XPeng (XPEV) 23 May 222022 Q1 Earnings call transcript

Hello, ladies and gentlemen. Thank you for standing by for the First Quarter 2022 Earnings Conference Call for XPeng Inc. At this time, all participants are in a listen-only mode. After the management’s remarks, there will be a question-and-answer session. Today’s conference call is being recorded I will now turn the call over to your host, Mr. Investor the of Head Xie, Relations Company. of Alex go ahead, Alex. Please

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

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

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

discussion the U.S. forward-looking Litigation we that contain XXXX. statements continue, the of will provisions under today's made Private Act harbor of note please Reform Before Securities safe

risks involve statements and Forward-looking uncertainties. inherent

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

XXXX, of year-over-year representing first XPeng XXX% delivered XX,XXX the growth. In quarter everyone. Hi, vehicles,

reached by registration a rank exceeded We Notably, edge vehicle as the continues improve. increase of products to our monthly chips. insurance backlog our was year monthly demand by continue same our order our Meanwhile, return cover March one XX, high. makers to last of raw high demonstrating EV COVID-XX. among awareness in RMBXX,XXX our raised season From hit impact Heading across March, also order brand again the the peak into XXXX, the competitive to emerging measured as orders price level volume. robust March, to once our strong. as the products the levels. number for materials well a as despite The XX,XXX volume and we units of and China to models cost our In new new historically in in and deliveries batteries technologies' RMBXX,XXX

increase, resilient. the for demand has high-end Following mid- to the price consumer segment BEV remained

passenger vehicle Shanghai. reached in We levels Chinese Shenzhen the new expect penetration and will price. the cities insurance by orders the in COVID-XX, in over registrations, rise return in to According impacted XX% data released rate to in excluding some XX% before particular, March May, the exceeded and the our on BEV

in gain capabilities market intelligent we addition share material work ever-growing and continue. and the growth is advancement, the well to technological high-end to impact awareness I competitiveness, our product's adoption BEV market growth COVID-XX-related the strong to and mid- us position segment BEV the to trend our changed advance in of brand pursue as quality strategy. restrictions the will efforts raw industry the relentless under believe While long-term increasing our current and surges, of strong price trajectory

turn to chain supply Now management.

to components. our lockdown key policies stepped we for chain the in risk certain auto up earlier cities serious challenges chain. Given XXXX, on supply build supply and spiked infection April, led COVID-XX for have starting related resurgence, in Based preparation the in some early supply the judgment our the to our COVID-X inventory and of have chain

period, core inflation. our supply amid our capabilities. core focus challenging to position strengthening R&D our reinforce to advancing our part heightened work we such and auto shortage We and capability, of challenges competencies better on chain During ongoing the our company system cost industry-wide

track a For delivery diversify burn example, serving cost order on we The future efficiency, our have will the concentration, since the XXXX battery to optimization of This including are suppliers such in directly supply, supply in second risk industry-leading boost of we may XXXX. the diversification supplier of help persist to second established on chip the long number partnerships challenge to with longer. in accomplish which quarter battery supply location from our quarter XXXX of and the and reduce run.

platform deploy to In terms new our in-house chain and software we year. our supply develop gradually broader across of this management, since scale we to have and hardware platform such in XXXX, our for chip-related from a our expect underlying powerful started embedded systems capabilities models events R&D

in enables address semiconductor shortage such implementation us verification, developing the supply support is alternative technology platform to much chips also our containment mainly authorities of technologies the supply thanks gradually to the key based is provides chip strengthen shortage of quickly local recovering. and province capability. central of Guangzhou successful in-house chain us from control outbreaks tackle integration COVID-XX efficiently. more in researching a manufacturing pursuit infrastructure and areas for to flexible and and in enhance the cost challenges chip highly the Our It XPeng's and Guangdong, government

long-term better every Guangzhou customers. accelerate making I chip like production smart vehicle technology as as are equity. our to double smart distinctive plant serve in also since supports ability trust We would brand and highlight well investment to have technology customer that delivery to to our endeavor mid-May and loyalty build our EV at resumed our

a -- to our first than more of kilometers. NGP XX our highly end assisted Our mileage to will first And penetration It detection driving drivable plan cruise us allow quarter areas more highway perception on LIDAR-enabled ever. control In and to the These release capabilities built and the February, and function mass-produced lane we full augmented different In next for engineering better across experience. the the which NGP mass-produced first quarter, test rider-enabled by million City rate parking offers broader traffic surrounding pave is centering our system completed had LIDAR adopting participants, XX%. by base. of control in future, of the driving we way we in that the automated Guangzhou, area downtown near assist mid-May, driver-assistance driving a industry's making through scenarios driving navigating optimal the latest our more achievements customer decisions the in to first ensure available successfully complex multistory OTA advance adaptive Guangzhou. of parking of valet function. floors solution safer enables our version OTA nearly comfortable released in camera and the marking parking was industry's fusion, customers broader to In across make generation very lots, a NGP scenario

a Our smooth experience standards. high with safety driving City NGP demonstrated

fat our the customer to iteration continue the NGP through City of improve will of software. experience We

progressively we driving be NCN by machine a advanced a driving capabilities, NGP, driving the related of LCC.L there it customers' that in approval cities. of DP, CDM next-generation our with the more NGP plan assistance GX confident be we change obtained our closed of superior will proprietary peers roll Leveraging and loop City solutions performance, our VPA-L, Once terms and experience, technologies data copilot we offered our for City highway scenarios, cost generalization. believe safety, out from roads, as handling NGP fundamental will man soon stage. I'm and to to of city to maps unique along is of to launch system the bringing As high-definition capable to

the cross-domain of cockpit, full our stack broader strong product software experience Our the vision smart we smart high core architecture in-house integration configuration transitioning advanced the with systems, software existing versions powertrain value smart affordable comprehensive and innovative scale. robust system of cost. strengthen future and on ADAS, up next at our our of smart brand-new through and us us lower is and never as autonomous will integrate of autonomous full at to our chassis, of and models. to deeply and affordable capabilities more creating and company. to ultimately stack hardware provide components, much cost, simply May safety a EV electric electronic our products make is with accelerate penetration X, level make to software, greater XPILOT smart therefore, events our lifting to XPILOT our to performance full driving This developed step scenario a next-generation made hardware With On while for available our level, customers allowing will to resolved provide through develop driving customers, mid- system we to XPILOT standard economies functions our capabilities allow EV high-end driving

the advancement With our we ecosystem in new more believe business XPILOT new autonomous as Level software well adoption to our will mass models XXXX, towards as and of upcoming driving technology X emerge. monetize

pipeline. our to on Moving product

of high-voltage In March, electronic units. We the quarter, the headquarters in is flagship become model delivery benchmark in hope industry-leading makers and benchmark Chinese our is its by its We province, GX the XXX-volt quarter. of monthly Given XXX,XXX driving platform luxury progressing SUV model industry-leading first where the to the those addition the located, in followed units. The mass and powertrain in models comfort Guangzhou well. powered R&D GX electric is architecture. will officially deliveries EV fact BEV that our third to segment, volume production model. the become contained next-generation platform reach the to technologies. events among driver-assistance -- all GX well assistance X,XXX COVID plan is Meanwhile, both fourth GX a and in situation in new launch by the the is emerging exceeded PX The

medium- based other built We and new platform. blockbuster on our our large-sized In to C also XXXX, GX electric two become platform introduce is new to on One to a plan market. Class model B SUV smart the models. we in expect new the is class

our sub-segment range. to We our in to these two new presence with technology and addition strengthen the their to will leadership models, price combination In innovations expect existing RMBXXX,XXX industry-first portfolio of product in several RMBXXX,XXX the of each design. models superior feature

of on a development vehicle well design, ecosystem. addition, mainly its core drives of is is product combination According and Aero defining in the experience. new company In cities a to a share our and HT, vehicle's next-gen apply processes two-seat with more We'll XPeng manufacturing focus architecture the mobility to the modular that landing road on portfolio allow future, of models same near the can new the flying users our latest design the car our people in to conduct track where drawing flying actually experiment platform-based models GX when electronic the conditions architecture, appropriate. to models the will takeoff be from when are customers achieve flights and experience safe mobility and cetera. areas be or deliver ADAS able a on et and suburban platform, with powertrain I new PX structural may open electric in success will It for while unveiled. brand-new gross improvement and margin XXXX and believe to vertical subsequent of road, the our on from

and long-term company-level our to to goal increase above medium- gross Our is margin XX%.

and competitive XPeng's XPeng's self-operated already charging supercharging wide a better core have stations geographic the user on advantages. of experience coverage network one front, featuring become Now a

including self-operated of XXX, charging As stations. XXX self-operated XXXX, stations supercharging XXX increased stations of April XPeng to XX, charging and number destination the

presenting independent mass next-generation after brought with this kilometers a five-minute supercharging provide XXX-kilowatt environment XXX it the rate but cementing industry the challenges R&D technology segments. long-term leveraging to strong a ramp position of quarter execution and not market, our trends share. charging macro piles in leaders the charge. that are an poised and leading-edge the leadership share challenges, stay, innovation year opportunity With to is to and XPeng market opportunities are competitive those making with pace our on their technology Smart smart the clear delivery domestic EV Frankly, fourth enabling to of brands here as and accelerating edges the growing experience, is consumers' market growth disruption for high-end is continues capabilities, BEV the to mind and well gaining foray the deploy up, to range with change will mid- GX EV to superior capitalize shine, in in armed optimization reshape the the market do these incumbents fast penetration

outbreaks For chain ongoing quarter, COVID-XX of the second work and we'll negative pressures. of the overcome impact to rest hard the continue supply the to the

turn expected over discuss is are are performance With to vehicles Thank Finance, total to I'll of revenues be deliveries XXXX, and of first quarter our RMBX.X the billion XX,XXX, now everyone. and you, be of to VP expected quarter between second the For our between the of and to Dennis the XXXX. in that, XX,XXX RMBX.X the financial billion. quarter Lu Mr. call for second

hello, and He, Mr. you, everyone. Thank

Now only of for overview unless stated. I in provide our would today, RMB like financial brief I otherwise quarter to of the a first to will discussion reference XXXX. my results

high year-over-year seasonal of decrease The The by vehicle relating factors relating number XXX% expanded for for of margin attributable development of period compensation the were was Year quarter-over-quarter billion and revenues by the first costs. XX.X% an year-over-year last total of compared models for last number the an quarter-over-quarter higher for to: holiday. affected XX.X% of vehicle quarter-over-quarter. New growth. the promotional especially billion first XX.X% seasonal affected new XXX% reached quarter to quarter. quarter. attributable period to: increase were higher advertising of and of increase Our primarily Revenues New the expenses for for for vehicle XX.X% quarter-over-quarter. increased the XXXX, from margin the to same for with of XXXX of two, of Chinese and vehicle XX.X% and the a first Chinese expenses was first year-over-year staff; first RMBX.X XXX% to development deliveries marketing, and factor to mainly RMBX.X decrease a The quarter deliveries, mainly one, the increase support increase in Repo increase of mentioned XXXX, the sales quarter while of decrease to commission Gross year-over-year RMBX.X last first a less store PX sales year-over-year associated network the the decrease associated quarter-over-quarter was a due and costs year-over-year quarter and to quarter-over-quarter seasonal a and quarter and vehicle quarter sales; paid an franchise result of quarter-over-quarter. the were I decrease for decrease XX.X% to design expenses XX% one, the employee the the decrease for were to quarter. The and XXXX the number about. mainly expansion were two, XX% with holiday. The material was the were decrease the increase of the the support XXXX with our XX.X% which research and personnel associated mainly XXXX Year as billion by mainly and increase and with year-over-year billion for raw was XX.X% XXXX the XXX% PX, number of expenses RMBX due explained less sales. SG&A and from XXXX, was The relating factors R&D increase same of in and compared future expenses, of development was the of

and of RMBX.X for RMBX.X the billion result the period XXXX billion the quarter operations billion for foregoing Net the a first billion of ago a compared last from billion for with last period first quarter was XXXX with year were quarter. billion of the As the loss RMBX.X RMBX.X quarter. for same for same for RMBX.X and RMBX.X the compared loss

length earnings first our listeners long-term our of company earnings call, prepared press results. cash short-term refer quarter to of details in concludes had short-term I mindful RMBXX.X financial on of restricted will As remarks. deposits, To of more encourage be March total to This our for XX, our XXXX, release billion. the equivalents, investment cash deposits and cash, and the

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

[Operator Morgan Instructions] Your from Stanley. from first question comes Hsiao Tim

got I've two questions. So

be use future go up rate. So question, restart from XPILOT out quickly adoption like AP and but management new surely change. point supply share with model? plan. the with going makes please to first of update in the and previous will if peers the not new And I most is collection business might us the follow in? trajectory. disruption. the in recall We little to June, have Company's charging with will be to experience further mentioned about just spec features expense on standard Could kick that is changes software late zero. question want mid now And But software the contribution when strategy recent PX bit from the if bit could to orders which about users sure The to my software the fee Company XPILOT to you plan a models, for followed there's on margin PX a chain any launch prices I'm it the ecosystem challenging you resume free second the

for diversified quarter. enough inventory As for May? in orders chain. low-price climbing have costs would battery both can supply battery more our delivered in component likely we Or compete leverage second the April and be Do you battery the the to low-cost

questions. So my those are two

we results. Very So rate makers penetration terms top in the rate pricing as good ADAS as speaking, technology for all thank EV in emerging best on of our you. well software, our that of believe amongst of adoption doing -- China, I terms question. are our the as in well as the of final Currently our

combined actually with usage or rather or separately. together of software than adoption that the doing better package the a the to combines the hardware of we a is rather, a the separate you is for the hardware the or consumers, did customers However, the charging notice well as active in market, the trend software the it do if it charging bulk which that from

future the hardware carpet, software in really the are this the both very be software the upgrades upgrading technology we upgrade integrated higher more a software call our So co-driving integration application. internally with software application, in in move We of It the model, terms of And beneficial in time. actually machine of ADAS smart mid should can level the increase model software products, when adoption to and together, believe we -- level the the as smart we a enhance our chassis hardware future, near we very we the and OTA hardware. combine do if able experience would able overall our be performance. for well. we are well the the so experience, towards Right as of pricing our the technologies, integrated which at ADAS performance well that in kind this with can that of point pricing experience of the of future, man for to for lot that for as gross of believe and now, overall kind I beneficial margin as the both overall technology company overall the combined ADAS for as of do user

And adoption model will on our we in so or capitalization the software emerge integrated as the we pricing long run. data based of the the hardware sustainable that to and experience will on that for beneficial together. of believe And the of hardware believe both based software monetization more for and be and usage we accumulate user this more continue future, more launch kind together more software and

customers Overall or the experience. or used For further optimize run more the the or pricing mileage actually believe allows software use of time that our different model time user in long with our us services. we to example, our on our our monetization kind be that and consumers there of be based sustainable this are or on the speaking, can products beneficial will spent that based that kinds spent on integrated

Brian. is this Tim,

Let me comments. add of a just couple

various various monetization we all, the witnessing of China. by implemented have software has First companies been in been

is the that not to various the charging is stage the think believe penetration that coverage optimal probably the increasing I far, focus clear before ways, an penetration of core broader utilization our We so make and of widely used monetization technologies. provide the prevalent quite been that is that separate this some stickiness has has very service be our priority think, also market, subscription-based of sure in market. technology at the that and these first limited And can strategies. we we of witnessing In the and implement it the I actually package models China different

much think dependence see we adopting more So that's why Chinese current and are broader Dennis of over main we'll variations for the utilization technology, we long sure and standardized also model. the to technology, actually run, in this the stickiness hand can see I think we I second when advanced question. the I'm charging market. be and monetization more to And have able robust I'll for use that But

be sometime the new June. until deliver maybe second previous June. looking low orders in this in of COVID Dennis. mentioned we the able especially June, will now call, earnings are in the most Because Tim, the we half is Yes, to we impact, the protected Shanghai in probably the of area, price orders price deliver to

starting new late the So of the and most of June the July. in in be or starting some delivery. assessment probably price present will delivered That's very

you. Thank

next Lai question Nick comes from JPMorgan. from Your

My questions. simple two

guiding somewhere possible on supply? latest recovered And the that third battery First in is it about second is this roughly month. monthly into update the mechanism production. production to that have XX,XXX And per we supplier? XX% XQ? Thank about can on units second potentially XX,XXX really of that rest mean quarter production loss the you. production be quarter pricing and supply question loss units translates to Does XX,XXX of on with XX,XXX chip is Measuring and

Brian. it's Nick,

me your question. answer first Let

all, of correct. First you're

June as Our chain, as quarterly bottleneck reflects and the likely in the for a which well. this as in quarter supply impacted guidance has been May well in April delivery

a up the ramp time. with a we capacity to if full still constraints. the up a the this even chain have that capacity the normally, third output production obviously It's have cannot quarter that reflected envision to at capacity. because factory able running volume by the full with We chain the that catch limited is we supply at sufficient the supply So, resumes be number actually of in we'll

I some So we're other that to be that is seeing we're able produce and in think area the to meet Shanghai enough area the very customer as soon and to we'll normally, confident accelerate as which impact demand, the delivery resumes output robust.

just address me let regarding chips yes, the the question So visibility.

COVID every the and I will some some is unit So also cheapest our the shortage of in our for comes I dozen was very, or the will is in just of the majority capacity ones, peers EV part need of okay. and China actually China actually kinds of think resurgence chips their According to some And and new main latest now, five in of as But April, their the three actually very chips, average China main capacity to quite calculation, say of in is visibility of single example, ships right would is right this I the car. very or every of the require the the restricted well if single of performing the supplier well. supply the or chips the about regard. capacity chips limited any parts terms actually main in of limited. the kinds be The and from actually chips product for of of actually, of their capacity smallest was all And car an in dozens will or the general. chips. the for that there for now ours one a by X,XXX several makers okay

our going I and in that very while. a the to in China, going is very, believe to on limited is mean, still for visibility impact last capacity forward general how its chips However, also

going And of while now latest mean that we the of XXXX crisis least judgment the the we a alleviated for going is in or longer. while, situation I last notice at XXXX ahead crisis from XXXX. still is end is crisis thought to or -- that into maybe even by be But our on, by the to Now shortage can extent resolved supplies XXXX, some in chip general. to begin to

the previous resolutions Now need we supply teams in strong chip have there in mentioned adapting long-term very signing remarks, contracts to platform really, that are with them. several that allow I our in shortage the of building be other flexible example, there, capability for very, my as suppler build very be one And can is a of that capable embedded technological chips. to to architecture our very

the we of -- in we or example, able of platform according For can for our parts to, should some be flexibly product, shortage some example, to adapt we the can part change and the of to chips and then in different earlier, of chips. I the terms quite supply actually the units. of did okay we in as And different mentioned April, parts of visibility the

And and it we terms our future only affects into have one in week's the chip capacity. visibility sometimes of our how

the say I not would is at overall, you. So situation positive still Thank very the moment. All right.

of your the capacity to question and battery supplies. Let the with pricing the of half second me regards address

continue half think, of better. of greatly supply year, actually of our last terms all a increases those last from way of overseas first that kind of the XXXX, notice lithium of was energy that on And And of resurgence because way will of price mainly increase or in XXXX, is in making pricing overall supply to the since in increase the much reduce first become well, from the the market, batteries, of raw to the but from COVID situation but well of situation new the think of are China can QX restrained price battery we just -- I which a battery XXXX. is remained resulted the lot quarter for the due will of noticed raw the on. XXXX year and also month from situation speaking, supply industry issues lithium in a the lot to materials, quarter of think our overall, ourselves, hard. deliveries begin as materials pricing in as and capacity into materials. battery back situation increase to our the the there of XXXX, terms in as very this the all overall of of to the production. as then I in the second that year we From current Now price half lithium And this batteries increase I from the remains domestically not so in first not begin in we the result believe lot slightly well -- to whole material that But the

resulted be our Now mean on, of And we of batteries, thing of QX be the believe optimization the our a or our quarter second some from suppliers should we progress half products really to resolving batteries, in supplied see beneficial I of of this, lot second which battery from for in suppliers of the able from as of we And quarters. cost that supply able are that multiple to the regard. actually can because we this issues can we second batteries XXXX, to some of do we multi for would like some cost better adjustment adopt optimization begin well. is -- previous with see

adoption. our our product reducing weight wind overall from optimization reduce -- low as reduce benefiting expand in the our as technology that level of previous resistance, in confident high will from probably very reducing battery the materials in continue years; we But to well charging not be current the the saw I as midterm, pricing that of run our we investment us XXXX year. they however, higher half batteries of won't in as supply the think overall able to with to to technology in can utilizing probably adopting some actually to level. are second the the supercharging actually half in the going long into SIC us the products I and we we well of second continue be production as And efficiency benefiting believe enough customers able that to products serve of to just of boost our from this multiple can allow mentioned. factors to our continue of batteries on, of the should ourselves benefit as from the the new Also

you. Thank

Wang from comes question from next Suisse. Your Bin Credit

third large because year quarter quarter gross to And quarter assume high half about factors only margin when number My in second the compared margin? in as in three see be to in products pricing software second question or second can gross products second new the pricing. products, outlook kick the is And we Inventories can the low different will and quarter? the out the That's number as XXXX. high in half in, impact size the recently mentioned, the about margin the the one part, second third and maybe question. decline this is margin this start some you help. there gross the products quarter of the you margin can products second reach quarter, large first changed higher-priced quarter a the of the What's

guiding Was margin the gross so the And pricing are can in because margin what's the XX% or you our range? target margin midterm? XX% above XXXX

Wang Bin, Dennis. this is

address me question. COVID the Because our right. with projection. volume original impacted Let impact, quarter second your first of our was compared Yes, you're

well. will gross be margin quarter as So, impacted our second

price impact recover the the going new second in investigate to further And we deliver margin will and yes, quarter. orders. third to also the action the quarter, take will We some

third will our in the rebound quarter will improve. So margin

the However, improvement we have are further when will to model margin seeing delivery four new the we we had quarter market. -- in

So, And our present delivery further third the the improve. be and slightly will quarter quarter our first new will price will margin improve impacted by the in -- then That's second projection. order. quarter

Yes. -- question And answer me Bin, your to Bin, second let finish.

include a question. including coming current to we products the second will we're your be will portfolio C have, to premium Yes, the platform, a that introduce a of at answer which from products going to the GX. that year, Just product next Class

even high So we expect close will range. it hope a RMBXXX,XXX certainly will price that the for And can exceeding such product to have gross or that you be margin.

So, XX% product, actually I think, product or our important reasonable. to margin above will benchmark be very a for us for that XX% product assuming design. is But target

more And superior products for PXs two overall performance combined. that also speaking, than the expectation internally two combined be our actually new capability or is these will their

as the rebound Right we well of would of material second be we're robust now, quarter prices from visibility giving environment. say, But hopeful overall not as the, are that the given pretty will guidance, lack I levels. the

you. Thank

Bank. from question Jeff comes Citi from next Your Chung

you in two margins second if apple-to-apple Could one. order tell separately, for And material three This the margin due the Number margins. And rolling the the software? about strip Xst should us you I you be sold us tell raw questions. quarter first the the on since software first the Could the number been? quarter price quarter what from first backlog valued without backlog? the off to generated quarter margin? also have an the is vehicle have May. is many One be we quarter, is question Okay. volume trend would the the generated And how could break price hike, order final the is vehicle the hike? MSRP the comparison, newly first of will backlog down vehicle at on newly

this Jeff, Brian. is So

is number Let new Dennis. question me leave and I'll answer order then which first, to your the the trend, second question

the relaxation we a First of -- the quite already robust. as actually two. we over which obviously, order build certain month hand probably we said actually to other May saw But in was we nicely. think recovery pre-price measures COVID on that's in by we sign in CEO quite markets are demand levels, saw the to see up actually us is little all, demand I in affected order would demand it's overall that slow actually, encouraging in is over it Dennis to target, obviously, large level in also, cities the which not that our saw I'll month the order is pool, increasing areas strong. pretty order a Then April, a near is rebounding recovery. of will that lockdown of presentation momentum COVID important because It May, bit we markets the And increase very be that And genuine. us, see took new

-- for precise And the to new price time majority be We because protected. the deliveries. we orders. order be June price need the me would price the the oil very were and Yes. deliveries, don't oil address PX in is some price first would example, Jeff, in those May price deliver backlog PX. question. your the But old let -- deliveries for order Major provide April, the the protection also especially of majority

question, yes, can one, we why have improvement. third reason gross quarter quarter, because, we maintain level first your the as four the same margin the For last was number mix year

mix was last the about first product XX%. Our in the XX%; product line mix in four about year, quarter PX, quarter it -- was the

marketing the the reduction, one So factors. reduced our level compared increase Having will margin. Number about variable is improvement. The which reduction. also two one XX% with new the is we NAV variable to next technically in that's mix XX% We vehicle that, rationalization. XXXX. impact a the And overall energy about the spending marketing is said key subsidy by

big number, -- cost. The other offset the one, would big mix the is of our variable detailed battery chunk be improvement a I like cannot reduction. the marketing but the that also provide a and

So all, four quarter able moment. were the margin to we all the for maintain in level

you. Thank

of from from comes Bank question Ming Lee America. next Your

software. autonomous So regarding driving your

basis? included one-off future, meantime, give the also a the a the charge in panel monthly charging to a will standard because in the also, charging time, will software the in for free this pile. configure. on you and also price some consumer software So or the you consider the you of still installment installing And be or tend car sales But subsidy

technology? business? voltage and supercharging charging further margin second so in future, the event is technology? expect nature Or the And also do regarding your is XXX you technology, a pile ultimate battery technology, the charging battery, hour So even it advanced XXX-kilowatt the for charging question,

Yes, supercharging, those and at the and bit time, software also we home the some supercharging Let together the time, me build And the the installation. question. the adjust also charge when of same the kind the and of to at first free price into address your vehicle we with destination price a we cover same charger the costs. the including little the get

the R&D with And to using margin we software, would dilute more overall, customer will of impact scale neutral. and expense. same be able also more to importantly, kind be the increase So the

that's a strategy for overall, good So us.

subject really to the of product, terms the or internal and we continue will discussion decided yet next practice. haven't whether further also In we future GX product, such

that another we And to discussion. arrangement we that. also internal So is introduce subject we will will mention a have product, our when

second your question. Now

All right.

of by launch by the that One planned for is to fourth experience. facility the launch this minutes of before we quarter. facilitation. actually XXX yours. launching kilowatt, me XXX-kilowatt year, Let XXX. driving five other XXX QX into the had to make kilowatts address decision have macro charging made second of Actually, of question that year, the two And plan of this or charging we charging originally, environment heading after kilometers allows year evaluating the kind lasts is this the we for But XXX this XXXX, final for

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conclude ready to Operator, we this are call.

you. to closing for Thank the Q&A session. to over I remarks. now includes turn the back like would And management the this call

joining us once today. you Thank again for

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

And Thank today's conference you. this concludes call.

may You lines. your now disconnect