*Author: Qiukaijun
If Li Xiang, Li Bin, and He XPeng were put in a room together, He XPeng might be the most inconspicuous one.
Li Bin has a tall stature and a high prestige, always surrounded by people.
Li Xiang gained fame in his youth, looking down upon the world and speaking quickly.
What about He XPeng?
Not only is he shorter than them, but his voice is also softer, and he has an innocent-looking face.
However, XPeng is now firmly in the “New Forces of Car Manufacturing Top Three” and has moved up a level above other new forces of car manufacturing.
Many people may mistakenly think that the “New Forces of Car Manufacturing Top Three” comes from the “designated” choice of Meituan’s Wang Xing. In fact, Wang Xing is undoubtedly influenced by his own investment in Li Xiang.
If I remember correctly, before He XPeng officially joined XPeng Motors, someone asked Li Xiang, who are your competitors?
Li Xiang brought up Li Bin and NIO. He also mentioned XPeng Motors, on the premise that – if He XPeng personally went out to create cars.
Why does Li Xiang “respect” He XPeng as a competitor?
He XPeng’s experience can make any opponent not to be underestimated – the establishment of UC优视, $4 billion acquisition by Alibaba, serving as the general manager of Alibaba’s mobile business group and chairman of Alibaba Games…
Li Xiang and Li Bin have their “killer weapons”, and He XPeng has his as well. Moreover, He XPeng honed his weapons in a more ruthless competition than Li Bin and Li Xiang.
With his own methodology, He XPeng managed XPeng Motors for more than three years, causing it to rapidly climb up the ranks. Just recently, He XPeng said that XPeng Motors “leads the technological innovation of China’s intelligent electric vehicles”.
He XPeng said this during XPeng Motors’ financial report conference call on March 8th.
That day, XPeng Motors released its 2020 financial report, with total revenue of 5.844 billion yuan for the full year of 2020, a year-on-year growth of 151.8%. Most importantly, it achieved positive gross profit (4.6%) for the full year of 2020.
XPeng Motors’ 2020 financial report performance, as well as the information revealed by He XPeng during the conference call, can help us understand how XPeng Motors has established itself.
Li Xiang and Li Bin brought us a fresh look into internet car manufacturing. XPeng Motors demonstrates the characteristics of internet products, from a minimum viable product, by rapidly learning and iterating, one may surpass powerful opponents.
Positive Gross Profit
Similar to Ideanomics and NIO, XPeng Motors’ 2020 financial report has many highlights. The first thing that catches the eye is a series of significant growth:
The total delivery volume for the 2020 fiscal year reached 27,041 units, a growth of 112.5% compared to 12,728 units in 2019.
The total revenue for the 2020 fiscal year was 5.844 billion yuan, a growth of 151.8% compared to 2.321 billion yuan in 2019.
The net loss for the 2020 fiscal year was RMB 2.732 billion, compared to RMB 3.692 billion in the previous fiscal year.Although the loss amount is still significant, XPeng Motors has achieved an annual gross profit: the gross profit margin for the 2020 fiscal year was 4.6%, compared to -24.0% in the previous fiscal year.
XiaoPeng P7 turned the tide. This intelligent electric vehicle was launched in April 2020 and began delivery in July, with a total delivery of 15,000 units for the year.
“We ended 2020 with strong momentum, led by the rapid growth in delivery volume of our second intelligent electric vehicle, P7, and achieved strong operational and financial performance for the year.” said He XPeng.
The momentum of the XPeng P7 continues. XPeng delivered 3,691 units in January and 1,409 units in February. By February, cumulative deliveries reached 20,181 units, making it the fastest new carmaker to deliver over 20,000 units of a single model.
The XPeng Motors 2020 report is not limited to this.
Perhaps the software aspect of the results is even more significant:
In October 2020, XPeng Motors upgraded the second-generation intelligent cockpit system OTA, including the self-developed and industry’s first full-scenario voice system.
On January 26, 2021, XPeng pushed the first OTA version of the full-stack self-developed XPILOT 3.0, i.e., the NGP high-speed automatic navigation assistance driving system.
XPeng Motors ‘progress in sales and charging also is quick:
At the end of December 2020, 160 sales points were reached nationwide, and 54 service outlets covered 69 cities.
By the end of December 2020, XPeng Super Charging Station had operated 159 stations covering 54 cities.
In December 2020, the first batch of European G3s were delivered in Norway.
The production upgrade of XPeng Motors is also fast:
The Guangzhou production base has started construction and is expected to start production in the third quarter of 2022. The production capacity of the Zhaoqing factory continues to increase, laying a foundation for a single-month capacity of 10,000 vehicles within the year.
New cars keep coming
In 2021, XPeng Motors’ pace is still fast.
He XPeng announced a series of new car plans:
In March, the Pengyi version of the P7, which was unveiled at the Guangzhou International Auto Show, will begin delivery.
In April and May, the G3 and P7 with lithium iron phosphate batteries will begin delivery.# Q2: New Models & XPILOT 3.5
In Q2, XPeng Motors will release and begin selling its 3rd mass-produced model. “This model is also the world’s first mass-produced car equipped with Lidar, and it will support XPILOT 3.5. It will also support a brand-new and innovative 3rd-generation smart cockpit, making the car more closely connected to users’ daily lives,” said He XPeng. Based on the information currently available, this car should be the sibling model of the XPeng P7, known as the XPeng P5.
Q3: G3 Mid-Term Facelift
In Q3, XPeng Motors will begin delivering the mid-term facelift of its G3.
Q4: XPeng P5 Delivery
In Q4, XPeng Motors will start delivering its third mass-produced model, the XPeng P5.
2022: XPeng’s Fourth Car
In 2022, XPeng Motors will launch its fourth car.
In the era of software-defined cars, a once unchanged car can become a brand new car through a single software update.
During the earnings conference call, a question was raised about the accelerated iteration timeline of XPeng’s autonomous driving version. Will XPILOT 3.5, originally planned for release in 2022, be launched by the end of this year? Will XPILOT 4.0, originally planned for release in 2023, be launched in 2022?
When asked, He XPeng confirmed the accelerated iteration timeline for autonomous driving. “With the development of our XPILOT 3.0, we are more confident in XPILOT 3.5, 4.0, and even 5.0 in the future, and relative to the original plan, these will be launched earlier.”
XPILOT 3.5, which will be launched with XPeng’s third car, is the first to adopt Lidar. “Based on the fusion of our visual perception, with Lidar as a supplement, XPeng’s products will have the comprehensive ability of NGP on city main roads.”
XPILOT 4.0, which will be launched with XPeng’s fourth car in 2022, “we are very confident XPILOT 4.0 will bring a disruptive experience of a new generation of high-level automatic assistance systems.”
The accelerated iteration and application of automatic driving assistance systems are based on “a large amount of usage data from our 3.0.” He XPeng revealed that as of the end of February, NGP had been activated on about 20% of the batch sales of the P7. In February, the XPeng NGP penetration rate, which is the current NGP usage mileage divided by the total mileage available, exceeded 50%.
“Since OTA, NGP has helped our users drive 1.3 million kilometers. Through the closed loop of data between users’ actual driving and our data, we can continuously train and quickly iterate, optimize our algorithms, and provide our users with automatic driving assistance systems that can continuously evolve in the Chinese driving scene.”“`
2021 Accelerating R&D
“Looking forward to 2021, XPeng will continue to provide our customers with more intelligent and differentiated products through rapid software and hardware iteration and technological innovation.”
He XPeng said: “At the same time, we will invest in our brand, sales and service networks, charging networks, to develop a new intelligent system, a three-electric system, enhance production capacity and supply chain capabilities, and also in international business And innovative product lines including flying cars, we will conduct research and development to support our higher-speed growth in the next few years.”
In addition to the hardware and software products mentioned earlier, XPeng’s plans for 2021 include:
By the end of 2021, the total number of sales outlets will be increased to around 300, covering over 110 cities.
Significantly improve XPeng’s brand’s supercharging network in 2021, and reach more than 500 supercharging stations by the end of the year. In 2021, more than 200 cities will provide XPeng’s lifetime free charging service, and expand XPeng car owners’ charging experience in high-speed, airport, shopping malls and other scenarios.
People familiar with XPeng Automobile know that XPeng Automobile has fluctuated in the construction of self-built charging stations and even suspended construction at one point. However, after He XPeng confirmed the new brand supercharging station construction goals and models, it presented a trend of rapid layout.
The decisive struggle is certainly R&D.
In XPeng’s 2020 financial report, there was a slight unexpected decline – R&D expenses were 1.726 billion yuan, a 16.6% decrease from 20.70 billion yuan in 2019. XPeng Automobile’s financial report explained that the reason was the high expenditure in developing XPeng P7 in 2019.
However, continued expansion of R&D investment should be a necessary requirement for enterprises to develop rapidly. He XPeng said:
“`# 2021, there will be a considerable increase in R&D investment for XPeng Motors compared to 2020, with a focus on intelligence-related technologies, including software, data, algorithms, internationalization of autonomous driving, as well as transformation in the fourth generation of autonomous driving technology and driving hardware. We are making significant investment in these areas.
By the end of 2021, the number of R&D personnel will probably double compared to before. “At the same time, we will also place a large number of R&D personnel in our ecosystem.”
Fast, how fast?
Fast, fast, fast… “Fast” is the keyword for XPeng Motors in 2020 and 2021.
It is said that “speed is the only undefeated in the world.” But if you “blindly rush” on the wrong path, you will only accelerate your destruction.
Only by trying out quickly, recognizing mistakes quickly, making adjustments quickly, and continuously acting fast can one be truly fast.
Looking back at the competition history among the top three new car makers, XPeng’s first car, the G3, performed far from ideal compared to Nio’s first product. This was also a burden that CEO He XPeng, an “outsider” had to face. However, the P7, defined by the extraordinary product manager, has a good reputation and sales; many believe its autonomous driving is second only to Tesla. The P5 will be the first mass-produced car equipped with a lidar. This demonstrates the speed at which XPeng Motors catches up.
In addition, XPeng Motors has also seized a big banner: the only whole-stack self-developed autonomous driving software and intelligent cockpit car maker in China. This is a result of XPeng Motors’ strategic deployment, which has just been announced to the industry. This demonstrates the depth of XPeng Motors’ foresight.
In the race of intelligent electric vehicles, the starting gun has just gone off, and in the subsequent competition, players need to grow exponentially in order to become stronger quickly and continuously, to beat their opponents. For command post holders like He XPeng, their momentum is definitely strong. Li Xiang and Li Bin must have seen this coming too.
In the era of intelligent electric vehicles, it is also a joy to watch the competition among He XPeng, Li Xiang, and Li Bin.
This article is a translation by ChatGPT of a Chinese report from 42HOW. If you have any questions about it, please email bd@42how.com.