XPeng (XPEV) 30 Nov 222022 Q3 Earnings call transcript

Hello, ladies and gentlemen. Thank you for standing by for the Third Quarter 2022 Earnings Conference Call for XPeng, Inc. [Operator Instructions] Today’s conference call is being recorded. I will now turn the call over to your host, Mr. Alex Xie, Head of Investor Relations of the company. Alex. ahead, go Please

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

and results financial today Our operating and services our available earlier Newswire online. were issued by

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

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

inherent involve risks uncertainties. statements Forward-looking and

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

XXXX, a and XXXX organizational quarters is vehicles, strategic to He players are In restructure. pursuing of growth XPeng quarter marathon. strong well-rounded configurations Xiaopeng. believe in run. competitiveness we our and only deliveries Frankly, with recently three an a our in-depth In delivered and capabilities XX,XXX competition XX,XXX the our improving implemented eventually The through and Cumulative I core vehicles, representing hardware hardware needs. of very for year-over-year. the attractiveness technologies, smart of year-over-year to boost to incorporate ability period voices similar EVs customers’ a while increase electric a totaled third the long electric first from XX%. of in enhance everyone. To software product that am long-term both software will we Hi, conducted monetize goals. the and review will response, challenging products simplify XX% we going I win cells, and in

and would market branding, As to electrification value the capabilities. great suggestions these areas for take service in regarding thank for to I our and our intensifies, enhance sales customers to and their we competition will sincerely smart shareholders and highlight further sharpen technologies also opportunity marketing our this industry-leading like improvement. our valuable

a more of our ensure development EVs Within process, will am the will in XXXX. new goal organizational review, making operation be My business to recent focus structure, efficient. and planning I reflected on convinced and R&D. change concentrated entire product the XPeng’s our strategy, of I product sales half R&D, organizational upgrades, design, drive and values In will accelerate second that including customer smart the adoption strategic more in and service holistically is

our preferences vehicles approach strive to At and cost improve and to R&D that while platform-based our XPeng our enhance well smart center costs help through affiliates, for are technologies R&D our to our autonomous efficiency and Robotics expenses the the will satisfaction. as funds XPeng time, of reduce to well needs and of powertrain products’ profitability and these same of technologies. as and both the and equipped cockpit of will and operate customers’ BOM competitiveness consistently Besides, our our customers raised customer recently development the Aero We will smart to are unwaveringly ecosystem now invest the innovation our ensuring and at HT technologies have reduce the in research driving independently.

will be on time I ecosystem As my a of our affiliates less spending operations. result, much

[indiscernible] as more on Executive an of focus of to Mr. resign Co-Founder, will Our Directors products. Director the Board

brand platforms our targeted a are demographics, for and of F mass our platform, foundation way to on product our form with strengthened our powerful awareness and our and to in and our platform increase the more R&D efficiency, improve products. upgrades fully with a of customer decisions a a restructuring brand third-generation the in in across and powerful affect established expected platforms purchase key paving platform range both XPeng the dedicated platforms to chain iterations. we focus consumers’ invested powertrain, H we broad of the be management. expect most addressing produced EV Leveraging in EV our team line through cost believe channels In past In enhance that measures next supply will three addition, and over years, and few succeed marketing more Together, E sought-after team we I these support our have solid year. content, are which factors architecture our and control mission, advanced including technology

possible. be electronic chassis and developing Our core and including as architecture much powertrain our technologies, we assistance system, multiple driver as are advanced will vehicles shared across systems, electrical

the result, new time each software product be be the while required expenditure more cycle reduced, vehicle for will hardware will R&D As quality and and a stable.

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electrification. are All will monthly believe volume and battery a in reputation segment of GX SUV high-voltage number the range. The drive as sales in of of is closer our and all the volume we next XXX-volt in year, the product also excellent It’s up, recognition outstanding not EV one to that out and has new but first but which to will beginning only brought the will ramp outperforms launch the near-term future marked restrictions platform challenges by year COVID-related pull priced smart our RMBXXX,XXX GXs electric technology, vehicle of continue soon it that increasing charging not equipped the sales market competitiveness. above Such sales up rank also driving popularized ramp brand Moreover, the capabilities top strengthen of models a China we enables models, leadership we market. GX’s with GX’s other We confident speed in an three will quarter also in we production three recognition. in enhance October. among draw overseas. only Despite XPeng’s are trial in successfully terms next experienced further

improvement to marketing consistent our successful. in product expect subsequent capabilities make launches our also We

significant continue differentiation average confident are technology ADAS in a full-scenario we of products, that our technologies, we will next-generation rollout sales price, As to with achieve volume new we progress and selling and gaining increase the have this technology. that mass we the coupled products revenue market the average year, exceeds third in XXXX a of share. significant made in growth industry of increasing Since driving production autonomous our quarter and

safety consumers’ scenarios, cultivating trust our which urban scenarios, to purchase the highway a pilot are much lower PX than ADAS product and driving at September best-in-class experience software. with NGP in Guangzhou. program the cost. our we On significantly more debut traffic XPeng’s delivering in took continue and We lead best-in-class hardware willingness in In XX, complex City driver

We a release In are full-scenario of the its represent plan XNGP driver release development next-generation to XXXX. of an accelerating high-frequency usage. several becomes must-have will assistance product inflection quarter the to functions point of product, cities where software, my driver dozen view, with third XNGP major and smart in the upcoming advanced assistance our

the become a rollout. have orders for of next significantly XNGP max to October by proportion are year obtaining XNGP’s the lower on models. qualify version features costs Connected that tests in confident are pleased technology will also and that XPeng nationwide. to more than the Driven as for We China’s ahead Test of rapidly look GX widespread adoption Vehicle will XPeng first advances cost GX competitive high autonomous Intelligent be believe unmodified competitiveness, of XX, OTA product Road gain we XNGP to vehicle our our our making permit forward roads. hardware are We the of the and current strong brand that cost Furthermore, reduced our peers. public the mass-produced that we XNGP see GX to Guangzhou On awareness enabling driving XNGP’s opportunity

vehicles. a the the development a and complementary with to mass-produced to driver data plan With first alongside we assistance of closed-loop iterations, parallel driving capabilities in system, realize our robotaxi and effective XNGP approach advanced cost software autonomous be

electrification our we technologies for as developed, commercial proposition value enterprise. industry value smart customers our the we technologies well bring into our strive as and believe bring that to technologies in to leading commercialization, in-house As our firmly our

strategic for cooperation are and technology We collaborations opportunities open globally. to

to amounts RMBXX billion. cash Regarding cash our over liquidity, current

CapEx our R&D are cash investment XXXX. We improve flow a and Therefore, organizational Building portfolio different years. substantially improve will R&D our couple just confident efficiency. increasingly RMBXX production few our with over and importance quarters that prosperity. can our sales streamline over automakers efficiency our A thanks technology restructuring decrease adversity projects. will in significantly aware our have across vehicle plan years models, we in the to vehicle the position at business help will to future not also and cost product will become sales be Furthermore, the of implement of on rollout improve support internal focused to steady our and our platforms cash grow. needs we product billion for cost. in products maintain compared will next we and to capabilities, operational our control as in years the initiatives our growth investment and few early next next coming that more strategy stronger Also, growth lower applied prudent of significantly Therefore,

the restrictions to in will adjustments development. internal ahead focus COVID-related fourth the and long-term medium our of making quarter, for and on we Looking mitigating China impact

are deliveries estimated of least units GX production November Our to impact mainly the the X,XXX due to at ramp reach up.

our December, deliveries will significantly rebound order best trying our are deliveries of to backlog. our In expedite We month-over-month.

quarter to a XX,XXX vehicles revenue RMBX.X the expect in generate of to XX,XXX We between and deliver total billion to XXXX fourth billion. RMBX.X of

adjustments quarters. and organizational internal management upgrades accelerate coming We in will the

We’re confident Mr. the to the of for that medium our With everyone. we now VP of over vehicle Finance, that, financial will quarter XXXX. Thank you Dennis the players in top smart in long-term. among performance the third industry turn the rank our discuss to to Lu, I’ll call

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

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

last The vehicle of the were of total attributable a the to the margin XX.X% XX.X% same and period for and XX.X% operating expenses third expenses expansion goals. quarter increase decrease reached an associated for of third of XX.X% mainly mainly year-over-year to from of lower billion were an increase XXXX, development XX.X% primarily for for deliveries was of quarter decrease of last XXXX to period higher of Gross and Our our XXXX, and compensation year-over-year mainly the And attributable decrease was third of third R&D increase higher an of compared quarter-over-quarter. XX.X% the XXXX, with the personnel product sales an of XXXX and due sales and staff. X.X% quarter XX.X% for support year-over-year and the vehicle Revenues due quarter-over-quarter and RMBX.X quarter. X.X% future in XX.X% mainly quarter. XXXX increase was development increase to increase vehicle employee year-over-year RMBX.X the of year-over-year a third to was to quarter-over-quarter. quarter-over-quarter GXi. revenues quarter. The last vehicle of expenses. margin The were mainly our the was third a with year-over-year increase PX SG&A mix of of The with was X.X% increase for mainly decrease billion of quarter for quarter to the of increase while result decrease the X.X% associated XX.X% the year-over-year was and the for network increase of from for attributable costs. a research XX.X% same were an RMBX.X new changes. compared as quarter-over-quarter XXXX due Vehicle increase for was quarter-over-quarter. RMBX.X deliveries, quarter billion billion the XXXX, The the lower expanded for quarter-over-quarter

of with for quarter difference of billion foregoing was RMBX.X RMBX.X with primary same the same RMBX.X resulting from the for from appreciation billion loss quarter. assets. billion XXXX billion compared net foreign period gain billion third and the last of last the for the result the XXXX ago loss billion RMBX.X the RMBX.X period RMBX.X the quarter and year RMBX.X loss the was loss quarter. period of was As operations RMBX.X quarter. for Comprehensive and billion last a billion loss the for for was year Net third quarter billion dollar-denominated compared U.S. rapid with third The between the currency and compared same a comprehensive RMBX.X for ago for translation for

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

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

Morgan of Stanley. ahead. go a [Operator you. from with Please Tim line first Thank Hsiao have We question the Instructions]

to adjusted have PX assuming organizational this So challenges, volume for supply-demand how is Thank next question the fast the done has from the ease we the first also profitability separately, vehicle as translate this to over restriction meaningful curbs. month have translation of about in my this of in So into the because the into the is XXXX? XX,XXX my recovery could rest month, our year could COVID modern per COVID months, impact time? likely been deliveries due target GX And due restructuring, first new question. deliveries the more to slow or correlated adjustment hardly you. upcoming and a current company’s but XPeng the is series

Alright.

First of for all, thank question. you your

adjustment time. the mid goals, Regarding I well, changes of of is currently, the the just that is historic a XPeng for – reviewed do And lot conducting long-term over not cases how for organization manufacturers short-term. to

your be At can quarters. are into expanded. more further will So our same the we patience. share we coming be confident XXXX, the very in And for ask translated sales time, that see we significant several in to performance changes market our

price that SUV’s monthly confident segment, the be among battery are can in the reaching still three if ranked in be in above we can maintain short-term, and December, players our GX, under for can goal of the we original electric XX,XXX well can RMBXXX,XXX. Now pandemic confident the sales control, very top are of we we we that

be in improvements competitiveness coming and improved time, the history. their roll-out can GX’s further the Now developed to function, sales further PX’s same with be further volume XNGP PX’s are also our stage compared further enhanced that with performance in developmental exceed well. sales our the to technological At the XXXX, the – of performance alongside we with same actually believe as enhanced the year will in be will

our that portfolio. further mid-XXXX, our that are in be definitely this actually will product Thank midsized And the RMBXXX,XXX, volume model believe a Now exceed you. to new we sales product sales. particular price will boost and launch to SUV a expect current we help product will which or new of a to RMBXXX,XXX us B-class model that between

XX,XXX, overall to the want mentioned clarification. a just GX, will December We delivery for that reach overall make not Just the delivery December.

Just clarification. make want that to

balance of my the strong any there our position that next But cash cash be the on financial sheet second backdrop, and statement. That’s The expense is question. on turn quarter. about light concerned macro Is the a investors cash borrowing changes cash question the potential about still So will expense pretty Thank supplier also latest deteriorate or based our are separately, payment second year flow. increasingly new flow? challenging company my in to flow. short-term In latest burn we more any increased substantially reason specific And kind operating What of the modern based may statement, cash to expect there in year? investment should surge you. next financial has that?

Brian. it’s Tim, Hey,

question. your address me Let

any First suppliers, don’t change. of we our see all, the for payment terms material

for We’re maintaining partners. is a than we change then CapEx CapEx and actually then less you be than first due year. RMBX see the a at quarters the the And lower also in we actually outflow, in of anticipated if favorable cash RMBX.X our to this suppliers and to actually And And terms pretty year entire we three billion. the to look than payment operating XXXX, factors. looking with earlier – billion XXXX then actually number foresee what significant less cash reduction a and

earlier Xiaopeng don’t all, out, much of so incur need to First mentioned as completed build we that. capacity our actually significant we CapEx that pretty for

We of the new platforms also these the new car also launches. completed have product construction for

already of incurred lot has CapEx a already. So these been

So doing line significantly that lower, billion CapEx our below RMBX estimate in with will year. SG& to we we for also we going next the see structural the or XXXX will expenses we organizational due compared that the expenses And also actually that changes down also mentioned. R&D growth of line to A focus some the projects, our R&D us next for think reduction. next streaming year we year, see in actually current in in line be think are And and

with very have we very improve projected next compared plan year hand, adequate we current anticipate cash actually us cash this on carries also significantly to see flow that sometime in outflow business positive we we’re free can resources XXXX. our year. to meet our cash And overall, our confident that and to also So flow

Hey, in Tim, right the third then this point supplement are of regarding of have lines lines draw your management short-term borrowing Yes, quarter. is banks. some with of short-term increased the one relationship considerable credit variety for the strengthen we we is Dennis. credit I on because question just have tactically a borrowing. And down to part established The want you the to the reason basically the with kind money banks. our we

So slight September. at of the in that’s end increase you why short-term borrowing the a see

you for Brian. Dennis much very Thank and Great. Language] sharing [Foreign

this mentioned like Brian compared clarify, expenses, Hi, is of a as you. I revenues percentage just when Alex. SG&A means to it percentage as with decrease the of in of Thank revenues in XXXX. like a XXXX

Okay, thank you.

Thank you.

We with next the Please Ming-Hsun Lee question America. from of Bank have ahead. line of go

My trend on that your between question guidance the the revenue XQ in the ASP guidance. is based and volume difference also

that, So plan into a could in to us this? looking to color Thank margin? the besides what’s give you component gross control And costs you. as well order your XXXX, on the more as costs your maintain battery

is Ming, this Dennis.

yes, right, quarter, your ASP compared also increased with the quarter the primarily two, our question in mixed ASP, improved Regarding margin. the third better mentioned – the on due you’re primarily PX to

For the – lower. be the PX terms will of PX in mix quarter four,

maintain the we the PX of However, so to and will mass XX%. GX, about the be XX% mix maybe because at together able the GX delivery of to

GX. the ASP PX and terms have actually marketing three, compared quarter spending increase some offsetting on will of in the – we So we should with slight variable

the first question. So answer to that’s your

In terms increase. material of cost

So of the in we opportunities reduction a believe we cost would, second to terms far, that terms battery the first in supply, the big the of quarter. And are translate due cost supply. more maybe the But in for return, into next mainly seen year, the for battery in half. we seeing changes haven’t

the to that, subsidy will So NEV margin, or improvement help with improve to cost the our maintain offsetting discontinuation.

Yes.

a I just the the product, of to due the face pressure versus also also quarter, given of will and will think this, gross some Ming, add elimination, new some profit the launching to to challenge present profit. and for the gross models, subsidy fourth the So which lower-priced our contraction third GX, the quarter, volume also then so our first quarter that impacts

is and opportunities However, that we in rest gross the with year. later in will volume anticipate scale, view next some improve in and of half the trend our of year think rebounding significantly the profit with for decline starting also, also the show in the the moderate year, quarter the later battery second prices I and

you, Thank have and Okay. Brian no questions. Dennis. I

Thank you.

JPMorgan. the have question We ahead. next line with from Please Lai of Nick go

me let my translate firstly. Now question

mentioned can on and campaign? strategy lot going that change going regarding including marketing terms elaborate and Chairman when to and And management, what more can are expect underlying a having the you are branding those Now – of just branding you team what demand marketing to change in an volume? of changes or impact strategy we

Thank Nick, question. for Alright. you, your

conducting or midst this focus marketing. the on We’re actually adjustment doing of branding organizational our in with and

balance branding, spending to I sales actually plan back, branding focus past, products, aspects innovative we the our our to in the boosting future, increasing mean mainly sales, with reduce going focused Looking are measures, and spending the sales we boost going marketing of on marketing more while our the with in different into and marketing. sales in to but our of on and sales and our

the adjustment organization to from boost to efficient launch effectiveness we well achieve measures to our industries well to as aim our plan as organization we – in satisfaction higher make challenges expect to second series and different align as a plan is order the sales rate, and effective. to portfolio And efficiency tackle and customer while order regarding the as of customer we demand. talent in it our different high-quality product that adjusting marketing recruit order boost that very we is integrate Now, to to our more thing to in

you. achieve to points. allow in talking long-term me add but will several coming organizational long key these we that run, we we about in for are just order strategy mid the the to believe our in Thank such months, Now, changes goal. continue And our XX to near-term adjustment

thing positioning that is have one clearer and the brands we is for aiming that the of our second And are will game. products. long a we first The

for are the the to we And last the are We more point And being sales that we our doing you. a the the and going is short-term. customer-oriented not rather passive more campaigns like and just will that and focused. rather past. be proactive is aggressive and in this remain marketing in third very than fourth point Thank

mentioned My other driving is autonomous And we a more really on? you NGP we solutions work And how and the to little also terms looking so more you. different for as at of second and management with that opportunity question XNGP about in from potential can solution. Thank we are other explain potential give bit well? partners LI on can and bit [ph] Audi product, are a that

of From of part experience, our adoption all, of me are question. address ADAS four your key user first components allow to to nowadays. the the own there First technology

The or support. first one is scenario scenario coverage

in about to XX% cost, use data, took people’s up of Now, only much and on and people are that people’s willing and that be be we to the software noticed component technology cost is are their And use are or of future, affording of able to the is the pay the And to of ADAS will for XX% of highway in And reduced ADAS to to contribute daily roads. ADAS the city how the of XX% is actually our you your third parking from the component cost. customers. adoption second current fourth confident terms actually the XX% the of is we value our scenario, safety, that true able to component technology. advanced XNGP the related

actually XX% of by to we roads because highways XX% to function, are city-based usage or scenarios. the on for our out Now able and we XNGP, parking Xx city coverage happen the roll expanding compared scenario scenario are over where happens on only

are well. definition and confident of is are high-definition driven launched in or the that we that terms be people rollout on, safe in have lot is don’t a experienced you in to we of actually don’t or that, challenges, user to a actually very from that high-definition higher will even and will etcetera, customer performance where as those based to experience the road just of you. available. and of excited past, think and car by target. our why high here, definition satisfaction. high without technology, XNGP, and a passenger sense, maps we and Thank driver in city and reason areas with we seamless especially rollout available pose is high-definition the high integration why a don’t caused produce mainly of functionality be XNGP, you laser-based – is sharp when mapping experience definition use scenario-based are very – a kind that example, a a why achieve that – a are Now, sharp safety scenario a to of consistent in where we maps or full true in for a easy That’s like that people difference we goal rely and driving our very in maps true mapping without have customers difference with able XNGP functionality the consistent support efficient when our switching XNGP, that terms the will able the we maps. areas of provide final very experience our an such have And city that allow our so And with our And areas that allows laser-related

to other addition embedded in think a your collaboration have think And question to resources we of second be that market-leading sales, actually, and in spent I Nick, in there these from think regarding openness and to recognition we lot And terms that potentially. ways the develop value effort Yes. is I in technologies. cooperation, technologies of answer the monetized tremendous can increase it’s all generated our

tremendous saw in also such interest technologies. We

We have driving and smart smart and platform, leading in autonomy, electrification technology in cockpit, in in etcetera. high-voltage then

potential partners’ that think make I actually we on. more resources penetrate could valuable markets scalable also leveraging to become it have ability focus scenarios these technologies, think currently doesn’t or quickly and So, we – I to if using

think our scale, help So, competitive number to reach opportunities sort I more attractive products a producing focus technology with we think are hopefully the I of these that potential to make that, on us evaluating at openness, and without ourselves. time compromising our of same

there is to when this is Obviously, available. progresses update if more I happy attitude. it’s an specific am So,

Thank you.

the from Bin Please Suisse. We Wang Credit ahead. with have go next question line of

backlog COVID Hi. delivery GX, because Thank in already is Number order backlog backlog, China new has you. your basically first XX,XXX November? impact My auto the and what’s question order two more should for parts. secured? flow for accumulate Second, the order about be than one, what’s

Bin, it’s Brian. Hey

First see can a model extended that backlog or orders as a that few One don’t that been have I we one in first at disclose quarter, are that to our you. number a that’s that the delivering of timetable we number backlogs. want out of there particular – in to shows be so significant GX, now has indication. also our of later and point all, things any strong the December delivery hand, will But you to company as times tried is on you

the the the and our not with SUV battery momentum, we become price, one that of see. demand RMBXXX,XXX is an also models top confident electric sales that if top that also we of two Secondly we GX over see of are indication that’s level three,

can China they check time. you official to show because change to online according because on GX some I deliver up try go model might this want we actually, waiting Actually, time. whether know am your to book I actually, to backlog, website, if your just test the I show actually when website, expecting the the order to want

sometimes weeks actually us changing time backlog. four is one the Sometimes according it to weeks, auto XX demand week waiting was it’s to indicating

whether your I according backlog waiting GX know to order just is to real-time So, you. want changing Thank in time your website base? on

capabilities. Bin, Yes. you correlated production demand time is the The ramp-up also I are real-time think wait right. to our and

So, timetable. see what various delivery the models store real-time in you reflects retail the

Thank Okay. you.

you. Thank

of have Securities. We ahead. the [indiscernible] go with next line question CITIC from Please

that’s how the do do to I we demand? first customers’ how you. will about question. find our And be is demand-oriented? will we the secondly, terms And my them? of And is structure? question. what what question is my Yes, one my Thank And in real specifically, translate

Thank for question. Alright. your you

behind Now, our logics especially auto-making, of two basic there are industry for the OEMs.

to links strengths also adopt weakest well. identify bucket, theory identify you to first means of is your one which The your the and have as that

of past example, improve in have weak think just years, quality and Now, their quality, lot of, well. and doing for also a several identify I control service but in safety, terms also product cost been ourselves, as not the their best actually our to links peers

doing our also are We best.

as design and the further We our space perfect striving well as products, our smart – service as interior are cockpit as of well quality as well. other design to our design

I So, as talking in strengths well. goal key the long-term, short-term about one long-term as really competitive is goal, of identify am as your to the well the

as goal your target sure focus, that to customer for behind have second auto-making whether the original portfolio customer you the make industry your logic targeted You current or And understand well. define our as the the short-term is long well you as or aim run. your to

our the long want to we the is well, build years that X-year further have global and past to I the run, as regarding And be we why to X I in regards a the identified has based And able years, on Now, really scale coming as future or to made specific in lineup apologize future. years, in the today, ourselves X company market XPeng for models. car demand in that won’t well. information plan X disclose which our

products driving enhance next long-term our is control future, which will – and standard in that’s product. Thank very the high-quality goal further also we mention and consistent will capability will that that embody across to our in our our like in that technological with and of However, performance we to products. cost deliver customers can something do cost-competitive, in better generations And so autonomous capabilities that high-quality based be also products future to our or on very we what you. truly technology I our the be lineup would ADAS configuration

goals the two now to Regarding on current question, or changes is mainly of focus areas. fulfill second part our mainly organizational your two conducted

that be is in product to future month has true technology that been you. to and in our one why changes electrical able products investment development architecture, and offer products efficiency are higher a truly customers. example, integrations, end-to-end in the first effectiveness to electronic With to all, well solutions that to our control those heavily in will our high-quality well, so also control as of invested product in And planning, identify and able we value. first for is and to also less do systems our our deliver be The terms able implementing of as systems. and other – to have we have our, perfecting and to vehicle architecture our whole demand to powertrain our those Thank and

we price maintain XXXX, I better drives a And question sales the stable rise Thank our will cost. or BOM MSRP, will second it cause our price? with And or our we and think in you. new want to launched PX. our we margin lower boost is In a GP maintain configurations. about would have and My PX maybe relatively even

year, to Brian the you yes, reflect GX. next technology again. that On ones on it’s the we model to particularly advancements, saw PX Yes, already aim upgraded the launch

of of the since So, models address selling are – faster feedback lot number cost also the will as be are new along and as platform have sharing a current have capabilities to margins also the well control just some of the that the version – higher upgrades and will the received other autonomous a of And of the the actually, actually have Benefiting PX PX – development driving current these shortcomings development, the fixes voltage capabilities the architecture, similar PX, on. some will able to and platform the with PX. advanced will of updated version. people the to charging continue equally from so the we the modular maintain current advancements we

PX. actually high the upgraded I of version or would it’s end say, the So,

we technology, PX we in the that with – the have reflecting think top-of-the-line we capabilities the more series. profitability believe price introduced and much that, PX can competitive a So, on I while maintaining series segment the

you. Thank

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

again today. us once you for Thank joining

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

concludes This conference call. you. Thank today’s

you now. for your may participation. lines You disconnect your Thank