EV expansion: Chinese electric maker Xpeng said it would hire 4,000 personnel this year and invest millions in artificial intelligence (AI), as it seeks to survive what it describes as a "bloody sea" of competition in the world's largest auto market.

The additional employees would represent a 25 per cent expansion of the Volkswagen-backed e-mobility maker's workforce from the latest headcount of 15,829 at the end of 2022.

The expansion was announced in a letter from CEO of Xpend, He Xiaopeng, to employees on Sunday, the first working day after the Lunar New Year holiday.

AI-centric market penetration, personnel expansion

The company will also invest 3.5 billion yuan ($486.36 million) in AI research and development for intelligent driving, He said, adding that Xpeng plans to release around 30 new products or revised models within three years.

"Facing the pessimistic macroeconomic situation, many business partners are drawing back and afraid to invest. I think this is an opportunity for our development," he said, describing 2024 as the first year of the "knockout round" for Chinese auto brands.

"In 2024, we will buck the trend and enter a high-speed positive cycle in the fourth quarter or earlier," he said.

Xpeng's expansion plans contrast with rivals, which are racing to slash costs. Demand continues to falter in the world's largest auto market despite renewed discounting led by Tesla.

Nio, another Chinese EV maker, said in November it would trim its workforce by 10% to improve efficiency amid growing competition.

Facing weaker demand at home, automakers in China have looked to exports as a driving force for growth. But China's growing clout as a vehicle exporter is causing friction abroad.

Earlier this month, China's Ministry of Commerce said it would encourage the new energy vehicle industry to respond to foreign trade restrictions and cooperate with overseas firms, amid a European probe into Chinese subsidies for the sector.

Volkswagen said in July that it would invest around $700 million in Xpeng and purchase a 4.99 per cent stake in the company.

"This year is Xpeng's 10th year. Our performance must more than double," it said.