XPeng Motors released its financial report for the second quarter of 2024 today: The total revenue was 8.11 billion yuan, an increase of 60.2% year-on-year and 23.9% quarter-on-quarter. The net loss was 1.28 billion yuan, while the net loss in the same period last year was 2.80 billion yuan, and the net loss in the previous quarter was 1.37 billion yuan. Excluding non-GAAP adjustments, the adjusted net loss was 1.22 billion yuan, while the net loss in the same period last year was 2.67 billion yuan, and the net loss in the previous quarter was 1.41 billion yuan.
After the release of the financial report, XPeng Motors' co-founder, chairman and CEO He Xiaopeng, vice chairman and president Gu Hongdi, financial vice president Charles Zhang, and financial and accounting vice president Wu Jiaming attended the subsequent earnings conference call to interpret the key points of the financial report and answer analysts' questions.
Tim Hsiao, an analyst from Morgan Stanley: Firstly, congratulations on the strong delivery growth in the third quarter under the new car cycle.
I have two questions. The first question is about new car sales. According to XPeng Motors' guidance for the third quarter, due to the contribution of the XPeng M03 in September and the increase in exports, the monthly delivery can return to the previous high, and considering the subsequent XPeng P7+, the monthly (delivery volume) in the fourth quarter may even challenge the level of 30,000.
However, while we see the alternation between the new and old platforms, how does the management think that compared to the several models launched in the past, how does XPeng Motors consolidate the delivery volume of the new models? How can the delivery volume of the new models maintain a relatively long-term growth momentum? Avoiding a situation like last year - after the honeymoon period of the new car last year, the sales showed a relatively obvious slowdown, or the sales showed a pulsed fluctuation with promotional activities.
He Xiaopeng: Actually, this is also one of the most important issues for us (to solve). There is a calligraphy in my office with four words written on it, called Steady and Far-reaching. These four words are also what XPeng Motors has been demanding of itself since the second half of this year. To be honest, it is very difficult to achieve Steady and Far-reaching in a fiercely changing market environment.
From a certain perspective, I think the impact next year, including the impact of gasoline cars, will be even more severe than this year.
So we have done a lot of things in this regard, including changes in supply chain management, the overall supply chain platformization, our requirements for production quality, whether it is the MONA or the XPeng P7+ of XPeng Motors, we have raised to a very high-level production quality requirement. For the monthly OTA, for the micro facelift according to the constantly changing customer experience every small period of time, for the annual model and the entire marketing system and channel system, we are all moving forward in the direction of Steady and Far-reaching. At the same time, in our current rolling 12-month production, supply and marketing plan, which all take into account the competition, consider our new cars, and the problems in the alternation and overlap between different models of the modified cars.
Therefore, in the current situation, we are definitely more confident than last year and the year before. We expect to be able to follow our plan (execution) in every quarter in the future and be able to implement the whole plan more accurately and realize the logic of the overall Steady and Far-reaching.
Gu Hongdi: I would like to add a few more points.
Firstly, I agree with your statement. When we gave the delivery guidance for the third quarter, we expected the delive ry volume to be around 20,000 units per month. That is to say, the monthly delivery volume in the third quarter will reach a historical new high. And to achieve this goal, there are many driving factors behind it, including that we see a very good response to the MONA in the market, which makes us very excited. Considering the current order trend and the preparations mentioned by Mr. He (He Xiaopeng) just now, we are very confident that the XPeng MONA will achieve delivery in the first month. Starting from September, the XPeng MONA will become the fastest electric car model among all electric car start-ups in delivery. We are confident that the MONA can create an industry record.
Another point I want to emphasize is that our delivery volume growth also includes a significant growth in overseas market delivery volume. As you can see, in the second quarter, our product delivery volume in the overseas market exceeded 10%, and we expect that the overseas delivery volume in the third quarter may reach around 15%. The performance of the overseas market also means that our orders are more diversified. All these make us more confident that the delivery goals set for the third and fourth quarters can be achieved.
Tim Hsiao, an analyst from Morgan Stanley: My second question is about intelligent driving, that is, intelligent driving. Just now, Mr. XPeng also mentioned XPeng Motors' large-scale investment in the end-to-end large model of AI and intelligent driving, which has enabled XPeng Motors to show very outstanding achievements in intelligent driving ability and full-volume opening across the country in the past period of time. But if we look at it from the perspective of business return, when does the management expect that the upper limit of XPeng Motors' intelligent driving ability can become the threshold of the same industry? When can the intelligent driving ability of XPeng Motors be further accelerated to become the driving force to promote the increase of XPeng Motors' new car sales? In addition, can the management provide us with some observation indicators, such as the user mileage penetration rate or the point-to-point implementation mentioned by Mr. XPeng in the briefing?
He Xiaopeng: After the 5.2 version was pushed, we can see some very good data changes.
First, the usage penetration rate, mileage penetration rate and other core indicators of all users have at least a significant increase of 20%. Second, some of our stores previously couldn't test the XPeng intelligent assisted driving system XNGP in the city, but now all our stores can test, which can help users understand our differentiated advantages better.
From my point of view, today only XPeng Motors supports end-to-end autonomous driving landing in China, and other companies are just announcing that they will support it later. Just now I also mentioned that there are two challenges.
The first challenge is that the end-to-end raises the upper limit, but how to hold the lower limit? This requires a lot of work. This also leads to quite a big adjustment for the whole XPeng Motors, we have to ensure that the lower limit is high enough. The second challenge is, for example, in the past we had to test in various places; but now with the realization of end-to-end, we can see from the trend that we can drive in every place like a local veteran driver, just like a local veteran driver is driving. But it will also bring challenges, maybe the logic of the rule-based + small AI model in some areas will perform better. So the (intelligent driving) ability in some areas may even have a certain pullback.
But from the trend point of view, I still firmly believe that this year will be a turning point. By a certain time next year, I think the automatic assisted driving of XPeng Motors will be several times to more than ten times higher than now. By that time, I believe (the automatic assisted driving of XPeng Motors) will bring huge sales changes from a commercial perspective. At t he same time, combined with the cost competitiveness advantage of the brand-new generation of hardware platform首发 by the XPeng P7+ at the end of this year, I believe there will be more customers who can experience more advanced automation with an affordable cost. I believe these will bring us a huge turning point next year.