Xpeng Motors, the Chinese-based electric car company, is entering into the ride-hailing marketplace and will be taking on intense competition from huge companies like Uber and Didi Chuxing.
Xpeng recently received the proper license from local government officials and is expected to begin testing their platform sometime this month.
“It will be an important component to Xpeng’s ecosystem, with cars as the entry point to broader service offering,” said an employee who declined to be named as the information is not yet public. “The ride-hailing service would enable the company to promote its cars to a larger customer base and improve user experience.”
The company already has career openings for fleet managers, operations, and business developments around mobility services up on their website. However Xpeng hasn't made any statements about how big their fleet of vehicles will be or when they'll be ready to deploy but they did state that their focus is to “build a smart mobility ecosystem with truly intelligent products, best user experience and value-added services for customers."
This commitment would have Xpeng join several other vehicle manufacturers and businesses diving into the ride-hailing market even though the biggest companies are reporting losses.
A month ago, Didi Chuxing reported that the company wasn't making profit despite being China's biggest ride-hailing platform. For every ride the company completed toward the end of 2018 it earned 19 cents, but every ride cost the company 21 cents.
“The gap of 2 percent is shouldered by Didi itself, made up from the capital raised in previous funding rounds to cover [the loss],” Cheng Wei, CEO and Founder of Didi said. “The situation is not sustainable in the long run, as we may not be able to continue normal operations if we run out of money one day.”
Didi Chuxing's troubles aren't unique. Lyft, which recently became the first ride-hailing company to have their IPO, also had intense losses of $1.14 billion during their last quarter. As for Uber, who also recently had their own IPO, has stated they expect the business to suffer a $1 billion loss during the latest quarter.
Started up in 2014, Xpeng Motors recently deployed their first car, the electric G3 SUV, and introduced a new model, the P7. Last month they delivered 2,200 vehicles and are expected to deliver 40,000 cars by the end of the year.
Xpeng has fund raised $1.4 billion in total including from sources like Alibaba and Lei Jun, the Founder of Xiaomi Corp.
The company's entrance into ride-hailing comes as several others are also considering the same move. BMW recently announced they have a ride-hailing permit in China, the first worldwide car manufacturer to received such a permit.