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| Statement |
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| By adopting a platform based R&D approach and economies of scale, we can reduce costs in the supply chain and manufacturing processes, which can accelerate our goal of achieving over 25% cost reduction |
| X9 became the best-selling model of BEV with three -- with three rows of seats in just the first two months of delivery |
| In Q4, our gross margin improved to 6.2% with a vehicle margin expansion of 10 percentage points compared to the previous quarter |
| Our company achieved a positive free cash flow of more than RMB6 billion for the second half of 2023 and achieved for the first time positive full-year operating cash flow |
| As of the end of 2023, we had over RMB45 billion in cash, which puts us in a strong financial position to deliver high quality and rapid growth in a highly competitive environment |
| We made significant improvement in the quality of our operations and fully closed-loop customer experience |
| And what we have discovered is that, with the large model OEMs, it definitely would be able to provide more computing power and more CPU and this would be able to help and push for the faster and better achievement in our vehicles and to bring the success faster to the market |
| We have created an innovative business model in the automotive industry, generating excellent returns on our R&D investment in electrification, intelligent driving and AI technology |
| We are proud to be the industry leader in terms of active user scale, user experience and mileage penetration rate |
| For MONA, I think it's a -- like I said, it's a very exciting product |
| On the cash front, we've achieved an important milestone of operating cash flow positive for the full year of 2023 |
| As I formulated our strategies and tactics for the knockout ground of EV competition, I am excited about the strategic opportunities underway |
| We have completed the framework of our organizational adjustment, which starts to deliver positive results |
| We are about to embark on a strong product cycle and launch more than 10 new vehicle models over the next three years |
| So it is definitely an advantage and we have already done the testing and it has already approved this |
| And second, in terms of our [indiscernible] products and we now have standardized modules, generally speaking and we have about one to two partners who provide us with these modules that can be used in quite a broad spectrum of different models of cars, and this will improve the efficiency and bring down the cost as well as ensure the quality |
| This will be a strong foundation to support our growth strategy in the years to come |
| The upcoming competition isn't solely focused on gaining a larger market share in the short term, it is also about demonstrating the auto makers capacity to maintain its leadership position by achieving high quality and efficient growth, showcasing expertise in smart technology, expanding globally, and creating competitive advantages through innovative products and business models |
| I would still say that we are a company that is more specialized in vehicle and autonomous driving is really our strength and this is our uniqueness |
| This presents a tremendous opportunity for us |
| We are confident that it will be the most striking and sought after A Class BEV model in this segment |
| Through marketing innovation, we should not only achieve a substantial increase in word-of-mouth in sales leads, but also continuously strengthen XPeng's brand recognition as a leader in autonomous driving technology |
| Our aim is to significantly boost our smart EV's competitiveness in terms of cost, accelerating the widespread adoption of advanced smart technologies |
| And through the joint procurement program, also leveraging Volkswagen's world class supply chain capabilities, we have seen the initial good results coming out of from the joint sourcing program |
| I’d say that, both companies have out unique advantages and for XPeng and in terms of what we have done and we really started working more on our brand as well as our marketing from end of last year |
| In February, XNGP's monthly active user penetration rate reached an impressive 83% |
| And in the next 18 months, in addition, I do believe that huge changes will be brought by with the large model being applied to autonomous driving and this is something that we should watch out for and we believe that this will bring great benefits to the industry |
| And it is the recurring -- once it started to recorded in our P&L, it will be a recurring revenue and will have meaningful impact -- meaningfully positive impact to our GP margin |
| Xiaopeng He [Foreign Language] [interrupted] Hello everyone, I am pleased to share that XPeng experienced impressive growth in our delivery volume quarter-by-quarter in 2023, which exceeded 60,000 in Q4, up 171% year-over-year, thanks to our proactive change to business strategy and organizational structure, as well as the new product launches |
| The reason we think there's a potential is because: one, we think it's a very well designed product, it has, I think, I would say, best-in-class design as well as in some of the functions, especially as it related to smart functions |
| Statement |
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| We also think this year will be similar to last year in terms of our -- first half will be light, given obviously the industry dynamic as well as our product launch schedules |
| We faced intensified competition and the above mentioned adjustments in marketing and sales channel in the first quarter |
| To take our XNGP assisted driving experience to the next level, we have set a challenging goal for ourselves |
| If you do it the other way around, if you start with scale first and it would be very difficult to improve the quality |
| So with such an intense launch schedule, what would you do to avoid the capitalization from the new product and keep the sales momentum of the whole lineup? As over the past few years, we noticed that whenever XPeng launch the new cars, the sales of the old model always decline |
| Against this backdrop, several EV startups have been forced to wind down their operations, and certain renowned technology companies have terminated their investment in auto business |
| The market of the RMB100,000 to RMB150,000 price range has huge market potential, but it is extremely difficult to provide great products with all around competitiveness, including high level ADAS in this price range and even more difficult to achieve a probability at the same time |
| As we noticed that competition on the vehicle prices and new products has been getting fiercer year to date |
| And in the past, we have had situations whereby once a product has been launched into market, however, the supply chain wasn't strong enough to cope with the demand for delivery |
| And yes indeed in the past we have also encountered similar issues |
| So in terms of the supply chain issue that you had mentioned encountered by X9 end of February after Chinese New Year, this problem has already been resolved |
| As I talked earlier, last quarter of 2023, we had terminated 130 dealers, and those were the underperforming ones |
| But I think, as you can tell, to be a successful product in the A class category, I think you will have to deliver on a sort of range around about 10,000 a month type of scale to be successful |
| Since the first quarter of the year, there has been an industry-wide price war, which has been growing increasingly fierce |
| The year-over-year decrease was explained by: first, the inventory provisions and losses on purchase commitments as a result of upgrades of existing models with a negative impact of 1.9 percentage points; and secondly, increased sales promotions and the expiry of new energy vehicle subsidies, offset partially by cost reduction and improvements in product mix |
| Vehicle margin was 4.1% for the fourth quarter of 2023 compared with 5.7% for the same period of 2022 and negative 6.1% for the third quarter of 2023 |
| Tina Hou [Foreign Language] So my second question is regarding, I think in the February delivery report, we mentioned that there were some supply chain bottleneck regarding to X9 before the Chinese New Year |
| Gross margin was 6.2% for the fourth quarter of 2023 compared with 8.7% for the same period of 2022 and negative 2.7% for the third quarter of 2023 |
| And however, in terms of the general public demand it is not quite yet met and this is something that we need to work hard on in the next 18 months |
| And the innovation, having innovative product is the only possible way to avoid competition |
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