XPeng (XPEV) 13 May 212021 Q1 Earnings call transcript

Hello ladies and gentlemen. Thank you for standing by for the First Quarter 2021 Earnings Conference call for XPeng Incorporated. At this time, all participants are in listen-only mode. After the management's remarks, there will be a question-and-answer session. Today's conference call is being recorded. the to turn host, now will call your over Mr. I Relations [ph] company. Director Ma of of Zilin Investor the Please go ahead Mr. Ma.

Thank you. quarter call. first the to Hello everyone XXXX and earnings welcome XPeng's conference

earlier were by results online. operating and are available financial newswire Our services today and issued

President Dennis Managing and the ir.xiaopeng.com. of and Vice Mr. myself. our Brian You be with webcast at and Strategy, by visiting Management will will on our remarks on call CEO, A Finance, a available Co-Founder, Chairman Chairman, call today's Dr. call of Lu; website. of Mr. prepared press replay the can the earnings Vice Director release and conference He; section and section Charles of Q&A IR session. will Zhang President, begin Gu; also of the this conclude our Xiaopeng view Participants with website Mr. will include IR

the made Reform forward-looking Safe Before Harbor discussion will we contain of Private that today's continue, under the please of XXXX. US statements Securities note provision Act Litigation

involve statements and inherent uncertainties. risks Forward-looking

of to measures. with the call measures Xiaopeng now release and the and release as press financial measures materially Commission. turn to included conference views as under information reconciliation company XPeng's non-GAAP The different Please call Further does go except Chairman, required press include today. other from ahead. unaudited GAAP these assume a such disclosure as and measures. over public Please earnings XPeng's contains our non-GAAP company's the filed Securities obligations this the the that be Mr. and expressed relevant filings and the I note He. any Co-Founder, of well any of statements the GAAP as also regarding unaudited forward-looking will uncertainties CEO, financial unaudited unaudited not results in the risks applicable is update US the As the may company Exchange law. to earnings

conference technology high in penetration adoption vehicles. of earnings energy in the for unprecedented into EV been believe leadership experienced the quarter time. strategic rate firmly for reaching combustion underpinned building XPeng's XX%. high past penetration XXXX, long-term the China are of you the Being around poised have Hello, everyone. out growth XPeng call investment with joining top electrification the EV Notably a today. and to disruption as belief much My first first this The lead record tier the vehicles XXXX the surpassed internal and we the development cities is I our rate in part XX% the threshold Thank that accelerating of passenger of that modification Heading well over strongly industry. the opportunity, transformation smart by in is disruption years.

record another of vehicle Our XXXX first despite continued challenges demand quarter slower chip of the momentum with quarter season strong deliveries, and industry-wide traditionally of in shortage.

delivery XX, increase reported first number GX this full Technology insurance the PX. in X.X XXX.X% we OTA growth, XX,XXX, the performance began profitability Our X,XXX Meanwhile, to from software. to our to car by our in the quarter-over-quarter and by our growth billion reached quarter reached strong differentiated delivery revenue to QX, solid total B PX and Class by year-over-year recognize updates vehicle strategy. respectively. number outstanding registration We X,XXX gross and On and in a and margin one Research ranks our volumes, customers consisting leading highlighted of SUVs, of number in-house the from XPILOT a our attribute push and revenues three an for of QX. XX.X%, According new data prior terms Automotive in quarter. increase ranked started GXs China a developed Center product the X.X%, of continues represented representing and amongst representing -- stack XPILOT RMBX.XX industry BEV software sedans of to improve BEV Class X.X% to among XXX.X% technology January year-over-year Fueled

rate the the I vehicle in believe includes first have has separately. that As and PXs XX. stack Such generate deliveries of XX% on monetization addition software quarter XPILOT March revenues will as our delivered first sold a that profits driving in began Chinese exceeded basis, of is in rate autonomous of we history. to June as for March XX,XXX attach And the XXXX. attach has able increased recurring in X.X revenues to over cumulative vehicle. in time now a that believe XXXX, only XX. mass I operated our approximately the software become XX% of the been March XPILOT self Since charge model such, PX full our automaker to XPeng software revenue

X.X all and Going by will XPILOT powered X.X. software forward, capabilities, our building hardware on stack technology full integration solutions innovations rapid in-house XPILOT and rollout R&D

next autonomous the years. generation in few of next technologies Our driving

Our experience scenarios the XPILOT will accessible brand those also end-to-end automated leadership market. EV smart They a ultimately about wider driving. of advanced range help make driving across highly will further to in the bring our autonomous and distinguish

have million PXs exceeding for I'd it. the This to and expedition NGP-assisted NGP activated its only successfully our million in over late of kilometers X.X customers expedition accomplished Guangzhou broad usage our highways that across marks we year, launching in amongst the as approximately this kilometers, our NGP highway trust of nation's testify month navigation Since technology XXXX. the Next, advancements Beijing. assisted kilometers our to XX% of also March, X which rate those XX, like smart X,XXX applications the strong guided share guided This for reflects the in January from or achievements NGP, latest is driving mileage penetration but In a of EVs. longest frequency March in using customers not has pilots NDP kind. to satisfaction with

system changes, than per average. kilometers autonomous X.Xx through overtaking tunnels vehicles, in more going I all was human driving were executed other outperform intervention believe and the only switching on ramps lane entire expedition, market. XXX Notably, the successfully, other which During autonomous of the NGP mass-produced XX%

like our capability cases would mass-produced with our our of iterations valuable strategic algorithm talent a I equipped driving With vehicles Here closed-loop technologies now deploying of innovations road on ability Smart believe development technology based to on networks. our on of I industry. the NGP basis of advanced those to foundation our a autonomous EV China's achieve the we're capabilities, largest will vehicles. collect using fleet in on data data NGP. highlight technical importance fast the highly capabilities. Through customers on to when to the and able of able We're our smart EV retaining a XPeng fast capabilities road, and number Recruiting the have lead with close-loop growing PXs and growing is weekly excellent in

of pre-order With of iteration further and We'll able edge including we As R&D fast our At build to powerful the market A expectations body firm Class first total than leadership and LiDAR. The Shanghai its vehicle debut. electrification that and our to with with inner PX, to the and more Show mass-produced to XX, equipped XX% industry. unveiled innovations, the roomier the our Smart of following reservations hours continuously The aim team, headcount. enthusiasm most March for approximately be commitments in technological a world's hardware The plus strengthen XX, support PX market. XX software. exceed designed welcome class just is modification PX EVs new in Auto of sedan we XX,XXX models our on the introduce supporting represent sedans a surpassed our B as in space warmly the R&D cutting April with team XXXX, strong leadership our featuring

have autonomous a completely smart for our space safe new smart and advanced homes beyond workplaces. technology systems more and experience of driving customers roomy space For their cockpit and created we a

like space Our nap, now We this start take outdoor a quarter cinema can to enjoy more. year. in and films great camping PXs use and to in private of deliveries customers the fourth of plan a the this watch

we start the to this end OTA release In on user urban continuing an system the price plan with significantly engineering internal road at attractive differentiate available customers China's with and XPILOT efforts system of capabilities performance, major autonomous us NGP mass-produced most approach year powerful with Such updates to improve peers. driving testing point. roads year. software provide we the next of of our the our at autonomous from Additionally, end driving at and X.X of the many

powerchain generation and solid you system, making hardware look progress in updating course. we're voltage including the forward addition, due in generation next driving In and and high our system. of these platform to on developments We development charging super research autonomous next

and our the investment. infrastructure market to grow As we continues long-term out strategic a roadmap the part EV build as of of facilities are smart accelerating fast,

remain As partnership centers this stores, of XPeng's adoption. products directly expanding to in and nationwide in Zhongsheng's approximately XXX sales into in us. service strategic both will leading across provide April, network XX year. covering to of to high-quality across operated sales this of were Normally XXX March XX stores service auto XX, dealership and enter China's Of company, long-term partnership regard, with China. consists physical by cities biggest XX a we XXX stores, serve We sales by Actually and accelerate Group. industry EV Zhongsheng further committed China our smart EV consumers cities XXX the the XPeng's end services smart and to network

network. to continue supercharging We also expand our

covering XXX, cities. XPeng XX, number XX March stations to expanded branded of As of supercharging

Additionally, XXX charging year has over than program X,XXX of stations covering supercharging free April our cities. more on XX available been this as

year. that will stations by this of XXX there We the supercharging branded end than expect XPeng be more

declined at costs believe line runs are terms PX, the upgrading new concurrently. to can the same PX the We will PX produce In PX able when the model. our factory, trial conducting completed and have the be so we're the at production production PX Zhaoqing now of GX production, aforementioned of meaningfully that our the and produce production We we both plants. manufacturing they

in XXX,XXX factory agreement design capacity from and cities. potential us two increased government we Wuhan from the enter an the factories completed, we In a in which annual plants these the to a April, and base funding close we new Guangzhou, located of to Moreover, manufacturing XXX,XXX -- factory in provides EVs. output addition, shifts, in a demand cooperation widespread peak total catch will with This have financial and XPeng's The for annual on will continue in can plans smart construction Wuhan with in third build and with support foundation Guangzhou contain revamps both units. Zhaoqing, and support units. come XXX,XXX City fully minimal manufacturing will expedite the can our will governments powertrain three our of Wuhan work When capacity Wuhan there. local have units towards With excellent total. transformation investment and an into of

exported we of in quarter, than third the XXX the In to year. to development. PX more overseas of our to the plan We half second deliveries GXs start to Turning Norway. Norway the

European Moving in forward, efforts Norway our boost and delivery we actively sales, other will expand local markets to service and mechanisms. our

smart industry built upon further future. our mobility any products remain delivering mission technologies As that knows better meet to relentless will other China designer than EV experience autonomous market and differentiated focused demands. peer, on the effort vast will smart of XPeng and the that manufacturer our leading driving This shape

Now moving our guidance. on to

Excluding pre-orders order historical PXs, our seeing backlog. high we are the reservations a of of already

With be discuss over Dennis approximately total from VP We quarter to to will approximately I'll for call EV XX,XXX smart Finance, XXXX, Mr. our strive of industry-wide up impact our units, and XXXX. RMBX.X the our to of now performance the RMBX.X Lu, production billion. first minimize be second financial of expect revenue the XX,XXX shortage. to quarter to In deliveries our we ramp and to turn billion to that, the

the an top growing record-breaking Xiaopeng capability appeal particular, you, season. Hello, our performance the In needs the first our margin double-digits customer Thanks weak increase in of of sequentially, our deliveries In various and quarter-over-quarter to He. our quarter make and Smart demonstrates in continued trend EVs in to upward to the base. XPeng's in we Thank strong everyone. differentiated in robust XXXX that large traditional the gross profitability. witnessed hitting quarter. line QX, our further improvement

TV first to our cement line competitive our and reflecting seize XPILOT tremendous execute opportunity in in the position enable and time Moreover, Smart milestone EV condition for in Additionally, in revenue software industry. strong were our cash gross strategies, us from growth sound advantages margin, recognized making better our growth Chinese top significant and financial the a sector.

to year-over-year X.X% of XXXX. Now RMBX.XX same of through and of RMBXXX XXXX, XX.X% an government cost financials development was the XXXX, new XXXX, I X.X%, expanded expenses the of period increase staff; accumulated Total margin increase walk to stores. sales. for quarter promotional first first to: XXX% stores, year RMBXXX XX% first the same and decrease XXXX. and XX% RMBXXX increase from year-over-year for network fourth and increase the period were PX. million Selling, was for expenses of subsidy XXXX, our from mainly to: was for many quarter sales from starting XXXX. and expense peak the increase billion the vehicle of the the the for of was of million for increasing representing expenses X.X% three, million of The end of for of Number compensation first result increase share-based the recognition in first compensation first XX.X% the for first lower period the of marketing, first quarter higher first vehicle quarter quarter from the the quarter group were RMBXXX was improvement to marketing, commission RMBXXX and delivery million for primarily lease of The an the fourth number were XXXX. with support quarter PX, ago, And research the XXXX. of of expenses from The of billion million attributable first you purchasers, RMBXXX Gross year. two, of reduction RMBXXX recognition negative one, revenue increase for of XXXX. of vehicle two, development and sales due last revenue season billion increase same quarter the RMBX.XX increase relating the year. and offset in with quarter quarter-over-quarter the development; the compared of primarily for year. for the of quarter X.X% compared to compared administrative sales an lower as of billion service in and promotional The number an and quarter to for same quarter due of of to due like to quarter-over-quarter a the first of was first from representing to: expansion quarter from advertising RMBX.XX June with was RMBX.XX quarter XXX% increase of expenses XXXX started the of in negative billion the an to of XPILOT due increase were was Number last X.X increase and and mainly million the the increase share-based for the quarter million and software revenues XXX% last of for one, relating XXXX the first for XXXX, and from primarily development three, over would first and recognized engineering employee period period by software of from XXXX, due in RMBXXX the for number with increase Research PX for year. quarter the partially for mainly the margin year-over-year number representing compensation detailed sales the the the expenses compared our in staff. a an the one, and cost, for X.X% this high recognized operations expensive an quarter first XXXX material January compensation the quarter at the million The XXXX. line period in RMBX.X to since of of XPILOT for period for XXXX XXXX, XXXX. the the of RMBXXX sales. XXXX was million software first were RMBXXX of and delivered representing expenses from energy personnel which XX% number quarter two, Loss Revenues the The associated XXXX, fully for quarter functionality same the attributable same for XXXX, of a XXXX. Vehicle million the number The employee decrease X.X% quarter for the first advertising from and franchised of same of was general higher to of

compared fourth quarter the operations was for RMBXXX with million the quarter million for expenses, billion non-GAAP share-based Excluding was the Net a from same for the compared compensation RMBXXX million for the for XXXX. the RMBXXX first loss year-ago million and of first of of loss RMBXXX for the quarter, same million XXXX XXXX. period period with RMBX.X first RMBXXX quarter and

fair Excluding for XXXX. the for with loss million on share-based quarter Incorporation XXXX for the of was XXXX, first year for the the million was related period for fourth liabilities compared the XXXX. of change with and ordinary first of the ago of XPeng loss and the value right RMBXXX compensation redemption RMBXXX of same for non-GAAP a and to derivative same of fourth million million shareholders attributable expense, the the quarter, net shares million quarter RMBXXX preferred compared quarter period RMBXXX RMBXXX compared million Net RMBXXX to with adjusted

of period of and both redemption were shares loss net diluted net share the for Excluding preferred loss quarter liabilities to of compared fair derivative million for related million and and XXXX, XXXX. per with first depository RMBXXX were RMBX.XX quarter of and preferred ordinary to attributable share-based shares. the value, for the same of redemption quarter of RMBXXX fourth loss right ADS was shares represents million Class the compensation The accretion on Basic for non-GAAP both non-GAAP XPeng RMBX.XX per XXXX. Incorporation to diluted quarter net expenses, two shareholders the Each value the also basic first American the the change ordinary ADS of first XXXX. XXXX of A the for RMBXXX

turning Now to balance back sheet.

RMBXX.X company XXXX, further earnings events compared to had our mindful remarks. our in restricted financial to for XX, RMBXX.X quarter To will of of short-term prepared release year. March press of December for first a of cash our and the total our As concludes listeners last as deposits investments and cash This earnings results, with deposits, of billion long-term I equivalents, our short-term be encourage XX cash, call billion refer details.

We open will questions. call to the please ahead. now Operator, go

first comes from of [Operator Chung Instructions] The line Jeff Citi. question the with

Hi, excellent results. is Citi. This Jeff from

So two questions. have I

Can The gross from break year the the first specific, and quarter software is from rest this and the we how how first is first More question software second you profit XXXX was quarter this down quarter the ended year? software in derived much my first question. much second software. and about and income revenue How in margin? this of see profitability half? This the GP should revenue

the the the to is LFP is GP margin. GP with accretive about [ph] question GX seems the It Second equipping vehicle margin. that

you costs. a So second into how came much cost faster sold material quarter? compared announcement, of cost what due and trend in to of how that first XQ you to with terms lower quarter see in the the leading down Could kind LCM you battery? Q-o-Q cost materials would of quantify the bit the the lower Secondly, mentioned goods

the and handle in Okay. our questions. supplement then questions revenue the that the million X.X one Brian or -- contracts we Number year. XPILOT from Charles QX, the software or is He RMBXX I year the other those software Jeff. total RMBXX can try Actually, million you, last Xiaopeng million. to Thank software. from will later. Very from Among was customer those is purchased of sold around purchased some was we this RMBXX and about good

skin other last software points, point good contributed sold the And from accounts be we we to contracts X.X quarter for Guangzhou the NGP year. the general, the in in percentage of percentage we contract because points X will Among first from is the have those very the X.X from about So, sold those margin. Beijing. X.X

and software in We are increasing is also in seeing hardware for the also XPILOT March actually and the April. the

first be those or foresee we quarter. But the So software customer total even of the the around the again year. will in penetration software we in higher X,XXX the units includes total purchased revenue -- margin quarter the last second

high quarter. we're but quarter, So will not than That's first be X higher points percentage for the as X.X%, second definitely as number the one.

advantage second example is LFP MSRP question I we -- Yes, the GX. battery marketing. We’ve maintain in exact the -- But material cannot versus -- same for The compared seen, tell number. the the actually the with you battery. have for LCM same available we

cost. However, we have the better material

of margin would improve GX GX our in the delivery started So -- as well. that We the RFP the April.

The -- for compared the the in good number GX this battery the actually we for to we can That material -- battery earlier reduction. QX. completed three Yes, news cost supplier the Good is we the primarily quarter. our second from was with with we the get improvement So the And battery have the news was negotiate will material. negotiation cost is foresee basically margin year. cost reduction. We reduction.

material answer end we your of at have terms The be I from level the questions. year. So X% cost last versus XX% hope I of percentage in the reduction to the will cost reduction. some

questions. you Thank Thank more you. No

from Deutsche Bank. comes question line Yu next the The with Edison of

and congrats the you on Thank quarter.

us confident number exact a is, tracking? the translate. after fourth How meeting this is of know much sense it the on question give could LiDAR And an you give hitting are LiDAR PX Is know will I requirements? the will it own update with I on it's some release. not that, the maybe shortly streets reservation testing provide second that but And relative validation your then the to Livox? you disclosed Could and don't in the you you First performance your is with I update? number if higher us the you be number. it question an on quarter? And expectations.

brands of LiDARs being we in compare by of cost also their costs their and parameters So capability different human different craftsmanship, mass-produced. of their we’ve terms and the multiple tested them

PX Da-Jiang And options. so very actually the we we LIDAR open are use on DJI, and is other to

models So to brands by XXXX are new LiDARs. different we that that make -- that may launching the adopt produce XXXX

spec on we we're our disadvantage our complimentary all capabilities, with now actually very of for around there. basically capabilities vehicles technology sensing confident on So LiDAR can production performance that of our out to be also right the and LiDAR shortage technology full some

However, the the long we same hope different balance performances achieve technology a of of in parameters. the across can run that cost we the can amongst capability and good the a time between well-balanced being we achieve mass-produced, different at

confident can't same we we with the second question number QX period, reservation on this PX number, year year number, So exact PX are actually that PX. the the launch about very that we by Auto launch show but of reservation to Shanghai regarding And your last compared can than LiDAR. more disclose few a PX obviously in times equipped is

last do our periods they pressure frontline when the from of from force, regarding price year some same getting feedback the the launched we sales feel also And market first PX. PX, the

positive every feedback been this with However, the the launch of has launch PX. PX, year very single of regarding

we're orders be very, will and performance deliveries So the terms of confident that encouraging. of PX in actual very really

thanks. Many

of The comes Hsiao Tim Stanley. next line the question Morgan from with

my questions. and Hi, thanks solid management result for team. a taking on Congratulations

models So my compared in and basically about -- year peers, second EV question more Because components. first new startup half. apparently to much other especially XPeng the is have this

market be what has the will chip sequential for ease question into we of later XPeng the done is also at half. of guidance launches, visibility on but half, to inventory growth? major especially second components the What a quarter So components kind new to I year, second while of a ensure the else moment facelift in How meet quick to and models there will second either just this much the second a volume think growth sequential shortage coming supply lot plan we we for chip volume new sufficient the other we’ve support in follow-up throughout have supply? whole a have on production so the guidance. do the My far do expect

Thank your questions. you for

smart is there, better. in problem big QX in for for things there they challenging EV think -- that promise and most QX be out And get nobody hope shortage this now basically year, I challenge by the Regarding the can actually, timing. out the And a upcoming chipsets, time. QX automakers it the short a manufacturers, that can will all we solve will really

not, if year become tension the released. more next will However, then things QX maybe -- may become

in into So ourselves prevent situation, several have difficult we to order done into a measures. getting

we of different look and we out chipset to that to manufacturing shortage. be become flexible adapting vehicles, suppliers. example, are actually communicate that chipsets actually because of directly have orders to change development future so that in we our new this made existing to place lot a and more and enough partners supplier and really -- new to to the technology We adaptive for chipsets sure pre-orders our suppliers have For in with our lot a make head coming R&D support with of to the allow production. automated can chipsets different of inventory closed-loop we And us of manufacturers also we have able market

we in but believe confidence So we that can have the now. right long we be run, that these resolved, can't anything and promise

Hey, I considered for that have terms in guidance is of quarter, constraints Xiaopeng situation to shortage of gave chips we add this the described. Tim, Brian. we just the want this the

on other clear. what hand, that I shortage than given constraints, we higher constrained But still visibility So think the Without the out. is be have not will obviously, number the chip numbers. delivery very the reflect -- are

to subject changes. will it So be

on very eye close keep we a situation. the So

QX in more than Now shortage. constraints models deliver chip as of are terms to we in other face year, some terms new other components other we of components QX or this in going

LFP models vehicle are is the and we about one of adoption one quarter. supply. the For up -- ramp of LFP our using example, important take now for the Right thing some will battery sorry, of

reach demand And we level year, larger LFP Brian this for of those batteries. are our reach as will estimate mentioned. to production a mentioned in the the QX we actually components I've And was to before, included a of this able adopting And calculation market going year, comfortable adopting be all this that by we why the is that actually guidance QX, new comfortable battery. so LFP year level this expected. by of that on than is later of And also battery QX more for

you, Thank Brian. you. He Thank Mr. Great. and

next The JPMorgan. of Nick from comes line question Lai with the

hike. guess margin I impact and chip Yes. question question, regarding part It's two Mr. of Nick simple answered the the already question is first chip that management, of had supply. Brian related And He here. and price and My shortage

customers around just to on or guidance XPILOT mitigate customer can that kind X.X X.X some more price how question material regarding give -- of our the launch pay to roll X.X. XPILOT have on out do subscription on as curious margin second price raw get roughly future, ability pay the model? demand service. moment we RMBXX,XXX I'm or At the X.X XPILOT us light in model, price, such in maybe And or so material you of headwind? do you or a outlook high the the the And [indiscernible] really indication business

Dennis. Hey, this is Nick,

material. not question. first have raw due the your impact we the chip handle first to the on margin, Actually, quarter the did margin me material or in Let our

So, get not the those our help the looking quarter, to slight the in chip those due chip. to terms material raw aluminum, alternative to probably our the And some component chip also do first some we at to steel, But for example, in second we sourcing cost some margin. impact quarter. also impact -- the also and of material, are low supplier have

will -- RMBX,XXX, amount than but some than increase. impact these margin. components somewhere So to of the in around be the quarter. to margin RMBX,XXX there some less costs percentage impact terms material together, of X But is total, points two in X% the second are less The

For the but situation third be monitor, the third to quarter. in we close won't probably quarter, need the the released

second on subscription opinion, one-off a by our for the Actually, take demand me model cost part your let customer fee software in that paying of So than a more will model and service paying my or question. charge. actually

a in and you. service possibilities, timely we manner other market. where considering we also communicate update are we have forward, charge to Thank will the to Going

comes with question line Bin next Wang from Crédit Suisse. the The of

and serving is NGP. was a X.X X.X compared you. solution XPILOT, comparison to the question capability Thank the My after more XPILOT open solution to some between about [indiscernible] quality XPILOT what

actually, functionality, official XPILOT have X.X release Now, an PX we on terms when its year. launched will we later of the and in this

I solutions. right Basically, different we now, several However, can aspects. criteria evaluating on different balance and have things or for different several to comment solutions

different First look of the combination functionality. all, at have of to you

and Second you the of at cost software using -- combine the overall and the integration have their of to solution. of to you the hardware all, have look

data least, -- look third the consideration particular is good use particular at you have to consider not that or that into experience take the The have they of or to aspect scenario but usage Last solution. the you the of users that not the feedback have usage from it to of the solution. scope also a whether

cover is they're some we doing can that solutions, but certain Now solutions in all in Right aspects, across at claim the at cost. reasonable with cost to terrains roads up and superior go China very on we then or above and only that videos most coming scenario where to autonomous traffic do to in in that all high might of of just balance scenarios GP, that is technology roads certain all these market come now different China trying are go are And of can very that terms so good global right a functionality and the our customers. experience our deliver in that some scope. use to autonomous in go even a support but not is that later driving also or to aspects launching the can we of to the those and we you what want into in the we urban actually versions XPeng -- now, to to future driving

for that aspects is may, in And our if I so best achieve customers. solution order balance an the to art, these all to different

Thank you.

question Bank of next comes Lee the from The with America. of line Ming

question two My -- Okay. I questions. have

period mid is QX first regarding question upgrade. The the

earnings capacity So, you yourself, it use will the will a use your is trade? second to XX% for of version, and own the battery if you that model? be start question manufacture And to this when PX is margin do will is contract you orders margin? orders or helpful slightly battery by Or business of And your to you and will mentioned LFP your around the make of QX XX% regarding for call, time, orders. during version. Last neutral LFP you battery is the manufacturing LFP

Thank do your any on structural other you. you So combination? change after see months, regarding X

newer we second So newer regarding that autonomous upgrade because the LPS another okay, we capability by autonomous support will in the of of be the will driving. time, part GX the about also margin of level the next -- the gross version of And hope higher other do we more produce wouldn't that of next a models very if actually to definitely of any your demand first will model next terms battery able in the GX battery, to of right? the positive And or question, expectation. question second driving for impact about demand GX, than seen as battery, newer version for upgrade were our its version well own improved. it in Basically, And we've margin regarding manner.

have that for that PX, -- last So -- number, surpassed definitely and call. surpassed GX order disclosed we for was that have that in LPS LFP conference

and to we of lot demand that us general. ramp we production we QX that to order hopefully drive right confident negotiating very process can run, up. capacity In for this up And margin you. a in go the of they that of are that support battery in continue the suppliers battery, so that it their can the LFP actually up And are for now that are of so with will the long will very we Thank confident help year. demand

So, is Ming, this Brian.

on existing the battery models. demand we LFP is battery what see to add that powered additive front, the is just demand was me NCM increased our the actually Let

and number expanded NCM models we I steady actually LFP on sometimes the that's will reach will seen probably quarter. base battery third we of of batteries. the the state a in decline as our think have not volume side. we think In up, the believe see fact, reach think customer result And because of wider that of the LFP pricing. We launching the mix the ramp where also contribution And we most by capacity significant percentage given

Thank you, Brian.

I to As call the remarks. to no like company further there are turn now would over back for the closing questions,

you joining us Thank today. again once for

our the to further provided or Relations. Group Thank free feel through If TPG questions, you website contact Investor the Relations have XPeng's Investor information on contact please you.

This conference conclude call. today's

now you. may You your disconnect Thank line.