In order to achieve faster and long-term development, various personnel changes and organizational adjustments have recently taken place at Li Auto and XPeng, two Chinese electric vehicle manufacturers. Li Auto’s internal restructuring was announced on December 9, while Li Auto completed the changes last month.
On December 9, as Li Auto announced its third-quarter financial report, it added that Shen Yanan, the executive director and president, would leave at the end of June next year, and that Li Xiang, the founder and chairman of Li Auto, had started adjusting the firm’s organizational structure.
Ma Donghui, the chief engineer of Li Auto, will succeed Shen as president and join the board of directors, taking charge of R&D and supply chains. Xie Yan, now a senior vice president, will be the CTO of Li Auto, with full responsibility for the systems and computing group.
Shen has withdrawn from the board of directors to join the committee overseeing the changes. The supply team managed by Shen, including supply chains, manufacturing and quality, will be managed by Ma Donghui, while the business team, including sales, service and charging network, will be directly managed by CEO Li Xiang.
Ma Donghui, as a co-founder and chief engineer of Li Auto, was in charge of product research and development, led the successful development of the Li ONE model, and presided over the research of all extended range and pure electric models. After taking office as president, Ma will be responsible for the whole process from design to production and delivery.
At the financial report conference, Li Xiang said that from 2019, he began to study the world’s top enterprises with a combination of software and hardware, and found that enterprises with similar business models generally upgrade their management mode after they reach a massive scale.
In his view, the biggest feature of a matrix organization is to ensure the management quality of the whole process. Horizontal teams plan, repair and operate development roads, while vertical teams build, drive and operate cars to deliver the created value to consumers.
Li Auto has verified the sustainability of this organizational model through integrated product development, and the delivery of L9 and L8 models is one of its achievements. Li Xiang said, “We must prove that the results of the Li ONE are not accidental, and we must make the success of L9, L8 and L7 inevitable.”
XPeng’s reforms were implemented a little earlier than Li Auto. In October, XPeng began to adjust its organizational structure by setting up five virtual committee organizations to pull through the communication channels of various business lines of the company and improve cooperation efficiency. At the same time, three virtual product matrix organizations are established to ensure customer and market orientation.
After the adjustments that were completed in November, Li Pengcheng was appointed as CEO assistant, reporting to He Xiaopeng, Chairman and CEO of XPeng. According to an individual familiar with the matter, the position of CEO assistant is similar to consultant and the real reason for the appointment is that the poor performance of the G9 model has caused dissatisfaction with the brand leaders.
After this adjustment, XPeng upgraded the business department originally responsible for corporate image to a first-class one, splitting it into two departments for brand PR and product PR, both of which were led by new leaders. According to an individual familiar with the matter, the new vice president of the brand PR department is Wang Tong.
Wang Tong became the vice president of XPeng in June 2019, responsible for improving the team management system and public affairs response in Beijing and Shanghai. Before joining XPeng, he served as vice president of public affairs of Alibaba‘s culture and entertainment group.
The performance of XPeng and Li Auto has not been satisfactory lately. In the third quarter, Li Auto‘s revenue was 9.34 billion yuan ($1.34 billion), a year-on-year increase of 20.2%. A total of 26,524 cars were delivered in the third quarter, up 5.6% year-on-year. The net loss expanded from 641 million yuan in the second quarter to 1.646 billion yuan, while the gross profit margin of vehicles was 12%, which was less than 21.2% in the second quarter of this year.
XPeng‘s revenue in the third quarter was 6.82 billion yuan, up 19.3% year-on-year and down 8.2% quarter-on-quarter. In October and November this year, XPeng delivered only 5,101 vehicles and 5,811 vehicles respectively. As of October, it has achieved less than half of its target this year.