XPeng (XPEV) 18 Aug 232023 Q2 Earnings call transcript

Hello, ladies and gentlemen. Thank you for standing by for the Second Quarter 2023 Earnings Conference Call for XPeng Inc. At this time, all participants are in listen-only mode. After 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 for Head of Xie, the Investor Alex Relations company. ahead, go Please Alex.

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

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

press the section website You ir.xiaopeng.com. visiting our by earnings also the release can at view IR of

Finance Charles today's on Mr. management Gu; Xiaopeng; Vice Chairman Vice our President He Mr. Finance Dr. Vice Co-Founder, and Brian Mr. include myself. James Participants will from and of of President Wu; Corporate and Zhang; call CEO, Chairman, Investments, President, Accounting, and and

Management and replay with of conclude with section available will webcast call a conference IR begin website. be will prepared the call our this A on remarks Q&A session. the will of

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

Forward-looking uncertainties. statements inherent risks involve and

may expressed and regarding different the to the materially from Exchange under obligation with company's such, company is as included views forward-looking does uncertainties any and except required results these statements public in company Securities assume the not filed the filings As Commission. and US relevant update any law. information of be other applicable Further the as today. The risks

as of Please reconciliation unaudited the call unaudited a well release non-GAAP GAAP non-GAAP also measures. earnings include measures. release press measures, unaudited note contains conference financial financial that and measures a as GAAP this XPeng's earnings unaudited disclosure of the press to XPeng's

ahead. CEO, to Co-founder, and go He call Mr. Xiaopeng. over the turn Please now our will I Chairman,

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everyone. Hi,

within set structure, reforms environment, short the marketing time and intensified tackle product, I huge and comprehensive across year, business frame. first the led and competition given transformation organizational significant During rapidly forge of and challenges risks the to strategy, this evolving of a half

cycle. The momentum. meaningful pleased to turbo phase model better become propelled in intelligent GX and expected created EV virtuous our We've I'm commercializing price the of the internally Xpeng initial into dominant this and generated sales market transformational have RMBXXX,XXX than report self-developed adjustment in and segment, the a breakthroughs to platform BEV technologies. full-stack that RMBXXX,XXX Today, results growth charging externally our industry-leading has

a formed strategic Volkswagen. have partnership We with long-term

official of embark to EV in point acceptance technology, platforms on we'll companies. ADAS emerging our inflection part orders faster As total version We we than an and stronger partnership, estimates. for collaborations of creating far launch, Max its first our orders expected. for intelligent develop software for value in for GX GX is XX% broad-based saw exceeding and long-term Moreover, the of both user the month accounted

half Our improved continuously the NPS the first as and an prioritize customer-centric satisfaction scores industry-leading transformation. reaching of in level OTA year, we

and a In initiatives, confidence and efficiency and suppliers provides addition, the foundation launches. at have engagement of owner external boosted for This improvement the new organizational advancing strong partners. morale, changes team Xpeng other adjustments, cost-saving product

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This of ninth month inception. marks our the anniversary

to commitment make We a been the customer range nine advance full-stack never EV areas in to innovation plan accessible across have Over years, technology to steadfastly leading-edge globe. the broader has advancing we to technological That innovation. wavered. core cohorts committed smart products past of

software, business a across sustainable and we'll capabilities grow a scale, commercial by empowerment. full we model underpinned for stack larger As build partnerships hardware, to operations

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that said, performance I'm our underlying we to to glad capabilities. underlying tirelessly the across that look and have growing That short-term financial evolve transformation, consistently must continuously long run, competition in begun capabilities in I elevate and As the fruit. order efforts recent remind we in this myself this our to our advance board as with forward team bear move succeed beyond the we

have continue grow. to and deliveries straight months grown sequentially vehicle Our for six

deliveries monthly units been gaining new since the our for has consecutive product June, overcoming in two launched chain Specifically, with March supply its consumer challenges. X,XXX XXXX, surpassing PXi, traction months great

up further sales enter will momentum. As and of believe the we of model continued second the year, we this half we product capacity to its PXi competitiveness lineup ramp drive the

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More SEPA and platform strategy both which June of made RMBXXX,XXX by GX, higher on in a accessible ADAS emerged wide price across the range X.X, to consumers, popular first the and the lower as the end is segment. bestseller advanced GX mainstream quickly the RMBXXX,XXX scale industry debut segments. as GX efficiency market at XXX-volt technologies, has introducing strategic prioritizes has to expansion, model price and cost and our including enabled pioneer has such the X.X full importantly, in more phenomenal a built most become of segment. SEPA our XPeng become a of Furthermore, Guided its SiC pricing platform-based consumers scenario in market that those

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units to I ramp delivery Today, awaiting up their output Max In version. currently making patiently that want total. delivery production deep to volume fueling has a than production quarter, owners for grow upcoming of gratitude deliveries configurations the to monthly. the to September to beginning. partners deliveries goal of of for XX,XXX the strive especially the will supplier over our popularity GX, We monthly extend is a the every GX to enriched reach I peak continue more the the our GX GX. followed other for XX,XXX deliver quarter. to With those GX on-sell are XX,XXX fourth we'll who capture endeavor its with and for success first models, my just of the fourth XPeng increasing in in with accelerate we monthly estimate throughput that significantly, will GX delivery believe our market We're batch ramp-ups in GX

introduce top-selling even plan models. range SEPA wider to X.X-enabled Moving forward, an of we

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a In complementary July, we China's XPeng's that business making the not vision long-term auto we beliefs but industry Group technologies with for Combining are and and development. strategic announced Group. EV capabilities. only and underlying our smart forming also world-class Volkswagen partnership Volkswagen's with milestone the journey, advantages. believe marks long-term this partnership Volkswagen XPeng chain supply I the in smart in highly XPeng's industry-leading and technological evolution hold compatible EVs, design, engineering and compelling of in our each

will Our two to to experience technologies, with customers. superior bring products best-in-class models our a and begin B BEV class collaboration top-notch

partnership, chain Volkswagen XPeng self-developed consideration in with next-generation economies technologies our investment Volkswagen’s EV excited Group Volkswagen core strategic in supply scale. groundbreaking for of confidence sharing a Group platforms, and strategic also million. equity long-term the cooperation and will approximately build in underscores capabilities. this recognition about in-house synergies continually stronger total software of our and I'm technologies which capabilities, make $XXX of the a We'll deepen and

creates our business to that and model and capitalize software industry's hardware collaborative generate auto opportunity full stack Our first this integrates immense the technology, for shareholders. on globe to value corporation we're moving

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be As powered era advocates trends era will convinced reap vehicles. I'm globally, XPeng a we of continue will of the evolution, conclude technology to into most the software-defined of evolve, venture active AI that substantial this and benefits. new to among cars will expect where

to copilot reshape will the the electronic smart As our of road and architecture system operations. look R&D, an establish automotive on autonomous the well intelligent functions taking unifying as charge evolution macro for presenting disrupt steam power cabin, XXXX to technology habits. lead planning existing R&D machine our tech AI enterprise-level technologies for driving we map road I team, achievement I’ll initiatives. ready electrical October human as our forward and and ADAS, technology at Tech AI and XX. autonomous this intelligent We're latest team development and several progress, I Day innovative personally as in of gather map driving planning

[Foreign Language]

breakthroughs drives is professional a speeding week, major who it our driving XNGP high-definition does technology reviews districts versions just of to Over adoption on not participated of many peers. overwhelmingly make the this and The across with experience with further XNGP maps knowledge of because coverage rely test XNGP the in this widening the did acceptance completed second roads. XNGP-assisted development year, half rely additional our our prior plan customer number and of in Beijing the we media precision prototype positive with on and on up, and maps drive the or we high gap that not to ADAS gave media process,

business. OTA slated make innovations, cities, that XNGP maps we entail configuration. with technology ensuring flexible across sure cities this Through available BOM XNGP also owners. in we models cutting about to We're of have have first cost will the along software features autonomous delight our the by next but yet reliant to independent a delight out pricing XXXX, driving exploring approximately software -- batch for of by hardware our October, the year. XPeng to update advanced new HD our for other customers most as the we'll XNGP our are work end that by roll models subscription XX% will to confident of standard simultaneously XX XNGP's non-HD For announce, We're map

[Foreign Language]

and my our expressed margin costs we with improvement my These end Interestingly, for goals to mind But in price driving. two the initiatives that in Fengying the at for going by innovation autonomous working level chain the in With affordable I considering various no segment R&D, and company level. units, Wang will closely cost of supply reduction, subdivisions. RMBXXX,XXX strengthen full ago, as competitiveness by am well, promote control gross our initiatives achieving marketing. manufacturing, several make I XX% the consumers results formulated President, cars China highest greatly cost one plan the auto makers business view competitive China, and have implement product and the product This cycle autonomous a among core in I largest prioritize world intelligent including range. technology car could cost design, to Ms. savings and reducing have years I cost-saving some substantially of effectiveness, to clear of better of XXXX. with the even autonomous cost accessibility cars overall XXXX, changed offer drive goal will the as cost-saving market and RMBXXX,XXX great in confidence other achieve

[Foreign Language]

the and service sales, Fengying, terms In have of our Wang continuously and capabilities, we of improved cross-team satisfaction collaboration. President, leadership under marketing customer

across half across we'll dealers. share X spur help network into domestic top our market model These more our and initiatives Tier and To partnering and end, drastically expansion the cities. will include year, our sales gain optimizing transformation of that lower-tier us ahead and Looking our accelerate business efforts international our with channels. the sales second will

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cash end billion. to our our around outflow Regarding for track With back hand from XXXX of cash we growth, deliveries RMBX quarter of on flow, to sequential vehicle billion. the quarter the narrowed at second significantly operations amounted RMBXX.X on cash

half growth gradually rebound to operating and and of XXXX, sales products, second the our -- over from new continue gross second will efficiency. with accelerating other the improve margin our GX we With the half expect to

turn to for half of operations As cash the a positive our we result, from expect overall flow the year. second

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moving our to guidance. Now,

expect we deliveries of to total We and branding, team quarter and revenue sales, the we units be vehicle RMBX quarters, to between RMBX.X over between third quarter-over-quarter XXXX. loop several Representing moving proactive positive morale form and XPeng. started to adjustment Thanks the last this XX,XXX quarter to have growth XX,XXX to a billion. into billion our be year, the the flow and in at our XX.X% third seen made XX.X% cash

of the areas reshapes AI over accelerate our to we the power the expect two and next automaking more virtuous industry, As years. cover cycle

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embark way joining I'll VP performance finance Mr. US at By to our Thank to next new at China for Wu, into to General James' skill turn business Motors-Wuling now set and extensive over the Auto. and look operations to into international in management level SAIC-General success. lead you, and With of finance financial of Motors before call We finance and look held James that, tapping his of his executive our and everyone. headquarters both forward as roles and his we second contributions is team, operations James practices. our suited Finance, XXXX. we XPeng, ideally insight to quarter discuss valuable experience forward introduction, our of the on

and Xiaopeng, you hello, Thank everyone.

our to that say to in happy start, join interactions. I to I'm time Xiaopeng exciting and look I'd this future like forward Before really

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

were XXXX, second of Our and quarter decrease decrease of total same Revenues billion vehicle from XX.X% the of sales quarter-over-quarter. increase RMBX.XX XX.X% from billion of of year-over-year quarter a second revenues the for for a XXXX, the period XX.X% representing mainly were increase decrease of vehicle an the RMBX.XX an subsidy PXi. of first new due quarter and was year-over-year was the of deliveries higher deliveries to and of the attributable XXXX XX.X% The mainly lower to while discontinuation increase from vehicle energy XXXX. quarter-over-quarter of vehicle

XXXX. decreases of and GXi negative sales X.X the billion and quarter-over-quarter for with for the amounts was inventory write-downs for and stronger-than-expected period XXXX inventory first of compared of XXXX same amounting model X.X% The launched forecasted Gross compared due year-over-year the to to as a margin explained were XX.X% the purchase of on first, XXXX. its vehicle margin for X.X% with quarter lowered market by the same was of of with for quarter negative second second losses commitments quarter and the the related impact to vehicle models management XXXX RMBX.X X.X% margin. for newly negative on for points of percentage first X.X% the XXXX negative period Vehicle quarter X.X%

mentioned above. Secondly, increased promotions and of sales subsidies expiry energy vehicle the new

X.X% stores support product to the mainly quarter-over-quarter advertising and of an billion X.X% an were of franchise mainly year-over-year and expenses our development new portfolio the support second related The expand a RMBX.XX billion for of were marketing RMBX.XX due higher vehicle the the future commissions to representing XX.X% attributable quarter-over-quarter. an increase to resulting new decrease year-over-year, R&D models of increases expenses increase XXXX, second primarily from and The The X.X% of growth. expenses reduction quarter-over-quarter. was paid XXXX, marketing increase year-over-year quarter to decrease and launches. expenses. higher product of we was SG&A year-over-year increase as representing of advertising quarter-over-quarter expenses were of quarter for to and lower to

XXXX same of foregoing, RMBX.XX the loss for result XXXX. with quarter was billion operations of a for the RMBX.XX quarter billion XXXX of billion first the As the compared of second RMBX.XX from period and for

RMBX.X XXXX. the second of quarter for for billion and the of quarter was of RMBX.X XXXX loss same billion for Net compared XXXX period the with RMBX.XX first billion

and had of equivalents, billion. June As of cash short-term cash, our investments total company RMBXX.XX cash time in XX, and XXXX, restricted deposits

the I our for length second on To release to be financial listeners of encourage earnings refer to mindful will details press call, of our earnings quarter our more results.

concludes go This Operator, please prepared call the now We'll open ahead. questions. remarks. our to

[Operator Stanley. question you. Hsiao with Instructions] from Morgan And Thank Tim comes Yes. first the

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is because about suggests question first of of my supply volume improvement component third So expect the guidance component I continuous a improvement quarter the the supply.

GX lately. affected waiting the new momentum order However, time the adversely longer has of

will and is bottleneck more such model like consider So you month new of the [indiscernible] when we know momentum that you. be the the And [XX%] reboost how (ph) the avoid just upcoming for or per would we on stable want Thank monthly could do do to GX? run to supplier relapsing? order rate. to expect XPeng And the expect with XX,XXX fully add removed the bottlenecks

[Foreign Language]

your Thank question. you for

orders definitely, the And continue going up. to are very very range, we looking sales, all, expect of price to one And it right is be competitive. go we it's confident top GX definitely GX of now, at among First players. future definitely, the to and of RMBXXX,XXX RMBXXX,XXX to

Max the because lacking now, continue supply we're parts into supply August, in core face the of and August are that we the of September momentum But some of we well. ramp-up ramp-up the the right same biggest and intelligent since in is the version -- challenge as part. expect to of we the October, seeing going the However,

GX. monthly So achieve least definitely to at expect for QX, XX,XXX going deliveries into we

such we future. adjustments shortage have lot now, to of right issues And and done the a revolutions actually avoid in

can models, supply only the reliance and of as we well. future with dependence production but example, of of overall the launch our SEPA reduce For chain platform, X.X the our cost not reduce we our can

can parts a that control and future, lot actually much have to our a models. of much will which development supply chain have of models SEPA straightforward parts. that and can support be And means of mutually supply management on more much over platform our core are So -- easier can better X.X, have more compatible X.X, In also our will be on will manage, of will well. we of are built SEPA much as we in future, future the the the because it be the we which lot that the that more the

speaking, given our supply we of is getting from the overall so GX to observed technology, you. Thank chain constraint far, development what we our believe So thanks that and resolved.

[Foreign Language]

So pricing question my second the competition. is about

quarter need want about model to XPeng potential how September. Does I more margin launches the we pressure through second upcoming effectively upcoming learn the vehicle wave cost war for strategies So more of to models? just So pricing like and in thereafter? or along you. think on get the supply Thank management’s or the Tesla’s about new the we view on new to aggressive should third the our GX in chain? with their of my question. impact If so, price Could pass with impact promotion current that's competitors

Tim, Hey, it's Brian.

Let me address your question.

I really movements when pressure. the price for to before all, actually resulting, I our underscore trends, our strategy competitive our momentum, I now pricing sure of intact. trend because GX, recent we GX established pricing is sort right that And of the make But and have that gross First as we competitors impacted address well want growth the actually scale. think, sales, especially growth of regain of we the margin think, think is our not as I to I anticipated

think this I us year. foremost the for that's strategic priority

returning we us revenue scale revenue in as help gained have efficiency. historical of actually As actually well economy you successfully quarterly our will long forecasting growth terms the that gain momentum. in to We can actually see -- to are high run now That rates.

to want flow. to achieve as Another gain very is actually half a this the of priority for cash year we we second strong company, that also

deliveries, second our anticipate earlier we level for with heard actually our be on the positive. half flow of cash you the that operational the As growth

So important that's I build to for into think economy. momentum us also improving

gross I'll of you sort -- So something at that you over estimate. on I sort think trends moment, but trend, can it hand some of But give trend the clearly, margin James give guidance analyze. cannot some give think the that's we to to to I

Yes.

wanted mentioned, which and our as in costs. focus margin we've clear terms obviously well So seen as volume I help will our of is scale, Brian gross just to manufacturing improve add, as our gaining very

that earlier for just note in script, the from level the mentioned quarter. QX. of (ph) scheduled I some in got production As [EOP] third to still GXi in the some impact want have we've GXi we

second we half, will there coming through And that volume portion will increase QX, expect gross we've second margin Brian year. as the the towards we in another we cash a sell improve terms flow a pretty second pretty I cash in the really time. And confident second So the seen cash you. want this half, achieving do of in we big balance fourth And in increase better just echo improvement mentioned, in are to expect we a volume as operating quarter be some standpoint, healthy margin And we be mix in into to our of of over from the quarter. become third end that half, positive into QX flow as gross our positive we cash have and products and year. in to the already flow. lastly, the the quarter Thank

shared. very the Thank details James, and Thank for you Brian you. much,

question next Goldman Tina the Sachs. Hou from comes And you. Thank with

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question. my Thanks management for taking

of is in distribution one the terms building. network first The

year the of well management next there cities as mentioned, as into into changes the as half year. lower-tier well of a optimization will As this deepening as lot be second and

higher in sales expect as to accordingly XXXX? of expenses half Thank level marketing year the should second you. well as we of So a this and

is this Hey, Brian. Tina,

operations. the to sort We you're are will sales actually I strategy. to envisioning performance Interestingly, sales cities in to read stores, actually owned think, actually, a more will not terms sales the actually effect, simultaneously agents. performers think of of with because also, current cost actually, and efficiency high-quality we And current changes store We're model. well lower channel of partnered we achieved gain sales to our lower-tier as making lead our marketing as channels. sales now, more actually enough efficiency well I has efficient investors this will the as, partners envision out think -- we been not optimal I we and both right lead be that with operators. on think, and as weaker optimize our for have a penetration better our right. our and investor Because And

So actually and on with ratios. for I partnership efficiency. lead high will renewed we our envision marketing lower think, to also more standard sales higher and setting sales efficient That's focus partners, and

[Foreign Language]

management still in the start year, So we're level my mentioned breakeven point. second operating QX to the gross because margin Since that will R&D positive question this continuing is into continuously. just regarding turning wondering invest

would be operating point? expected So what breakeven profit Thanks. the

Yeah. Tina. Thanks,

I forecast, overall cash we're actually think free flow will view cash for on breakeven we more that as company achieve quarterly guidance flow as positive. well XXXX, our by current maintaining

the So that's then for And actually confident we achieve for hit. whole breakeven next something year XXXX can sometimes maintain company. year, we still will breakeven overall the we're

Language] [Foreign

question Thank the you. UBS. Paul And from Gong with comes next

Language] [Foreign

in does what with HD the to previous it challenges version So the autonomous is regarding how of cities, are my to cost Map? have first that, key the understand applications And without map. overcome? more compare of achieve with could offer I terms we can driving question coverage HD the

[Foreign Language]

When a to for we because you slightly for very high-definition question. are before to Thank will technical. is it's XNGP your change turning be This equipped to know and you answer. right. lanes you maps, try simple straightforward provide left when or with expect I'll easy guided

to have its where or by However, will trickier system situations of will to own high-definition beforehand. without on kind what change things change the the get XNGP much judge will because maps,

a and like will the solid lines This sufficient characters is turn environment, to or visits will There For you to actually a some that the equipped identify this that for example, need get left new says to dotted acquainted. right road or -- with for it be a will just always when hardware get need or possibility is on you road signs is on time mistakes. lines a it signals. corner turn person the

However, there reliant a come this non-HD of are XNGP. that from lot pros map

XNGP benefit wherever for speaking, can and long of you example, you that which conditions can policy jump maps, hardware maps. First cost have means need of any as spend to you you safety. as through high-definition don't the lower maintenance of benefit the want it all, this sort that another of conditions. long third you comes default to you by need XNGP that hoops equipped have, the don't of you also the get go And with our actually extra road and a approval purchase lot high can the there. benefit basically, recognize to guide theoretically is to is as phone second there, because without is XNGP HD you reliance high-definition don't guide the that is the And to that And as actually because big the map the also your you bucks

example, need For construction might able adapt be indicated be of high-definition and you changes. always kind not might there that to the road to that be in to maps, going on

my signs Now to including and and characters, of the in challenges. Basically, actually the are you is capability you And that to make question of that elements, on down time. and answer. Thank it all ahead basically, your surrounding of when all -- you major to basically, hope helps. decisions signals, have that mentioned you. of pictures. the simple participants you actually are traffic, mention what And other words comes obviously, that vehicles and the the based kinds I identify environmental road

[Foreign Language]

Does HD second even this regarding observe driving, regarding autonomous the mean of power? towards chips? of to question on without it you're think your power autonomous to in environments power leads the the So to it should the regarding down more, to heading mean more, HD calculation calculation that case, more XXXX requirement you the and going map. calculation still that Does is more reduce smarter maintain software use the And calculate my the following bigger -- going that so cut Or even driving cost hardware cost we XX%. calculation by are power? mentioned you requires

Language] [Foreign

when question. we and it fusion definitely perception Thank for algorithms, level require higher to your Definitely, use more need computing you multi power. will adopt model

very already computing our successful have were TOPS computing XXX we we However, with And power. even TOPS power. XX XNGP nowadays, actually using

sufficient. more building So are hear our reduce expect definitely, Day while year intelligent our ways about to Tech actually, you up can we very this And believe cost driving our that to innovation we well on on the October of innovation one can to an how about and using going cost talk XX. And production technological level. our drive is things I'm we down key management as on power operational

how example, architecture computing power, actually right electric terms about we utilize down For in electronic also the are of to our now improve drive and thinking to -- to by our example, an two to tech hear also expect on SoC just together. Thank you. day. can everything maybe is hear -- PCBA do and This and more you one actually using efficiency our to

you much. Quite you. Thank helpful. very Thank

Thank you. Suisse. with Credit And question from Wang comes next Bin the

[Foreign Language]

My one question is about XXXX products. new

RMBXXX,XXX. producing were you around range pricing one that mentioned in also the self-driving You car

the for a example, you. GX, So slightly than lower it's Thank GX? called product going to be

is Brian. This Bin. Hey,

model but year, We providing well, will be I this two the planned next not for half. be new we second have this launch in drivers growth for all specifics, moment. launched likely at large but will envision volume be to Obviously, as those

you. Thank

And the from CITIC you. Thank Securities. comes with next Yin Xinchi question

Language] [Foreign

second So on the half. my on guidance question product is question our my the pipeline one -- about number

cruising the release details? And strategic you and date the MPV more is will cetera? And my of could size MPV the et the XPeng? ranges, about number So exact in For on information provide the be price, what question two the example, collaboration. the

will futures? is the So are or with be looking apart have And that in there the you. collaboration what Thank OEMs potential forward opportunities our from Volkswagen, any Xiaopeng. is attitude to or collaborations other

[Foreign Language]

take me first question. the Let

development our the of been going upcoming really has all, of well. seventh First seater

but So starting end by we original expect car mass plan, from expect it expect deliver don't QX. year, the next to in to late we debut in follow the year, of a We our scale the which to definitely previous enough too able unfortunately, learning have for to to the to you experience. this about car the not will deliveries. And information. prepare give I'm chain is well mass In the cars, from regards much supply we details

However, about several things can here. talk I

its it it's of also is in First expect to by it say is biggest intelligence that is GX. it point in That's now. its or the car the means this you. driving of big It I of inner X.X all, its can And huge, benefit the platform, its inner SEPA It as selling it supported and say experience. the same very same all the handling of be advantage terms especially is vehicles price point. second would is whole it's of Thank spaciousness. -- And car to integration, the of same which space, of and logic terms the top-notch drivability. another for we and models that offers space I

All address right, this question. Xinchi, your I'll Charles second here. is

stack first-of-its-kind -- in believe to collaboration are So first this that have on see we future. is the there partnership. with of start, strength and highly and on model and Volkswagen win-win a to we a actually we And we the we all, full our like complementary that and collaboration the GX strategic technologies. And bring other partnership, a long-term collaborate partnership can our business the a created see is such we opportunities software platform -- Group only

looking potentially also commercial other in with think to in also bring terms we and parties, selective. I be to the to and also remain will our I bring we meantime, the value strategic So the that of We were value very but that open-minded partners. think collaboration us can that

[Foreign Language]

HSBC. Yuqian And next with from Ding question the comes you. Thank

[Foreign Language]

question engagement ask would eventually, like looks to be data minds-off, to corner regulatory the autonomous does the for driving. X and the miles? per is hands-off the first mature the The no case moment would truly require management think just It iPhone support? achieve and big technology naturally exhausted that is eyes-off Or would to when but million

Language] [Foreign

for autonomous bit driving. be It's My it to short X that iPhone for answer Thank question. XXXX or capability. XXXX my of I'll the moment to best the is answer try a that tricky.

it. Now factors there influencing several are to

and XX% I'm The full and producing When the first intelligence. urban also I one high different but factor is overall roads, just not manufacturing neighborhoods also mentioned including also the also the cetera. level and referring capability, parking within And that highways of And actually et covering the China area, second areas area of the full of to twofold. third its cost and is is such actually garage, factor is coverage.

one other first the driving is and is safety overall The experience. the profile

definitely mentioned, you As rate takeover the matters.

having per example, maybe coming one takeover to two three one have zero within we have kilometers. expect that, kilometers. on XX,XXX or X,XXX which achieved to level with the we years, the one a So miles, takeovers actually in And XXXX have of is to for to highway, already

thing not beat whether big Another is experience is also it's actually a or it -- driving another driver driving of to can smartness the in terms actually part efficiency. human its and

LLM, to we rapid Now the be reach personally XXXX schedule. up you. of development because that it's of Otherwise, bringing moment actually thanks I expect XXXX. believe the Thank could that to speaking, point it in X iPhone

[Foreign Language]

understand to could is the cycle, talk second the be there side. be RMBXXX,XXX. can the we arching between spectrum limited that about pricing although shared on be detail about new But did RMBXXX,XXX to My question the company product

size below. GX the So be to we see midsized RMBXXX,XXX RMBXXX,XXX targeting covering the and compact may the

be pricing like RMBXXX,XXX target? Any we potential you. the for useful. to refresh revise point? pricing to to we GX consider would do we model RMBXXX,XXX or spectrum do position within how And want Thank color So the

Language] [Foreign

is all a times. you unfortunately, that topic Actually, this cannot internally And the have give multiple discussed I information. we

can previous families could multiple demand They is versions new bigger families. or competitive. multiple because as is price there crowded space well or what there could RMBXXX,XXX we XPeng models the replacement based between the is for second between our the and will very, models range have that demands multiple for use RMBXXX,XXX. and and level, smaller very definitely big are previous smaller be -- be or families. demands. customers, It or use RMBXXX,XXX And individual And user very different or same different needs experience, launch of expect different actually different to as RMBXXX,XXX and individual models. is However, that from XXXX, that to to say on is we by identified of half market And platform, going it we be

However, SEPA platform meeting a X.X we are the actually using very with well. in manner current demands strategy platform can modular our glad market models to in new report using as our we big our that produce efficient designed, with high different very low very cost

forward lot Thank future. in the a definitely you. So look to to

from America. Ming-Hsun Thank with you. And of Lee next the Bank comes question

Language] [Foreign

second your margin. question is related to my quarter gross So

declined item? in So and any Is any quarter? GX also your contribution besides sales Is than quarter. is there second reason non-cash first why margin other gross Q-o-Q from there the lower discounts certain

Hey, thank this James. I'll you. This question. answer is

a you're EOP the toolings decision. of of portion QX. just have In in have majority a we we that's the earlier, booked I because the of because So impact -- there's want of is acceleration And that that as booked GXi emphasize impact right. because the to the of that QX, unamortized noncash mentioned

of EOP the Excluding margin promotional the seen lower in is the of impact, mostly by versus gross we That battery because older slight a is that quarter. offset That we some second we've that QX. the spend have. models costs have increased on lower partially still

collections on cash in volume, QX, And flow have your and Other from payables from pretty impact, is question, as second impact clear a that increase will because delivery we our profitability the a improve working our big stack will healthy than a will perspective, capital seen we to to improved -- continue come and we a basis. the will we impact the in we half. see

will which working in to our we Thanks. have increase half, considerable capital flow. second operating as will improve So gain the cash we volume, help

Language] [Foreign

question is second fast-charging for battery. So my the

you at not to the NCM that is already the [July] enough. in battery also in So And battery the small comprehensive [July] past But station the pretty (ph), expensive. is sales supercharging (ph). sell XC because still probably is portion start the time,

fast-charging So the in since market. recently, are battery LFP there some

to your discuss a such product of lower start So you adopt of to supplier your your kind with to will battery costs? future in the

It's you, Ming. Thank Yeah. Charles.

standard technology when time production all, the already we and of GX, mass configuration. first LFP And XC NCM we the the a at customers the the of as provided also point most best-in-class produce fast-charging So I today. and is it's is the fast-charging still well of technology in And already still in -- the think as the best-in-class the market the battery at this with mass market.

that But also technology to XXX think XX% I platform, the to powertrain XXX clarify our the it that supercharger. that product, I the perspective, your fast achieve support also also So a think believe to of I and charging our the from XC in though very voltage think and ports the experiences, on fast even in consumer and battery year. still that XC support with I battery this and competitive the on fast-charging also voltage first most cost can very it all, NCM answer the charging market And regarding is XXX-kilowatt ports, can and voltage coupled I the yes, of the battery XXX present LFP market the want question want the charging XC, competitive think we to I charging standard clarify, technology. charging

you, Thank Charles.

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