Xpeng (NYSE:XPEV) unveiled a new version of its P7 electric vehicle on Thursday, positioning it as an advanced AI-powered sedan aimed at intensifying competition with Tesla (NASDAQ:TSLA).

The second-generation P7, described by CEO He Xiaopeng as more than a car, integrates Xpeng's in-house Turing AI chip. The company claims the vehicle is the first AI-defined model, offering autonomous driving features and a conversational voice assistant designed to mimic human interaction.

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The car targets the same segment as Tesla's Model 3, a key seller in the mid-size EV space. Xpeng said the vehicle's performance and intelligent systems align with the demands of an AI-driven future.

It remains unclear whether the P7 will be sold outside China. However, Xpeng's UK distributor, International Motors, expects to roll out five models in the country by 2028. Current offerings include the G6, G9, and X9 SUVs.

Xpeng shares dropped nearly 2% following the launch. The broader EV market has faced headwinds, with Tesla's China sales reportedly falling 69% year-over-year during the week of May 5 to 11.

This article first appeared on GuruFocus.

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