Industry dynamics

Xpeng and Li Auto CEOs both test positive for Covid

Publishtime:1970-01-01 08:00:00 Views:27

While contracting Covid is not something to brag about, the CEOs of Xpeng and Li Auto are clearly more excited to see no more Covid disruptions after a short period of suffering.

The helmsmen of two of China's most high-profile electric vehicle makers have both tested positive for Covid, and while that's no cause for celebration, they're clearly happy to talk about it now that they have less to worry about as the supply chain continues to suffer the kind of ongoing shocks it did earlier.

He Xiaopeng, the chairman and CEO of Guangzhou-based Xpeng (NYSE: XPEV), hinted on Weibo Friday that he had tested positive for Covid, and so did all of the management people who will be meeting with him.

Here's what Mr. He posted on Weibo:

I have a meeting tomorrow that will take all day. I said on the phone that I need remote access because the Covid antigen test I just took is still positive and I'm worried about affecting everyone.

The person on the other end said that they are not worried. They said you could attend in person and we could eat together by the way. Because all the attendees were positive, it was only those who were not infected needed remote access (there are no more people who have tested negative).

Mr. He attached a picture to the Weibo showing several sheep. In Chinese characters, "羊" (sheep or goat) is pronounced the same as "阳" (sun or positive).

Two days before Mr. He shared the experience, Li Xiang, founder, chairman and CEO of Beijing-based Li Auto (NASDAQ: LI), said on Weibo on December 14 that everyone in his family was infected, with each experiencing high fevers of 39-40 degrees Celsius and body aches, with no symptom-free ones.

"This is by far the most painful upper respiratory infection I've ever experienced, with pain all over my body. Without ibuprofen, I would have basically been miserable every day and unable to sleep," Li said, adding, "My whole family is on two shots of vaccines."

From the words shared by Mr. He and Li, it's clear that despite the physical pain the Covid infection has caused them, they believe it's worth it because their companies may not continue to face the kind of ongoing supply chain shocks they had previously faced.

China essentially abandoned its zero-Covid policy earlier this month, and the virus is now in the midst of a massive nationwide outbreak, although no deaths have been reported so far as a result of Covid infections.

On December 19, China had 1,918 new confirmed cases of Covid, 846 in Guangdong, 314 in Beijing, 198 in Chongqing, 93 in Hunan, 87 in Fujian and 23 in Shanghai, according to figures released today by health authorities.

It's worth noting that the figure, which is likely the result of polymerase chain reaction (PCR) tests obtained by authorities, may be far lower than the actual situation. This is because most people may choose to rest at home after infection rather than go out for a PCR test.

For the Chinese EV industry, a widespread outbreak of Covid in the short term will have an impact. But with the establishment of a herd immunity barrier, the Covid situation in China is expected to return to the same level as in other countries after the initial painful phase, thus contributing to the recovery of all industries.

The impact of the Covid outbreak on the supply chain hit the auto industry particularly hard earlier this year.

Late last month, William Li, founder, chairman and CEO of Nio (NYSE: NIO), said he visited the company's plants after Covid quarantine in early November and saw more than 3,000 of his colleagues living in the plants.

At the time, China was still enforcing a strict zero-Covid policy, and the so-called closed-loop production was one of the stopgap measures to lessen the impact.

It is not known if Nio's management team has been affected by the latest Covid outbreak.