The Chinese electric vehicle manufacturer Xpeng said it will hire 4,000 employees this year and invest in artificial intelligence as it seeks to survive what it describes as a “bloody sea” of competition in the world’s largest automotive market.
The additional employees will represent a 25% expansion in the electric vehicle manufacturer’s workforce, which has Volkswagen as an investor, compared to the last number of employees, which was 15,829 at the end of 2022.
The expansion was announced in a letter from CEO He Xiaopeng to the employees on Sunday, the first working day after the Chinese Lunar New Year holiday.
The company will also invest 3.5 billion yuan ($486.4 million) in AI research and development, said He, adding that Xpeng plans to launch about 30 new products or revised models within three years.
“Faced with a pessimistic macroeconomic situation, many business partners are withdrawing and afraid to invest. I think this is an opportunity for our development,” said He, describing 2024 as the first year of the “elimination round” for Chinese automotive brands. “In 2024, we will go against the trend and enter a positive high-speed cycle in the fourth quarter or before.”
Xpeng’s expansion plans contrast with rivals who are rushing to cut costs. Demand continues to fluctuate in the world’s largest automotive market, despite new discounts led by Tesla.
Nio, another Chinese electric vehicle manufacturer, said in November that it will reduce its workforce by 10% to improve efficiency amid growing competition.
Facing weaker demand in the country, Chinese automakers have looked to exports as a growth driver. However, China’s growing influence as a vehicle exporter is causing friction abroad.
China’s Ministry of Commerce said earlier this month that it will encourage the new energy vehicle sector to respond to foreign trade restrictions and cooperate with foreign companies amid a European investigation into Chinese subsidies for the sector.
Volkswagen said in July that it will invest around $700 million in a 4.99% stake in Xpeng.
“This year is Xpeng’s tenth year. Our performance should more than double,” said He.
