Xpeng (NYSE:XPEV) debuted its second-generation P7 super saloon as more than a car, powered by its in-house Turing AI chip and boasting simulation-trained autonomous driving and a conversational smart cockpit.

CEO He Xiaopeng said the EV answers the artificial intelligence era in form and function, aiming squarely at mid-sized rivals like Tesla's Model 3. Despite the fanfare, Xpeng shares slid 2.3% on the news.

Warning! GuruFocus has detected 2 Warning Sign with XPEV.

The robot-like dance of features extends to rapid processing and humanlike vehicle responses, with Xpeng claiming the world's first AI-defined vehicle.

International Motorsthe Xpeng UK importerplans five premium EV models by 2028, starting with G6, X9 and G9 SUVs and potentially rolling out the P7 overseas. Meanwhile, Tesla (NASDAQ:TSLA) is reeling: its China weekly deliveries plunged 58% from the prior week and 69% year-over-year in early May, according to local registration data.

Xpeng's bold push arrives amid mounting pressure on Tesla as rival BYD (BYDDY) ramps EV output and Musk's brand cools in key markets. Xpeng's tighter AI integration and local manufacturing could help it carve market share, but execution risks remain high as external sales plans are still murky. With 5,000 Optimus bots slated next year and now AI cars hitting the road, the automation arms race in China is intensifying.

Why it matters: If Xpeng scales AI-first vehicles abroad, it could disrupt Tesla's China stronghold and accelerate global EV competition.

Investors will watch Xpeng's overseas rollout timeline and Tesla's June-quarter delivery trends for clues on who leads the AI-EV frontier.

This article first appeared on GuruFocus.

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