towards the greenback.
The efficiency of the Shanghai Composite over the previous 12 months.
Arising
Nov. 13: Baidu holds annual convention with AI particulars anticipated; Tencent releases quarterly earnings
Nov. 14: China releases October retail gross sales, industrial manufacturing and funding information; Alibaba wraps up its prolonged Singles Day purchasing occasion
Nov. 17: Xpeng to launch quarterly earnings
Nov. 18: Baidu, iQiyi to launch quarterly outcomes
