Chinese electric car maker Xpeng on ‘right side’ of regulation: Exec

A new Xpeng P7 car is shown at Xpeng Motors’ flagship store in a shopping mall. The Xpeng P7 is one of two popular models from Xpeng Motors.

Zhang Peng | LightRocket | Getty Images

GUANGZHOU, China – Xpeng’s chairman says the Chinese electric vehicle maker is on the “right side of regulation” as Chinese authorities tighten data privacy rules aimed specifically at automakers.

The Guangzhou-based company is one of several start-ups challenging Tesla in the world’s largest electric vehicle market.

Automakers are collecting an increasing amount of data to train algorithms for autonomous driving and other so-called “smart” features in the car.

But Chinese regulators have become concerned about the amount of data collected by companies across industries.

“I think our industry is really touted as industry that will be supported by the government. They see it as a critical infrastructure as well as an important component of manufacturing, smart technology and development of a carbon neutral agenda. Let’s see in, which Government Xpeng President Brian Gu told CNBC in an interview on Friday, “is working very hard.”

“So we’re really on the right side of regulation.”

This month, China passed a major data protection law called the Personal Information Protection Act (PIPL) that deals with cyber security legislation and data protection legislation.

China’s cyberspace regulator also issued draft rules on data protection management for automakers this month. Officials urged car companies to reduce “disorganized collection and misuse” of automotive data.

While China’s regulatory actions have wiped billions from the value of Internet companies over the past few months, the country’s electric vehicle companies have remained relatively unaffected and share prices have recovered.

Indeed, the development of electric vehicles through China is a national priority that has supported the development of the industry through incentives such as subsidies.

Gu said Xpeng has a “very strong organizational … focus on data security” and has communication with government agencies on the subject.

Xpeng is developing its own limited self-driving features called XPILOT for its cars. A large amount of data is required to train such systems. Gu said the new data rules on automakers are “designed not to stifle innovation” but “to ensure that we handle (data) … with care.”

tightening SEC requirements

Going forward, we will certainly make sure that we strengthen whatever disclosures are necessary to meet the regulatory requirement in China and the US.

Securities and Exchange Commission (SEC) Chairman Gary Gensler told Bloomberg this week that Chinese companies listed in the US need to give investors a better understanding of regulatory and political risks. It’s not clear what might happen at this point, but Gu said Xpeng is monitoring the situation.

“Going forward, we will certainly make sure we strengthen whatever disclosures we make to meet regulatory requirement in China as well as the US,” Gu said.

International expansion

On Thursday, Xpeng posted total revenue of 3.76 billion yuan ($582.5 million) in the second quarter, representing an increase of 536.7% year-over-year. However, the company’s net loss widened for the quarter as it expands marketing and production capacity.

The company began shipping its flagship P7 sedan in its first international market, Norway, on Tuesday.

Read more about electric vehicles from CNBC Pro

Gu said Europe and the surrounding Nordic countries would be the first markets the company would expand outside China as they have high penetration rates and good infrastructure for electric vehicles.

“But overall, I think we have a vision to tackle a broad range of sectors in other countries in Europe as well as other developed markets,” Gu said. “I think developing markets will probably be a little bit later, because we see demand probably slower than developed countries.”

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