In the difficult year of 2023, Xiaopeng has had a pretty good ending.
For Xpeng Motors, this year is a year of breaking new ground. They have made adjustments in organization, planning, business, operation, efficiency and other aspects. Although they have experienced pain, the results have begun to show.
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In terms of delivery, Xpeng Motors has experienced a wave of ups and downs. In January 2023, they delivered 2,249 vehicles, which was their lowest moment of the year. However, after 11 months of hard work, the delivery volume increased by 9 times, and by December 2023, Xpeng Motors achieved a delivery figure of 20,115 vehicles. The cumulative delivery volume for the whole year reached 142,000 vehicles, a year-on-year increase of 16.7%.
Xpeng Motors' performance in 2023 | Image source: Financial report screenshot
This has also driven the growth of Xpeng Motors’ revenue. In 2023, Xpeng's total annual revenue will reach 30.68 billion yuan, a year-on-year increase of 14.2%. Among them, automobile sales revenue was 28.01 billion yuan, an increase of 12.8% compared with last year. This growth was mainly due to the substantial growth in the fourth quarter, which achieved revenue of 13.05 billion yuan, a year-on-year increase of 153.9%.
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Although Xpeng Motors will still be in the red in 2023, the adjustments and efforts they have made this year have begun to show results. Data shows that Xpeng Motors' losses expanded to 10.38 billion yuan in 2023, but in the fourth quarter, the losses dropped significantly compared with previous quarters.
Has Xpeng Motors bottomed out? He Xiaopeng said that from 2024 to 2027, China’s smart electric vehicle elimination competition will officially begin. How will they respond?
Q4 gross profit margin performance exceeded expectations
In May 2023, He Xiaopeng said in the first quarter financial report conference call that with the launch of G6 and other new products, Xiaopeng Motors' sales will grow rapidly, and he expects to achieve monthly deliveries of more than 20,000 in the fourth quarter of 2023. station, and expects operating cash flow to also turn positive.
Xpeng’s current mass-produced models | Image source: Xpeng
Today, Xpeng Motors has successfully achieved these two goals. In the fourth quarter of 2023, Xpeng Motors delivered a total of 60,158 new cars. This achievement pushed automobile sales revenue to expand 1.7 times year-on-year, exceeding 10 billion yuan in a single quarter for the first time.
At the same time, in the fourth quarter, Xpeng Motors' positive free cash flow exceeded 6 billion yuan, achieving positive operating cash flow for the whole year for the first time. As of the end of the fourth quarter, Xpeng Motors' cash reserves reached 45.7 billion yuan, a quarter-on-quarter net increase of more than 9.2 billion yuan.
In the latest financial report, the most surprising thing about Xpeng Motors is that the gross profit margin of automobiles turned positive in the fourth quarter, increasing by about 10 percentage points from the previous quarter.
Xpeng Motors' automotive gross margin has long been a hot topic, as it has been negative for quite some time. In the first three quarters of 2023, Xpeng Motors' automotive gross profit margins were -2.5%, -8.6% and -6.1% respectively.
However, the latest data shows that Xpeng Motors' gross profit margin in the fourth quarter reached 6.2%, of which the gross profit margin of the automobile sales business was 4.1%. Although these two indicators fell by 2.5 percentage points and 1.6 percentage points respectively compared with the same period last year, they increased by 8.9 percentage points and 10.2 percentage points respectively compared with the previous quarter.
Xpeng Motors explained that the year-on-year decline in automobile gross profit margin was mainly due to the loss of inventory provisions and purchase commitments caused by the upgrade of existing models, the increase in sales promotions and the expiration of new energy vehicle subsidies; while the month-on-month increase was mainly due to the Benefiting from platform research and development, technology cost reduction and operational improvement, as well as the increase in delivery scale, especially the impact of the increase in the sales proportion of high-margin models such as G6/G9.
However, despite its progress, Xpeng Motors still lags behind its competitors.In 2023, the gross profit margins of Li Auto and NIO will be 22.2% and 5.5% respectively, while Tesla's global gross profit margin will also reach 18.2%; in comparison, Xpeng's gross profit margin for the whole year of 2023 will be only 1.5% %.
Another point worthy of attention is that Xpeng Motors' losses are narrowing.
Data shows that in 2023, Xpeng Motors' net loss reached 10.38 billion yuan; an increase from 9.14 billion yuan in 2022, but lower than market expectations, especially the loss in the fourth quarter was significantly higher than in previous quarters. reduce.
Broken down, in the first three quarters of 2023, Xpeng Motors' net losses were 2.337 billion yuan, 2.805 billion yuan and 3.89 billion yuan respectively. However, in the fourth quarter, Xpeng Motors' net loss was 1.348 billion yuan, a year-on-year decrease of 1.01 billion yuan and a quarter-on-quarter decrease of 2.54 billion yuan.
The improvement in these financial report data is closely related to Xpeng Motors' cost reduction and efficiency increase last year. At the second quarter financial report meeting in 2023, He Xiaopeng said that cost reduction and efficiency improvement are the key words of Xpeng Motors in the next stage. They benchmark against the best cost control levels among global and Chinese car companies, and regard cost reduction as one of the core goals of multiple teams including product, R&D, manufacturing, supply chain, and marketing.
This is also directly reflected in the financial report data. Although deliveries are up 16.7% in 2023, Xpeng's expense ratio is declining. Xpeng's R&D expenditure in 2023 will be 5.28 billion yuan, an increase of only 1.2% from last year; sales, general and administrative expenses will be 6.56 billion yuan, a decrease of 1.91% from last year.
Specifically, in the fourth quarter, Xpeng's R&D and sales, general and administrative expenses were 1.308 billion yuan and 1.937 billion yuan respectively. R&D expenses were basically the same compared to the previous quarter, and the corresponding expense rates were 10% and 15% respectively, both of which fell sharply year-on-year.
At the same time, Xpeng Motors’ staff size has also been reduced. At the end of 2023, Xpeng's total number of employees was 13,500, a decrease of about 2,300 from half a year ago. In contrast, Li Auto increased its headcount by more than 10,000 employees during the same period.
The first goal of the new brand is to sell over 10,000 units per month
In 2024, Xpeng Motors has set a goal of doubling its performance. He Xiaopeng said in the Spring Festival start letter: “This is Xiaopeng's tenth year. To more than double our performance, we need to make up for all shortcomings.” According to previous media reports, in 2024, Xiaopeng Motors' delivery target is 28 Thousands of vehicles.
However, in early 2024, Xpeng Motors' delivery volume did not improve. Data shows that Xpeng Motors sold 12,795 vehicles in the first two months. Although it increased by 13% year-on-year, this was mainly due to a relatively low base in the same period last year. Compared with the monthly sales of 20,000 vehicles in the fourth quarter of last year, there is still a large gap in this year's sales.
In view of this situation, Xpeng Motors has given more cautious revenue and delivery expectations. Xpeng predicts that car delivery volume in the first quarter of this year is expected to be between 21,000 and 22,500 vehicles, a year-on-year increase of 15.2% to 23.4%. To fulfill the above guidance, Xpeng Motors needs to deliver at least 8,205 vehicles in March, which is not a high number. However, this also means that Xpeng Motors will grow significantly in the next three quarters.
While responding to challenges, Xpeng Motors is also seeking new breakthroughs. The launch of its sub-brand MONA is considered one of the key initiatives. Last weekend, He Xiaopeng announced at the China Electric Vehicles 100 Forum that he would launch a new brand MONA in the next month, officially entering the global market of A-class cars with a price of 100,000-150,000 yuan, aiming to create “young people's first car”. AI smart driving car”.
At the financial report conference, He Xiaopeng further revealed that the new brand will make its debut during the Beijing Auto Show next month, and is scheduled to begin launch and delivery in the third quarter.
The reason for launching a new brand now, He Xiaopeng said at the financial report meeting, is that although the market potential in the price range of 100,000-150,000 yuan is huge, it is very difficult to launch high-quality, high-performance and profitable models in this range, which requires companies to have Strong scale and systematization capabilities. Now, Xpeng Motors believes they are ready.
For this new car, He Xiaopeng set a flag: “I am confident that it will become the most eye-catching hot new model in the A-class pure electric market this year.”
It is understood that MONA will target both the To B and To C markets, and will first enter the C side, and then gradually expand to other channels. Regarding the sales target of the new brand, the official did not disclose specific figures. But Xpeng executives said, “We provide about 10,000 products every month. Only at this scale will we consider it very successful.”
2023 Xpeng 1024 Technology Day | Image source: Xpeng Motors
In addition, intelligent driving, supported by large-model technology, has also reached a key breakthrough point, which has also become the focus of competition among car companies. He Xiaopeng, chairman of Xpeng Motors, said that large models have brought significant changes in the field of intelligent driving. These large-scale models enable faster improvements in general intelligence capabilities that were previously difficult to solve. Xpeng Motors began relevant research and development last year and achieved positive results in this year's testing.
At last year’s 1024 Technology Day event, Xiaopeng made a commitment to “put large AI models on cars.” Recently, Xpeng Motors said that in the second quarter of this year, it will realize mass production of large-scale AI intelligent driving models and become the first automotive artificial intelligence and automotive cognitive engine to be mass-produced in the automotive industry.
Behind this achievement is Xpeng Motors’ long-term investment in artificial intelligence. At the launch conference of Xpeng Intelligent Driving in the New Year, He Xiaopeng said that Xpeng Motors invests 3.5 billion yuan in AI research and development every year and has more than 3,000 R&D team members.
2024 is the tenth year since Xpeng was founded, and the second year of its “self-subversion and second entrepreneurial start-up”. Xpeng Motors will continue to face fierce market competition, especially in the context of the elimination competition in the new energy vehicle market.They need to achieve their long-term development goals through product innovation, market expansion, and organizational efficiency improvements.