On March 17, Xpeng Motors released its unaudited FY2022 and Q4 results. From the perspective of quarterly range, Xpeng's overall revenue in Q4 was only 5.14 billion yuan, a year-on-year decrease of 39.9%, and the corresponding delivery volume was 22,204 units, a year-on-year decrease of 46.8%. Throughout 2022, Xpeng delivered a total of 120757 cars, a year-on-year increase of 23%, just past the threshold of average monthly sales exceeding 10,000.
It's an ugly but not hard to guess earnings report.
Because of the decline in the strength of the old P7 and the Waterloo-like start of the new model G9, this earnings report has already built reasonable expectations on the investor side before the announcement. A key highlight of the performance meeting is that He Xiaopeng said that he will vigorously promote cost control in the future, and gave specific "cost reduction" guidelines: more than 50% of the cost of autonomous driving BOM will decrease, and about 25% of the cost of vehicle power and hardware system will decrease.
Probably because "the profit is good", the US stock market opened Xpeng Motors' stock price rose 14%.
In the management commentary session at the beginning of the call, He Xiaopeng said frankly that throughout 2022, macroeconomic and industry competition factors have brought many challenges to enterprises, and also put Xpeng's performance under pressure.
But he himself has a spirit of "revolutionary optimism" and has learned to think for good. "These pressures help us see the challenges facing the industry earlier than most companies in the industry, and we also see the problems in the company in the process," He said. ”
In his opinion, this is even a kind of luck as a first mover, because it helps to start a second business early.
However, in the short term, Xpeng's delivery trend has not improved. Management expects the company's total deliveries in the first quarter to be about 18,000 to 19,000 vehicles, and revenue is about 4 billion to 4.2 billion yuan, which is more than 40% lower than the 34,561 deliveries and 7.5 billion yuan revenue in the first quarter of last year.
Judging from the information disclosed by He Xiaopeng on the conference call, the number of store visits and test drives after the release of the P7i has increased significantly. However, the peak performance will need to wait until the second half of the year, because the blockbuster G6 will be officially released and deliveries will start at the end of the second quarter. Officials expect that the G6 will become the top sales model in the range of 200,000 to 300,000, and will achieve a monthly sales target of two to three times that of the P7 after mass production.
In the final QA session, an analyst questioned the G6's above-mentioned performance expectations, and the analyst wanted to know whether the management could give other factors to support the explosion in addition to the selling point of SUV, after all, the G6 and P7 are in the same price range.
For reasons of secrecy, Mr. He did not give specific details about the G6. He only mentioned in general terms that in addition to Xpeng's usual leading level of electric and intelligent, this car will surpass competitors in terms of space, range, styling and interior. Just considering the market performance of the G9, the "best SUV within 500,000", the fate of the G6 may not be as smooth as imagined.
01 The four seasons hit the bottom, and the P7i went off the beaten path
The past 2022Q4 may be the most difficult quarter in Xpeng's history, because its deliveries in these three months hit a new low in nearly six quarters. In horizontal comparison, Xpeng's quarterly delivery scale has been at the same level as NIO and Ideal before 2022Q4. But in Q4 last year, under the premise that the average selling price was significantly lower than the other two, Xpeng's delivery volume was suddenly opened up by a huge gap, and the overall was even less than half of the ideal.
Those who should be responsible for the above situation, as Wang Fengying, who has just taken up his new position, said, are Xiaopeng's many problems in product planning and marketing.
For example, both NIO and Ideal first build brand recognition through high-end models, and then penetrate the volume with mid-range products. Xiaopeng, on the other hand, took a completely different route. The SUV side first released the compact G3, and then appeared in the mid-to-large G9, which is a low-to-high play. The sedan side is reversed, the front P7 is a B-class car, and the P5 behind is back to the positioning of an A-class car. As for the marketing problems, this can be seen from the disastrous SKU mix when the G9 was first released.
In addition, Xpeng Motors is also one of the few companies in the new camp that sells through the mixed model of direct management + dealership. This hybrid model is not that He Xiaopeng deliberately integrates the advantages of the two systems, but should be understood that he himself has not figured out which route to take. Because it is said that the two systems have been in charge of different executives for a long time within Xpeng Motors, the executive struggle even interfered with the daily sales of new cars for a while.
Based on his rich channel experience in the Great Wall system, the addition of Wang Fengying may help Xiaopeng clarify the direction of the future sales system. He Xiaopeng said at the earnings conference that Xiaopeng will further promote the position of brand marketing from the current first- and second-tier cities to third- and fourth-tier cities. In the future, in order to cooperate with the sinking of the channel system, Xpeng Motors is expected to further increase the proportion of authorized dealers.
However, although the cost of establishing direct sales channels can be saved with the help of dealers, it is difficult to say how effective this sinking strategy is, after all, the concept of electric vehicles and Xpeng's intelligent label are not so open in the low-tier market.
Last year's G9 launch was considered a landmark event, because the chaos of the SKUs that cost 50 million to design to the outside world obviously meant that there was a huge problem in Xpeng's internal management system. But in fact, before this, Xpeng's sales have shown a downward trend, from more than 40,000 units in 2021Q4 all the way down. In the month of the G9's release, Xpeng sold only 8,468 vehicles in total.
The G9 defeat was indeed an opportunity to some extent, and He Xiaopeng took advantage of this to carry out a drastic reform of the company.
Five months ago, on October 21, he issued a speech similar to "guilt and edict" at the company's all-online meeting, fiercely attacking Xpeng's three problems: first, sloppy decision-making and ignoring user needs; Second, the organizational structure is chaotic and the rights and responsibilities are not clear; Third, the implementation efficiency is inefficient and there are many departmental walls. Subsequently, Xpeng Motors set up a number of committees to pull together the collaboration of various business lines, and established a full-service closed loop through the product matrix of the three platforms of E/F/H.
However, it is difficult to say how much room for Xpeng Motors to adjust under the current market structure and competition situation. In January, Tesla raised the threshold for the entry-level Model 3 to 230,000. Then a number of new energy vehicle companies followed up, and even NIO, which has always claimed to be "responsible for old users", also provided discounts in different ways. Musk later released news at the "2023 Tesla Investor Day", saying that the cost of Tesla's next generation of model manufacturing can be reduced by as little as 50%.
However, Xpeng does not seem to be touched by the price war of peers, and the latest P7i model has increased the price and increased the price, and the starting sales threshold has been raised by 40,000. On the one hand, this may be to form a ladder match with the old P7, and on the other hand, it may be because Xiaopeng really has no room for price reduction. According to the financial report, Xpeng's gross profit margin in the fourth quarter of last year was only 8.7%, down sharply from 13.5% in the previous quarter and hitting a new low in nearly six quarters.
Another factor that has compressed Xpeng's price maneuver is Xpeng's relatively low operating efficiency. In the past 2022, due to the intensification of industry competition, Wei Xiaoli's sales, general and administrative expenses (SG&A) have all risen significantly. But even so, Xpeng's SG&A fee proportion is still significantly higher than the other two: Xpeng's 25% SG&A fee in 2022 is just twice the ideal 12.5%.
These factors are finally reflected in the financial indicators, that is, Xpeng's net loss for the whole year of 2022 reached 9.14 billion yuan, an increase of 88% compared with 2021, and the cash on the books has been slowly lost.
02 High-end hardware is standard, and autonomous driving is inclusive
The new forces of car manufacturing are more or less inherited from Tesla, but the degree is slightly different, and He Xiaopeng is certainly no exception.
In 2017, He Xiaopeng officially resigned from Alibaba, transforming from an angel investor in Xpeng Motors to the chairman and CEO of Xpeng Motors. His first major move after taking office was to rush to North America to prepare for the establishment of an intelligent technology self-research team.
Later, according to a number of early North American employees, He Xiaopeng's strategy at that time was very simple, that is, "benchmarking against Tesla". In order to recruit a strong technical leader, he himself went to Silicon Valley twice to invite former Tesla Autopilot senior engineer Gu Junli, who eventually joined Xpeng to build the initial self-driving research and development team.
He Xiaopeng's dedication in technology has finally yielded considerable results, and now the leading electric and intelligent level has become a more significant label of Xpeng Motors. In the view of Xpeng Motors' management, fully autonomous driving is the company's core differentiator. At the earnings conference, He Xiaopeng also revealed the technological progress of autonomous driving:
"In the second half of this year, based on Xpeng's breakthrough in deep learning algorithms, XNGP will no longer rely on high-definition maps, which can achieve road coverage for dozens of cities across the country. From our current testing results, the new version of XNGP clearly exceeds the actual use of similar technology in the United States. I believe that Xpeng's autonomous driving technology and user experience will also usher in an inflection point. ”
Focused, the American friends here obviously refer to Tesla, which means that Xpeng has equaled or even surpassed Tesla's automatic driving capabilities in 2022.
What does this mean? Li Xiang mentioned at this month's ideal car 2023 spring media conference that he believes that after 2024, at least mid-to-high-end cars, if they cannot provide urban NOA, will affect consumers' purchase decisions. The automotive industry will completely enter the era of intelligent electric vehicles, otherwise it will only sell non-intelligent electric vehicles.
He also revealed that these companies using the Orin computing platform will basically not deliver the earliest NOA for testing until the fourth quarter of this year. He personally believes that by the end of this year, most of the leading companies will be able to reach the level of Tesla at the end of 2021; By 2024, we can generally achieve the level of Tesla in North America at the end of 2022 and the beginning of 2023.
Therefore, for Xpeng Motors, the self-driving technology that is obviously stronger than its competitors will play a unique advantage in the future. In the words of He Xiaopeng: "If the past five years are the golden five years of new energy, I believe the next five years will be the golden five years of fully autonomous driving." ”
However, in the past period, Xpeng Motors did not seem to consider how to maximize its technical advantages in product planning and design.
Unlike Tesla, which made FSD hardware standard, Xpeng's advanced driving assistance functions were previously tied to hardware. For example, the previous best-selling P7 480G model did not have hardware for advanced copy driving, and the most basic adaptive cruise function was not available, even if users wanted to purchase XNGP function on a subscription basis.
This design idea has been continued on the later G9 model: the 310,000 yuan version of the G9 is not equipped with intelligent driving, and even the most basic lane keeping function is not available. Later, Xpeng's product planning team explained that the reason why the previous car, P7, sold well was because the cheaper entry-level model sold more.
However, He Xiaopeng eventually realized the problem. On the just-released P7i model, both the Orin chip and the high-speed NGP have become standard. At the earnings conference, he also said that he would adjust the configuration combination in subsequent models, including new models and facelifted models, and unify the modular design of the whole vehicle and the intelligent consistent design.
It's just that the question is, is it too late to start "technology inclusion" now?
03 is written at the end
Recently, there are rumors in the market that a new car company may not be able to pay wages by June this year, and now it is beginning to owe suppliers money. Judging from the discussion, many people pointed to Xpeng Motors, and not long before, there were rumors that Xpeng could not get the goods, causing suppliers to sell materials at low prices, but they were finally refuted by Xpeng.
Obviously, at least from the perspective of market sentiment, the outside world's confidence in Xiaopeng to survive the difficult time is somewhat insufficient. However, in the discussion of the first part of the "New Position", Xpeng Motors' cash reserves have already been discussed: as of December 31 last year, Xpeng still had 38.25 billion yuan in cash and liquidable current assets on its books. Although this indicator has been showing a slow decline in the past few quarters, it is still relatively stable and should be fully sufficient to cover more than 20 billion current liabilities.
But this does not mean that Xpeng Motors will be able to escape danger, because it needs to think about how to survive the extremely fierce industry price war that has arrived. According to He Xiaopeng's own prediction, the Chinese market will eventually need 3 million deliveries per year to not go out of business, and Xpeng Motors still has a rather difficult and long road.
*The title image and the accompanying picture in the text are from the Internet.
![He Xiaopeng: In 2023, Xpeng will launch 5 new cars / 3 previously planned[fig]](data:image/gif;base64,R0lGODlhAQABAIAAAP///wAAACwAAAAAAQABAAACAkQBADs=)