Tag: XPeng

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Baojun Yep China Electric eMobility EREVs eV Industry News Saic-gm-wuling

Wuling mulls post-delivery fuel-engine option for Baojun Yep

Wuling is considering offering a range-extender option for the Baojun Yep, which would provide the mini EV with the ability to get an extra 80 kilometers of range by refueling.

(Image credit: Baojun)

SAIC-GM-Wuling is considering a range-extender option for the Baojun Yep mini electric vehicle (EV), which went on sale only last month, highlighting a new approach to trying to address range anxiety among EV consumers.

Baojun will not offer an official extended-range electric vehicle (EREV) version of the Yep, but will consider offering a post-delivery range-extender option for the model, Zhou Xing, vice president of SAIC Wuling's brand division, said on Weibo yesterday.

"Because of the call from everyone, the team is looking into the possibility of putting a small generator in the engine compartment," Zhou wrote.

The option, which could cost about 2,000 yuan ($280), could hold four liters of gasoline and thus provide an additional 80 kilometers of range, according to a supplier proposal, he said.

The option is similar to a power bank for a cell phone and would additionally allow the vehicle to support external discharge capability, according to Zhou.

Zhou asked his followers on Weibo if they really wanted the option and if so, they would speed up the rollout process.

Consumers expecting the option can still buy the Baojun Yep now, as it can be installed after delivery, Zhou said.

It's not clear if Wuling's planned option complies with China's vehicle modification regulations.

SAIC-GM-Wuling officially launched the Baojun Yep on May 25, offering it in two versions with starting prices of RMB 79,800 and RMB 89,800, respectively.

Both versions of the model have a battery pack capacity of 28.1 kWh and a combined CLTC range of 303 km.

Baojun's idea to offer a range-extender option for the Yep underscores the appeal of plug-in hybrid or quasi-plug-in hybrid models at a time of transition to electrification in the Chinese automotive industry.

Among Chinese EV startups, (NASDAQ: LI) is known for its EREVs, which delivered a record 28,277 vehicles in May.

For comparison, (NYSE: NIO) and (NYSE: XPEV), which only offers battery electric vehicles (BEVs), have had weak deliveries over the past few months, delivering 6,155 and 7,506 units in May, respectively.

Their peer Leapmotor has abandoned its insistence on offering only BEVs, attracted by the larger market space.

On February 1, Leapmotor unveiled its first EREV model -- an EREV variant of its flagship SUV, the C11. The Leapmotor C11 EREV went on sale on March 1 and deliveries began in mid-March.

In May, Leapmotor delivered 12,058 vehicles, the fourth consecutive month of growth and well above the 1,139 units delivered in January.

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Leapmotor delivers 12,058 units in May, higher-priced C-series dominate-CnEVPost

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China Deliveries Electric eMobility eV EV Data Monthly Data Tesla XPeng

XPeng delivers 7,506 vehicles in May, up 6% from Apr

delivered 7,506 vehicles in May, up 6.03 percent from April but down 25.87 percent year-on-year.

XPeng guided for second-quarter deliveries of 21,000 to 22,000 units when it reported first-quarter earnings on May 24.

The company will begin pre-sales of the G6 SUV, which is aim at competing with 's (NASDAQ: TSLA) Model Y, on June 9.

The XPeng G6 will go on sale in June, with volume deliveries starting in July, and production capacity will climb quickly, the company's management said in a call with analysts after announcing first-quarter earnings.

The G6 will be a hot seller in China's new energy SUV market priced between 200,000 yuan ($28,150) and 300,000 yuan, and will enable XPeng's total deliveries to grow well above the industry's pace in the third quarter, the company said.

Below is its press release, as the CnEVPost article is being updated.

XPeng Inc. (“XPENG” or the “Company,” NYSE: XPEV and HKEX: 9868), a leading Chinese smart electric vehicle (“Smart EV”) company, today announced its vehicle delivery results for May 2023.

In May 2023, XPENG delivered 7,506 Smart EVs. The delivery volume of the P7i has experienced a substantial increase compared to the previous month. The Company will further accelerate deliveries of the P7i in June, with the goal of rapidly bringing customers this popular new model that features outstanding style and design aesthetics and distinguishing smart features.

Presale for the G6 Ultra Smart Coupe SUV begins on June 9, with display vehicles available at our stores.

In May, XPENG invited the media to test drive the G6. Feedback from media on the G6 highlights that the new model has distinct advantages over other EV models in terms of its ADAS capabilities and its 800V platform for fast charging. The Company anticipates the G6 will emerge as one of the most popular, bestselling models in China's NEV SUV market segment with the RMB200,000 to RMB300,000 price range.

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China Electric eMobility eV Tesla XPeng XPeng G6

XPeng to start pre-sales of G6 SUV on Jun 9

The G6 needs to be successful for to be truly relevant to the market again, Deutsche Bank analyst Edison Yu's team said earlier this week.

(Image credit: CnEVPost)

XPeng (NYSE: XPEV) will start pre-sales of the G6, a new SUV aimed at competing with 's (NASDAQ: TSLA) Model Y, in a week's time.

Pre-sales for the XPeng G6 will begin on June 9, the Chinese electric vehicle (EV) maker announced today on Weibo, without giving any further details.

XPeng had previously pre-sold the P5 sedan. As per previous practice, it is expected to announce the G6's pre-sale price next week and the SUV's official price at the end of June.

The XPeng G6 will officially launch in June, with volume deliveries starting in July, and production capacity will climb rapidly, the company's management said in a May 24 analyst call after announcing first-quarter earnings.

The G6 will be a hot seller in China's new energy SUV market priced between 200,000 yuan ($28,150) and 300,000 yuan, and will enable XPeng's total deliveries to grow well above the industry's pace in the third quarter, the company said.

With about two months set aside for the G6 from the start of production to delivery, XPeng expects the model to reach more than double the sales of the P7i, its management said.

"With margins and cash burn looking materially worse following 1Q earnings, we believe management may be making its last stand with the G6," said Deutsche Bank analyst Edison Yu's team in a research note sent to investors on May 30.

Yu's team believes that XPeng management's words on the call indicate that the EV maker expects to sell 6,000-8,000 units of the G6 per month.

The G6 needs to be successful for XPeng to be truly relevant to the market again, Yu's team said.

XPeng unveiled a new architecture called SEPA (Smart Electric Platform Architecture) 2.0 at a technical conference in Shanghai on April 16, saying the G6 would be the first model built on the architecture.

On April 18, XPeng officially unveiled the G6 on the first day of the Shanghai auto show, saying that the G6 is the ultimate form of car before full self-driving is achieved.

The model is based on the 800 V high-voltage platform and can get a 300-kilometer range in as little as 10 minutes on a charge, XPeng said at the time. The company's other 800 V-based model is the flagship G9 SUV.

XPeng cited the Tesla Model Y as its main competitor to the G6 and hopes to attract consumers with its sleeker design and updated interior.

The vehicle is positioned as an all-electric midsize SUV with a length, width and height of 4,753 mm, 1,920 mm and 1,650 mm, respectively, and a wheelbase of 2,890 mm, a regulatory filing in March showed.

For comparison, the Tesla Model Y has a length, width and height of 4,750 mm, 1,921 mm and 1,624 mm, respectively, and a wheelbase of 2,890 mm.

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XPeng making its last stand with G6, says Deutsche Bank

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China Electric eMobility eV Nio NIO Team XPeng XPeng Team

Former XPeng exec joins NIO as head of navigation division, report says

Former Internet center vice general manager Liu Fanfan has joined as head of the navigation and location services division, according to local media.

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NIO (NYSE: NIO) appears to be attracting a lot of XPeng (NYSE: XPEV) talent, and the trend continues.

Liu Fanfan, formerly vice general manager of XPeng's Internet center, has joined NIO as head of its navigation and location services division, local media outlet LatePost reported today.

Liu reports to Zhang Lei, NIO's vice president of digital cockpit and software development, and is also the head of smart cockpit delivery for NIO's NT 3.0 platform models, according to the report.

NIO is phasing out the NT 1.0 platform and transitioning its models to the NT 2.0 platform. The company's sub-brand models, which it plans to begin delivering next year, will be based on the next-generation NT 3.0 platform, according to the previously announced information.

Liu, who has worked for in-car navigation provider Telenav for more than 10 years, joined XPeng in March 2018 and was responsible for the map navigation, in-car systems and app ecosystem business at the Internet center.

During his time at the company, XPeng Internet center developed the in-car system Xmart OS, which debuted on the XPeng G3 in late 2018.

Xmart OS was upgraded to version 2.1.0 in October 2020, and introduced a full-scene voice interaction feature that allows control of 90 percent of XPeng's in-house developed applications by voice, the report noted.

XPeng's team expanded rapidly after its Hong Kong listing in June 2021, growing to nearly 14,000 people by the end of 2021, more than twice the size of the team at the end of 2020.

However, XPeng's team has undergone significant restructuring in 2022, with many of its mid-level R&D staff and executives leaving to join NIO between last year and this year, the LatePost report noted.

Last April, Harry Wong, formerly XPeng's director of self-driving products, officially joined NIO to take charge of the self-driving experience.

On September 6 last year, local automotive website Xchuxing reported that the former XPeng's head of voice recognition, Zhao Hengyi, had left in March and he would join NIO.

LatePost reported today that Zhao joined NIO ahead of Liu and is responsible for businesses including virtual voice assistant Nomi, reporting to Ted Li, NIO's head of product experience.

NIO kicks off preparations for NIO Day 2023

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XPeng making its last stand with G6, says Deutsche Bank

With margins and cash burn looking worse following first-quarter earnings, management may be making its last stand with the G6, Deutsche Bank said.  |  XPeng US | XPeng HK

(Image credit: CnEVPost)

XPeng (NYSE: XPEV) is expected to officially launch its new SUV, the G6, late next month, which analysts say will be crucial as the company continues to face weak sales and financial performance.

"With margins and cash burn looking materially worse following 1Q earnings, we believe management may be making its last stand with the G6," Deutsche Bank analyst Edison Yu's team said in a research note sent to investors yesterday.

The team's previous view assumed XPeng could see stable natural margin improvement from the sharp drop in battery input prices, but those savings were mostly offset by incremental promotional activity and a poor mix.

" Therefore, the importance of the upcoming G6 has become even GREATER," the team wrote.

XPeng reported weaker-than-expected first-quarter earnings on May 24, with gross margins plunging to 1.7 percent. As a comparison, that figure was 12.2 percent and 8.7 percent in the same quarter last year and the fourth quarter of 2022, respectively.

The company reported a negative 2.5 percent vehicle margin in the first quarter, compared to 10.4 percent in the same period in 2022 and 5.7 percent in the fourth quarter of 2022.

The decline was due to increased sales promotions and the expiration of the new energy vehicle (NEV) subsidy in China, XPeng said.

XPeng's new SUV, the G6, will officially launch in June, with volume deliveries starting in July, and production capacity will climb quickly, its management said in a May 24 analyst call after announcing first-quarter earnings.

The G6 will be a hot seller in China's new energy SUV market priced between 200,000 yuan ($28,200) and 300,000 yuan, and will enable XPeng's total deliveries to grow well above the industry's pace in the third quarter, the company said.

The G6 has been set aside about two months from the start of production to delivery, and XPeng expects the model to reach more than twice the sales of the P7i, its management said.

That means, according to Yu's team, that XPeng management expects the G6 to sell 6,000-8,000 units a month.

The G6 needs to be successful for XPeng to be truly relevant to the market again, the team said.

XPeng will likely price the G6 significantly lower than the Model Y (RMB 263,900), hoping to attract consumers with a sleeker design and updated interior, the team said, adding that the X is already taking this approach with a starting price of just RMB 190,000.

A leaked image on Chinese social media on May 22 showed XPeng seeing the first production vehicle of the G6 roll off the line.

XPeng expects second-quarter vehicle deliveries to be between 21,000 and 22,000, and given that it delivered 7,079 vehicles in April, the guidance means the company expects it will deliver a total of 13,921 to 14,921 vehicles in May and June.

Yu's team also noted that XPeng's cash burn trajectory was worse than expected.

"XPeng exited 1Q23 with <25bn RMB in net cash as A/P became a big drag on working capital. This was caused by poor sales performance and also suggests to us suppliers are becoming less accommodative," the team wrote.

After months of lackluster G9 demand, XPeng management may be under pressure from suppliers to be more conservative with its outlook, the team said.

That said, XPeng's operating expenses and capex discipline are still very much intact and should at least get the company through most of next year, Yu's team said.

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XPeng Q1 earnings miss expectations, gross margin falls to 1.7%

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China Deliveries Electric eMobility eV EV Data Insurance Registrations Li Auto Neta Nio Tesla Weekly Data XPeng

China NEV insurance registrations for week ending May 28: Li Auto 7,100, XPeng 2,100, NIO 1,600

's cumulative sales so far this month were around 5,300 units, with the company launching and starting deliveries of the new ES6 on May 24.

For the week of May 22 to May 28, (NASDAQ: LI) sold 7,100 vehicles, continuing to lead among China's new car brands, the company said today on Weibo.

Li Auto didn't explain what that sales volume was based on, but apparently, they were insurance registrations. The company had suspended sharing those numbers earlier this month, but has now resumed sharing them.

Last week's numbers mean that Li Auto sold 25,413 vehicles from May 1 to May 28. In the first three weeks of May, Li Auto's numbers were 4,543, 6,670 and 7,100 vehicles.

Li Auto is currently untroubled by the product switch, and its founder, chairman and CEO Li Xiang said on Weibo on May 24 that the company's five-seat SUV, Li L7, is expected to reach 20,000 monthly sales in October.

All of Li Auto's models currently on sale are extended-range electric vehicles (EREVs), with the other two models being the six-seat Li L9 and Li L8.

NIO (NYSE: NIO) sold 1,600 units last week, according to figures shared by Li Auto.

This means that NIO's cumulative sales for the month through last week were about 5,300 units. NIO's numbers for the first three weeks of May were 1,100, 1,200 and 1,400 units, respectively.

NIO officially launched the new ES6 on May 24, after the wait for the model by potential consumers seemed to have been holding down its sales.

Deliveries of the new ES6 began on the evening of May 24, although the vehicles were produced by NIO in advance rather than customized by consumers to their liking.

NIO began production of the new ES6 based on designer-recommended configuration combinations, and if consumers purchase these vehicles, official deliveries will begin on May 25, according to a May 24 post on the NIO App.

Consumers who wish to customize the vehicles can lock in their orders in the NIO App, and deliveries will begin in mid-June.

(NYSE: XPEV) vehicles sold 2,100 units last week, up from 1,500 units the week before. The numbers were 870 and 1,500 in the first two weeks of May, respectively.

Since May 1, XPeng vehicles have sold 5,970 units this month.

(NASDAQ: TSLA) sold 12,800 units in China last week, up from 10,200 the week before, according to figures shared by Li Auto.

That figure for Tesla was 5,928 and 9,990 in the first two weeks of May and 38,918 cumulatively so far this month.

was at 1,900 last week, down from 2,000 the week before and up from 1,500 in the second week of May. Its numbers for the first week of May are not available.

sold 2,100 units last week, up from 1,500 the week before. That figure was 1,000 and 1,700 units in the first two weeks of May, for a cumulative total of 6,300 units so far this month.

Leapmotor sold 3,600 units last week, up from 3,000 the week before. That figure was 2,200 and 2,500 units in the first two weeks of May, and 11,300 units so far this month.

China NEV insurance registrations for week ending May 21: Li Auto 7,100, XPeng 1,500, NIO 1,400

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China Electric eMobility eV MPV XPeng XPeng X9

XPeng CEO teases MPV model called X9

will open up the MPV market to a younger demographic with the X9, said He Xiaopeng, chairman and CEO of the EV maker.

XPeng (NYSE: XPEV) is starting to warm up for the company's first MPV (multi-purpose vehicle) model, after previously mentioning plans to build such a model.

In addition to the G6, XPeng has recently been building a new MPV, the X9, the Chinese electric vehicle (EV) maker's chairman and CEO He Xiaopeng said today on Weibo.

"We will open up the MPV market for the younger demographic with this product," Mr. He said.

Mr. He's Weibo didn't mention anything more, but was accompanied by a picture showing the logo of the MPV's name.

XPeng had mentioned last year that the company would launch its first MPV in 2023, and provided more details during its earnings call on May 24.

XPeng will launch a 7-seat all-electric MPV, internally codenamed X9, in the fourth quarter of this year, the company's management said in the call.

Mr. He's Weibo today implies that the model is being finally named X9.

XPeng is defining the 7-seat MPV thinking about how young people associate with MPVs and will go into more detail about the logic of young people buying MPVs at its launch at the end of the year, the company said.

In the second half of the year, gross margin levels will steadily improve with deliveries of the G6, P7i and the MPV, the company said in the Wednesday call.

There are few good MPVs to choose from in the Chinese market before 2022, with the most well-known being the Buick GL8 and the Toyota Alphard. There are even fewer new-energy MPVs.

Dongfeng Motor's EV subsidiary Voyah launched its MPV model Voyah Dreamer in China on May 7, 2022.

's premium brand Denza launched its D9 MPV on May 16, 2022, and launched its Zeekr 009 MPV on November 2.

(NASDAQ: LI) is also expected to roll out its first MPV by the end of the year, though (NYSE: NIO) has stressed several times that it has no plans to build such a model in the near future.

It's worth noting that the MPV market has been a niche segment in China.

Retail sales of passenger cars in China in April were 1,623,568 units, with 779,511 sedans, 748,503 SUVs and 95,554 MPVs, according to the China Passenger Car Association (CPCA).

This means that MPVs contributed only 5.9 percent of China's passenger car sales in April.

China Apr auto sales breakdown: Sedan 779,511, SUV 748,503, MPV 95,554

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China Electric eMobility eV Li Auto Smart Driving

Li Auto rapidly expanding smart driving and chip teams, report says

is hiring talent in China as well as abroad, and some of its core executives recently visited Silicon Valley, according to local media.  |  Li Auto US | Li Auto HK

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Li Auto (NASDAQ: LI) is ramping up its R&D investment at a time when its major local peers are struggling with weak sales.

Li Auto's smart driving and chip teams are expanding rapidly, and the extended-range electric vehicle (EREV) maker is hiring talent in China and abroad, according to a report today in local media outlet 36kr.

Some of Li Auto's core executives, including senior vice president Fan Haoyu, smart driving vice president Lang Xianpeng, and product strategy chief Zhang Xiao, recently visited Silicon Valley and launched recruiting presentations at universities, the report said, citing industry sources.

As part of its efforts to ramp up recruitment of talent for its smart driving R&D team, Li Auto even asked employees to recommend resumes, according to the report.

In addition to its smart driving team, Li Auto's chip development team is also expanding, with a new chip lead, Luo Min, already on board to fill the position, which was vacant, the report said.

Li Auto's chip team had fewer than 100 people last year, and the company plans to expand it to about 200 this year, according to the report.

Li Auto invited some of Zeku's employees to talk about onboarding after cell phone maker OPPO shut down the chip design unit, the report said.

As China's new energy vehicle (NEV) industry enters 2023 with weak sales, (NYSE: NIO) and (NYSE: XPEV) were seeing sales decline due to product switches.

In contrast, Li Auto maintained strong sales, delivering 25,681 vehicles in April, another monthly high and the second consecutive month over the 20,000-delivery mark.

Li Auto's 5-seat SUV, the Li L7, delivered more than 10,000 units in April, its first full month of deliveries.

On April 18, Li Auto unveiled its all-electric solution on the first day of the Shanghai auto show, along with its latest generation of assisted driving system, AD Max 3.0, and said the software will be free for life.

AD Max 3.0's all-scenario Navigation on ADAS (NOA) will kick off internal testing this quarter and will cover more than 100 cities by the end of the year, Li Auto said at the time.

Li Auto CEO predicts China NEV penetration to exceed 80% by Dec 2025

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China Earnings Earnings Call Electric eMobility eV XPeng

XPeng Q1 earnings call: Key takeaways

aims to reach 15,000 monthly deliveries in the third quarter and 20,000 monthly deliveries in the fourth quarter, its management said.  |  XPeng US | XPeng HK

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XPeng (NYSE: XPEV) reported first-quarter earnings on May 24 and held a conference call with analysts afterward.

Below are the key points compiled by CnEVPost based on the call.

XPeng management presentation

Over the past four months, XPeng orders have grown in each month compared to the previous month, despite macroeconomic challenges and fiercer industry competition.

The high-end version of the P7i, the ternary lithium battery version, has exceeded expectations to the extent that the originally prepared capacity could not meet consumer demand.

Compared to previous versions, the P7i has a more streamlined SKU and a tighter rhythm of launch.

Starting in June, XPeng will work with its supplier partners to increase the capacity of P7i components and accelerate its delivery.

XPeng's first new model based on SEPA 2.0 architecture, the G6, is equipped with the industry's most advanced 800-volt high-voltage system and 3C fast-charging battery with a range of up to 755 km.

The G6 will be delivered with industry-leading XNGP technology, and media test drives of the model began last week, with feedback that the model is significantly different from other electric vehicles on the market in terms of smart driving and energy consumption with 800-volt high-voltage fast charging.

The G6 will be officially launched in June, with volume deliveries starting in July, and production capacity will climb rapidly.

The G6 will be a hot seller in the Chinese new energy SUV market in the price range of RMB 200,000 ($28,325) to 300,000.

Deliveries of the G6 will enable XPeng's total deliveries to grow well above the industry's pace in the third quarter, and the company will see the first sales inflection point following its strategic and organizational realignment.

XPeng will launch a 7-seat all-electric MPV, internally codenamed X9, in the fourth quarter of this year.

XPeng will introduce more clearly defined and better equipped versions of its existing models this year, allowing sales to rise another notch.

XPeng is confident that 2023 will be the inflection point for its smart technology, with the majority of potential customers recognizing its value in 2024 to 2025.

At the end of March, XPeng pushed out City NGP and XNGP features to Max versions of several models in Guangzhou, Shenzhen and Shanghai.

Customer feedback on these assisted driving features has been positive, with mileage penetration exceeding 60 percent in the first month of rollout.

Following XPeng's test drives of XNGP in Guangzhou, Shenzhen and Shanghai, orders for the Max versions of the P7i and G9 in those cities increased significantly in April, by more than 50 percent.

The company plans to officially launch Highway NGP 2.0 in June, and XPeng has rewritten the system based on the XNGP framework with five times more code than the original.

XPeng expects to make Highway NGP 2.0 a near-L4 autonomous driving experience, with virtually zero takeover.

This year, XPeng expects to achieve less than 1 takeover per 1,000 km in highway scenarios.

By the end of the third quarter of this year, XPeng will roll out XNGP without relying on high precision maps in cities in China that do not have high precision maps.

In terms of the difficulty of mass production, XNGP without relying on high precision maps is nearly 100 times more than highway NGP with high precision maps, which is an important watershed to test the team's technical and data capabilities.

The actual user experience will be greatly improved after this feature is implemented. Currently XNGP has reached the driving level of novice drivers.

XPeng hopes to release an OTA update every quarter thereafter to improve the XNGP experience.

As the XNGP continues to break through in experience and cost, XPeng's Max version vehicles with XNGP are expected to see a big increase in sales in the fourth quarter of this year.

XPeng has recently brought in several new designers and will also bring in outside teams to compete creatively with in-house in the design process of new models.

These adjustments will bring XPeng's future new models and facelifts to the top of the industry in terms of interior and exterior styling.

Since the first quarter, XPeng's marketing and service system has changed significantly thanks to the efforts of new president Wang Fengying and the team. The user experience throughout the sales and service process has improved, speeding up the response time to user needs.

One of the core indicators XPeng focuses on, NPS, has been steadily improving every month from the beginning of this year to April, and has returned to the top level in the industry in April.

In the coming quarters, XPeng's primary goal will be to rapidly expand sales to capture a larger share of the electric vehicle market.

XPeng has completed the flattening of the channel management and will optimize the current sales network to improve the overall capacity of the channel.

While improving the efficiency of the sales network in Tier 1 and Tier 2 cities, XPeng will also bring in more dealer partners in Tier 3 and Tier 4 cities to support its product layout and sales targets in the RMB 150,000 to 350,000 price range in the coming years.

Technological changes and fierce competition will reshape the landscape of China's auto industry in the next three years. In addition to excellent product definition and technological innovation, extreme cost reduction and high efficiency will be the key to win.

XPeng's SEPA 2.0 architecture is highly competitive in R&D efficiency innovation, and the mass production of G6 marks that the architecture and XPeng's intense technology development over the past five years have allowed it to build up its technology platform capability.

This will keep XPeng at the forefront of technology for the next three years, while the company is launching more new models based on the SEPA 2.0 architecture that are more cost competitive and have a consistent usage and operating experience.

XPeng is working on several new models that will cover the RMB 150,000 to 350,000 price range, sharing power, electronics, smart cabin and smart driving platforms.

XPeng expects to further reduce the development cycle of new models by 20 percent, and expects to achieve a component sharing rate of up to 80 percent for the architecture part, thus allowing the development cost and BOM cost of future models to be significantly reduced.

XPeng is working on a clear and feasible technical solution to reduce the cost of the Max version by 25 percent by the end of next year.

Competition currently revolves around volume, but after 2025, the focus will be on a combination of innovation at scale, design cost, efficiency, quality, and globalization.

XPeng had over RMB 34 billion in cash at the end of the first quarter, and will allow R&D investment to focus on customer-approved areas in the future.

XPeng will optimize the organization and process management to further improve the efficiency of company-wide operations.

Starting in July, the delivery of G6 and other new products will allow XPeng sales to grow rapidly, and monthly deliveries in the third quarter are expected to be substantially higher than in the second quarter.

XPeng's target for monthly deliveries in the fourth quarter is above 20,000 units, at which time operating cash flow is expected to turn positive.

XPeng expects total deliveries in the second quarter to be about 21,000 to 22,000 units, up 15 percent to 21 percent from the first quarter, and revenue is expected to be RMB 4.5 to 4.7 billion.

Below are the key points of the Q&A session.

Q1: What pricing strategy will XPeng use for the G6 and future models?

A: Currently, XPeng's overall strategy is a balanced pricing approach with scale first.

Pricing for the XPeng G6 and subsequent models will take into account the cost fluctuations of raw materials, including lithium carbonate, and will allow for relatively manageable costs. Ultimately, we expect to achieve competitive pricing and maintain it over time, while prioritizing scale.

Q2: Has the supply chain bottleneck of P7i been solved and how long will the capacity creep time of G6 be?

A: The G6 has been set aside for about two months from SOP to delivery. The model will be released in June and deliveries will start in July. With a two-month cushion, monthly deliveries of the G6 are expected to climb much faster than the G9 and P7i in the third quarter.

Compared to the P7i, the G6 has a well-prepared supply chain and we expect the model to achieve a rapid sales creep.

For the problem of low yield rate of integrated die casting, we have been experimenting for more than a year and it is progressing smoothly and the yield rate is as expected, which will not be a problem for G6.

Q3: What impact do you think the drop in battery raw material prices will have on battery costs, and on gross profit in the second quarter?

A: In the first quarter, XPeng's battery cost decreased by 5 percent compared with the fourth quarter of last year, benefiting from the decrease in the price of battery raw materials, and the battery cost in the second quarter is expected to decrease by 10 to 12 percent compared with the fourth quarter of last year.

Battery costs account for about 40 percent of total costs, so a 7 percent drop in battery costs in the second quarter would mean about a 3-4 percent improvement in gross margin.

This is just a judgment from the raw material perspective, the revenue side also has a very important impact on the gross margin.

Q4: Will you adjust your full-year delivery forecast?

A: G6 will start volume delivery in July, XPeng delivery growth in the third and fourth quarters will be expected to be higher than the market growth rate.

XPeng is expected to reach the target of 15,000 monthly deliveries in the third quarter and 20,000 monthly deliveries in the fourth quarter.

Q5: What is the order and capacity situation of P7i? How do you anticipate the demand for new models?

A: The supply chain bottleneck of P7i is mainly the lack of preparation of battery and battery-related parts. The production capacity of the ternary lithium battery will be improved in May and June, which will be able to meet the delivery demand of P7i ternary lithium battery version.

Regarding the estimation of industry demand and new model demand, the industry is not very stable recently, XPeng's estimation of demand will remain robust and work with suppliers based on this.

Q6: What is the positioning of your MPV model? Does it differ more from the more youthful image of previous products, and how do you make the model relate to XPeng's youthful and technological positioning?

A: XPeng's current main user group is between 25 and 35 years old, and the unemployment rate of young people has no significant impact on sales.

XPeng is thinking about how young people can be associated with MPV when defining 7-seater MPV, and will introduce the logic of young people buying MPV in detail at the end of the year launch.

Q7: What are your expectations for gross margin in 2023?

A: XPeng still has some sales volume pressure in the second quarter, but continued cost reduction will have a positive impact.

In the second half of the year, gross margin levels will improve steadily throughout the year with the delivery of the G6, P7i and MPV.

Significant improvement in XPeng gross margin will come after cost reduction measures start to be implemented and sales volumes improve, which will be reflected in 2024.

Q8: What are your expectations for lithium prices? What is the proportion of lithium iron phosphate and lithium ternary batteries used in the vehicle models? How does this affect costs?

The current short-term lithium price rebound is temporary, and prices will go down in the second half of the year and are expected to fall to within RMB 200,000.

Today XPeng and its peers are pricing batteries flexibly based on market prices.

XPeng's most important innovation goal is to achieve the longest range with the fewest batteries, so the use of lithium iron phosphate or lithium iron phosphate-like batteries will increase significantly in proportion.

This will bring down the cost of the vehicle, safety will be improved, and the range will satisfy the customer.

Q9: What is the contribution of XNGP to orders after its launch?

XPeng launched XNGP in Shenzhen, Shanghai and Guangzhou in March, and customers in these three cities can experience the XNGP features. In April, there was a 50 percent increase in sales of P7i and G9 in these three cities.

XPeng believes that as more cities see XNGP available in the second half of the year, and as the XNGP user experience continues to be optimized, it will help further improve orders.

XNGP will be free of its reliance on high-precision maps by the end of the third quarter when the launch of the feature will not require approval, and it will cover more cities this year and next.

Q10: How does XPeng compare to its peers in terms of assisted driving? Will the short-term decline in sales affect data collection to the extent that it will limit the progress of assisted driving development?

Currently, no other company has reached XPeng's level in cities without high-precision maps, and the company is 12 months ahead of its peers in terms of volume production for autonomous driving.

Current volumes are sufficient for the generalization of vision or language models. It needs to be seen in the future whether more vehicles on the road can improve the accuracy and reliability of assisted driving.

Q11: What are XPeng's breakdown sales targets for different models for the second half of the year?

XPeng wants the G6 to reach more than twice the sales of the P7i, and wants G9 sales to increase from current levels, but cannot provide a breakdown at this time.

Q12: What is XPeng's product plan for 2023-2025? Will a lower-priced model be launched?

XPeng will launch about 10 models on the same platform while controlling costs.

The company's main price range will remain RMB 200,000 to 300,000, while it will also offer products in the sub-RMB 200,000 and over RMB 300,000 price ranges, but not as a primary target.

($1 = RMB7.0609)

XPeng Q1 earnings miss expectations, gross margin falls to 1.7%

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XPeng Q1 earnings: Deutsche Bank’s first look

" delivered even softer 1Q23 results than we previewed, accompanied by a muted 2Q outlook," Edison Yu's team said.

XPeng (NYSE: XPEV) reported weaker-than-expected first-quarter earnings today, and as usual, Deutsche Bank analyst Edison Yu's team provided their first look.

Here is the research note the team sent to investors today.

1Q23 Earnings First Look

XPeng delivered even softer 1Q23 results than we previewed, accompanied by a muted 2Q outlook.

Volume for 1Q was already reported at 18,230 units, leading to revenue of 4.03bn RMB, essentially in line with our 4.04bn estimate; vehicle pricing was slightly lower, offset by "Services and other."

Total gross margin declined 700bps QoQ to just 1.7%, missing our 5.0% estimate (consensus 6.1%), driven by lower vehicle margin (-2.5% vs. our 0.4% due to aggressive price cuts/promotions).

Opex of 2,654m came in below our model as higher R&D was offset by lower SG&A.

All together, EPS of (2.57) came in about in line with our (2.52) forecast.

Management provided a muted 2Q23 outlook, calling for 21,000-22,000 deliveries, vs. our 24,000 forecast, translating into 4.5-4.7bn RMB in revenue (vs. our 5.6bn).

This implies May/June seeing little to no MoM improvement as April garnered 7,079 units and pricing/mix facing further pressure (G9 demand still struggling and P7i constrained by component supply).

On the earnings call, we will look for further commentary on the exact timing of G6 deliveries (SOP seemingly has already begun), pricing, and volume expectations.

XPeng Q1 earnings miss expectations, gross margin falls to 1.7%

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