How Xiaopeng Automobile "survived" three quarters of championships

Source of this article: Time Weekly Author: Liao Wei

High growth and record-breaking have become the necessary keywords for Xiaopeng Automobile's financial report.

On April 1, Xiaopeng Motors announced its march delivery sales. According to the data, Xiaopeng delivered a total of 15,414 new cars in the month, an increase of 148% month-on-month, and won the first place in the delivery of new car-making forces for the third consecutive quarter, and the data of the "Xiaoliwei" pattern of strong locking show that Xiaopeng, Ideal, and Weilai delivered 34,561 vehicles, 31,716 vehicles and 25,768 vehicles respectively in the first quarter.

The current new energy automobile industry is facing chip shortages, raw materials rise and other challenges, almost all car companies have been greatly affected, Xiaopeng can achieve the above results is not easy, not only continue its excellent performance in 2021, but also on this basis more strong.

Deliver grades

Delivering first for three consecutive quarters, Xiaopeng's lead is continuing to expand

Behind the frequent successes in delivery is the emphasis on long-term investment

On the evening of March 28, Xiaopeng Automobile released its financial report for the fourth quarter and full year of 2021. According to the data, Xiaopeng's total revenue in the fourth quarter was 8.56 billion yuan, an increase of 200% over the same period in 2020, and the total revenue for the whole year reached 20.99 billion yuan, an increase of 259% over 2020.

Under the challenges of chip shortage and rising raw materials in the industry, the gross profit margin of Xiaopeng Automobile fluctuated to a certain extent last year, but with the increase in delivery volume, the emergence of scale benefits, and cost sharing, its annual gross profit margin rate climbed from 4.6% in the same period of 2020 to 12.5% in 2021, and its hematopoietic capacity was further improved.

Compared with the revenue and growth rate of the new forces in 2021, the growth advantage of Xiaopeng Automobile is significantly ahead of Weilai and Ideal

According to the data, Xiaopeng Automobile delivered a total of 41,751 new cars in the fourth quarter of last year, a record high, an increase of 222% over the same period in 2020, and the cumulative delivery volume for the whole year was 98,155 vehicles, an increase of 263% over 2020, ranking first among the new car-making forces, and one step away from the milestone of "100,000 plus" delivery annually.

However, behind the growth rate of delivery volume, revenue and gross profit margin more than twice, Xiaopeng Automobile's net loss in 2021 was 4.86 billion yuan, an increase of 43.8% year-on-year, while Weilai and Ideal, which are also in the head camp of the new forces, lost 4.02 billion yuan and 320 million yuan in the same year, respectively. In this comparison, some voices questioned why Xiaopeng fell into the dilemma of selling more and losing more. Where did all this money go?

"Xiaopeng Automobile will adhere to the entrepreneurial spirit and business thinking, and continuously improve operational efficiency." System platforming will drive changes in our powertrain, manufacturing processes and BOM cost system. For the above phenomenon, He Xiaopeng, chairman of Xiaopeng Motors, said on the conference call that the gross profit margin of the new model, including the G9, and the gross profit margin of the company as a whole will be structurally improved. Moreover, with the help of scale effects and operating leverage, the expense ratio will continue to decline.

This also means that xiaopeng's management is very clear about the loss and the doubts of the market, but as a sticker of long-term doctrine, they choose to shield external noise and move forward step by step according to their own development rhythm.

Stick to long-termism

Is it appropriate to measure the profitability of a mobility technology company that has only been established for 7 years?

"NIO has only been established for four years, and you can't ask a four-year-old child to raise a family." For the answer to this question, Li Bin, founder and chairman of Weilai Automobile, has responded. Use the growth trajectory of the industry leader Tesla as a reference, or more intuitive. In 2003, Tesla was founded and listed on the NASDAQ in 20210, and after a series of questions and ridicule, the company finally achieved full-year profitability in 2020. From its inception to profitability, Tesla took 17 years, from listing to profit, he spent 10 years.

Amazon, one of the world's largest tech companies today, is now worth $1.7 trillion, but founded in 1994, it didn't make a quarterly profit until 2015. For the question of the existence of the market before the profit, its founder Bezos did not care, he once said, "We will make continuous long-term investment decisions to 'strengthen the long-term market leadership', short-term profits and Wall Street reactions will not enter our decision-making vision."

Xiaopeng has only been established for 7 years now, less than two years after listing, and some insiders said that it is too early to talk about profitability. What Xiaopeng needs to do most at present is to invest more money in research and development, ecological construction and other lifelines, practicing the basic skills to invest in the future is the key, and profitability should not be the goal at this stage.

As a believer and practitioner of long-termism, Bezos proposed in "Invention and Lingering" that the difference between long-termism and short-termism is the difference between enthusiasm and mercenary, and that to evaluate a person and a company is to see whether they are committed with religious enthusiasm or take pleasure in making quick money like mercenaries. Enthusiasm and mercenary, but also two words with similar English pronunciation but completely different meanings, subtly highlight the different attitudes towards work and the future.

Xiaopeng Motors is committed to leading the future travel revolution through exploration technology, and being a "future travel explorer", a team with such a grand vision will certainly not be a short-term support pump.

According to the 2021 annual report data, in terms of research and development alone, Xiaopeng invested 4.114 billion yuan, and the proportion of research and development in total revenue was as high as 19.6%, 12.7% of Weilai, and 12% of the ideal. In the past three years, Xiaopeng's total investment in research and development has reached nearly 8 billion yuan.

At present, Xiaopeng R & D center throughout the north, Shanghai, Guangzhou, Shenzhen, the United States Silicon Valley, San Diego, xiaopeng total number of employees of 13978 people, of which R & D personnel reached 5271 people. According to the information previously revealed by He Xiaopeng, the team size of intelligent auxiliary driving has reached 1500 people, that is to say, the intelligent driving research and development team accounts for nearly 30% of the total number of research and development. According to the data of Tianyancha, Xiaopeng, Ideal and Weilai applied for 2176, 964 and 931 patents respectively.

As orders continue to rise, the capacity of Xiaopeng's production plant needs to be continuously expanded, and the expansion of sales network, service network and charging facility network needs to be accelerated. And this requires a sustained huge investment. Comparison of R&D expense ratios of new forces for the whole year of 2021

According to the data, Xiaopeng currently has intelligent manufacturing bases in Guangzhou, Zhaoqing and Wuhan, and the planned production capacity of Weilai in two years can reach up to 600,000 vehicles / year, which is difficult for other new force car companies to match. In order to grasp the demand and growth opportunities that have erupted in non-first-tier cities, Xiaopeng has also carried out a forward-looking channel sinking layout, as of the end of 2021, it has laid out 357 sales stores, covering 129 cities, of which 209 directly operated stores and 148 authorized stores, as of the end of last year, the proportion of sales stores outside first-tier cities has been close to 80%.

Harvest time compound interest

With years of investment, Xiaopeng is entering a critical harvest period.

According to the data, Xiaopeng delivered a total of 34,561 new cars in the first quarter of this year, 2.6 times that of last year, and continued to lead the new car-making forces.

At the product level, in 2021, the delivery of P7s with higher prices and better profitability continued to climb, with 9183 deliveries in March. It is reported that the P7 will hit the target of more than 10,000 units of delivery in a single month this year, which is only one step away from the target. The Xiaopeng P5 delivered 4398 units in the same month, with a total delivery of 10486 in the first quarter, an increase of 38% over the fourth quarter, and the market potential is slowly being released. He Xiaopeng said, "If the supply chain problem is further alleviated, the monthly sales of P5 will gradually approach P7 in the second half of the year."

The production prototype of the new G9 model with a higher price has been rolled off the production line from the factory and is scheduled to be officially launched in the third quarter of this year. Xiaopeng Motors also plans to launch its first model in 2023 based on two new model platforms, targeting the C-class and B-class car markets. In 2023, Xiaopeng Motors will have at least 4 new cars and upgrades of existing models to support XPILOT 4.0.

"The G9 represents the highest technical level of Xiaopeng Automobile's independent research and development of software and core hardware in the past few years, and its product strength is significantly ahead of the hot-selling SUV models of the same level." It is believed that the G9 will become a hit in the smart pure electric medium and large SUV market. He Xiaopeng said. Some industry insiders said that the listing of G9 and other products will greatly enhance the delivery scale, revenue, gross profit and other financial data of Xiaopeng Automobile.

Charging network and channel network. As of January 17 this year, Xiaopeng Automobile's brand super charging stations have covered 337 cities across the country, and the number of supercharger stations has increased to 813. By the end of 2021, 357 sales stores have been laid out, covering 129 cities. In February 2022, Xiaopeng Motors announced the conclusion of a strategic partnership with two well-known European automakers to cooperate in the Netherlands and Sweden to act as retail agents. At the same time, Xiaopeng Automobile's first overseas brand retail experience store opened in Stockholm, Sweden.

In terms of its core advantage - software/algorithm full-stack self-research capabilities, Xiaopeng's achievements are also quite remarkable. presently. The intelligent driving technology of Xiaopeng Automobile in the domestic road scene is not only at the top of the new car-making forces, but also in the domestic intelligent car head camp, and its research and development of technology is gradually entering the no-man's land. Whether it is the upcoming urban NGP launched this year, or the previous cross-level parking lot memory parking function, Xiaopeng can always develop more practical and original functional technologies for the real needs of current consumers.

In the conference call, He Xiaopeng said that the penetration rate of XPilot of Xiaopeng Automobile may be greatly improved in the 4.0 era, especially when the urban NGP function is turned on, and more daily use scenarios will greatly increase the penetration rate of XPilot 4.0, or more than 50%.

It is reported that the urban NGP function of Xiaopeng Automobile will be completed in 22Q2, and after obtaining the permission of the city's high-precision map, it will be launched through OTA. At the recent electric vehicle 100-person meeting, He Xiaopeng said that from 2023, it will enter a new era of man-machine co-driving (high-end intelligent auxiliary driving). On this basis, Xiaopeng Automobile will begin to transition to unmanned driving in 2026.

It is worth mentioning that relying on its own advantages in intelligent driving and ecological system, Xiaopeng is not only in the forefront of the new car-making forces, but also makes traditional multinational car companies feel threatened. A few days ago, Volkswagen Group CEO Diess posted on Twitter, "The future is electric, digital, automatic, and also provides a new direction for design." Klaus Zyciora, Design Director of the Volkswagen Group, and colleagues in the brand department showed me how to deal with the competition from new forces such as Xiaopeng and Lucid."

Ping An Securities Research Report pointed out that xiaopeng automobile 2024 revenue forecast of 100.1 billion, net profit forecast of 1.3 billion, short-term industry interference factors do not change the company's long-term logic, the company as the intelligent pioneer of intelligent vehicles, is expected to continue to benefit with its automatic driving barriers, maintain the company's "recommended" rating.