XPENG-W Manifesto: Aiming for 20,000 Monthly Sales in Q4 (Summary)

Below is the core information summary of the XPENG-W conference call. Please refer to XPENG-W is already cold, when will it recover? for financial report analysis.

I. Model Planning:

a. The SEPA 2.0 architecture new car G6 will be launched in June. G6 is the first integrated die-casting model, but it is not a technical challenge. Two months have been reserved from SOP to delivery, from June release to July delivery, with two months of buffer. It is estimated that the climbing speed of deliveries in the third quarter will far exceed that of G9 and P7i.

The G6 supply chain is fully prepared, and with resonance in marketing, sales, and delivery, it will quickly climb up in volume.

b. Other new cars: MPV - internally named X9; clearer definition of existing models and richer configurations.

c. 2025 model matrix planning: about 10 models, with a main price range of 200,000-300,000 yuan, plus a few models above 300,000 yuan and below 200,000 yuan.

II. This year's goals:

1. Delivery: Previously, the target was to increase sales by 30% in 2023. Currently, after G6 is delivered in large quantities in the third quarter, the monthly delivery is expected to exceed 15,000 vehicles.

2. In the fourth quarter, with continuous growth and additional models, monthly sales will reach 20,000. The ideal structure is that G6 sales will be more than twice that of P7, and G9 monthly sales will also increase significantly.

3. Positive cash flow in the fourth quarter.

III. Delivery trend:

1. The supply chain of P7i is mainly related to batteries, and sufficient preparation has not been made. In May, especially in June, our battery production capacity gradually increased, and the production capacity bottleneck was reduced.

2. The sales outlook misjudgment between P7i and G9 will be adjusted to a more stable approach with suppliers since the fourth quarter of last year.

3. The order momentum has been gradually increasing in recent months. We believe that the actual average waiting time for our stores to deliver cars has been extended to more than 6 weeks or even longer.

IV. Wang Fengying's actions since joining:

1. Merging sales and automobile trade, making the big middle platform into a small front platform.

2. Improving marketing efficiency, internal flat management of tools, projects, etc.

3. Sales training and SKU reduction.

4. There will be significant changes in the channel end in the third quarter, and marketing will be more warm.

V. Gross margin trend judgment:

1. In the first quarter, battery costs decreased by 5% year-on-year, and in the second quarter, it should be -10% to -12%. Battery costs account for 40% of the total cost, and a 7% month-on-month increase corresponds to a 3-4 point gross margin improvement.

2. The scale of revenue expansion is conducive to the improvement of profit margin. However, in the second quarter, due to the small increase in sales volume and the continued sales of old products, although there are savings in battery costs, the gross margin is still under pressure.

3. After the delivery of P7i and G6 increases in the second half of the year, profits will also increase. The gross profit margin will gradually increase with the change of product structure.

4. However, the significant increase in profit margin will come from next year, as all cost reduction measures will have clearer effects next year.

VI. Lithium price judgment:

1. It's hard to say, but if we have to, we expect a temporary rebound, followed by another downturn in the second half of the year. It's hard to judge where it will go this year, but it's reasonable when it's below 200,000. We currently have a flexible pricing strategy with our partners.

2. The most important technological innovation behind XPENG-W is the longest range with the least amount of battery. In the future, XPENG-W's iron-lithium vehicles will increase and the overall cost will decrease. We are confident in ensuring the range.

VII. XNGP: XNGP service is expected to be provided by the end of the year, and the number of service users can reach thousands in the next quarter.

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