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With weak sales growth, Wei Xiaoli has become "Li Wenwei". Standing at the 10th anniversary node, can Xiaopeng make a key leap with the equal rights of intelligent driving of MONA M03?

Author | Zhu Xiaoyu

Editor | Xing Yun

As Xpeng celebrates its tenth anniversary, it stands at a critical juncture.

With weak sales growth, Xpeng is in a rather passive situation. From January to July this year, Xpeng sold 63,000 vehicles in total, only 22.6% of the annual target, and the progress is not optimistic. Among the three new forces of "NIO, Xiaolai and Li Auto", Ideal sold nearly 240,000 vehicles in the same period, and NIO sold 108,000 vehicles, achieving 42.9% and 46.9% of the annual target respectively.

In terms of sales, Xiaopeng has not yet passed its darkest moment. The marketing system changes and supply chain reforms carried out by Wang Fengying, the former president of Great Wall Motors, have helped Xiaopeng Motors get out of the "quagmire" to a certain extent, but it is far from getting out of the predicament. How to get consumers to pay has become a problem that needs to be solved urgently.

Under such circumstances, He Xiaopeng, the usually low-key senior brother, also personally started live streaming. On August 13, He Xiaopeng, the founder of Xiaopeng Motors, started his first live streaming on his Douyin account, showing the public the level of Xiaopeng Motors' intelligent driving and using the G6 photoelectric (photovoltaic battery power) test to prove its endurance.

Sales growth fell short of expectations and the financial situation improved, but remained under overall pressure.On August 20, Xpeng’s second quarter financial report for 2024 was released. In Q2, Xpeng’s total revenue was 8.11 billion yuan, a year-on-year increase of 60.2%, but it was still in the red. The net loss in the second quarter was 1.28 billion yuan, which narrowed slightly from the previous quarter.

The upcoming MONA M03 attempts to lower the threshold of intelligent driving with a starting price of no more than 135,900 yuan, becoming a new hope for Xiaopeng to win market recognition. Earlier, at the all-staff meeting of Xiaopeng Motors' 10th anniversary, He Xiaopeng revealed that MONA orders exceeded expectations and exceeded G6 orders during the same period. A stable supply chain has been prepared in advance, and production is ready.

Can MONA M03 bring Xiaopeng a crucial leap forward?With its persistent efforts in intelligent driving, when will Xpeng reap the rewards?

1. Sales volume lags behind, Xiaopeng is anxious

In the first half of 2022, Xpeng Motors topped the new power sales list many times. However, after that, Xpeng entered a headwind situation.

On August 20, the sales data for the latest week (August 12 to August 18) was released. Ideal Auto ranked first with a weekly sales volume of 10,700 units; Xpeng Auto ranked eighth with 2,300 units, losing to Xiaomi Auto. In last week's sales list, Xpeng Auto even fell out of the top ten.

Although the weekly sales list is controversial in the new energy vehicle industry, it is also one aspect of Xpeng Motors' sales dilemma. In 2024, Xpeng Motors' monthly deliveries fell back below 10,000 units. Although it increased later, its highest sales basically remained at 10,000 units. In July, Xpeng's deliveries were 11,100 units, compared with Ideal and Weilai's 51,000 and 25,000 units, Xpeng seemed to be lagging behind.

In the first seven months, Xpeng sold a total of 63,000 vehicles, a year-on-year increase of 20%. This seems to be a good report card, at least it has maintained sales growth. In fact, compared with the sales target of 280,000 vehicles set by Xpeng,The completion rate in the first seven months was less than 30%.

Although sales have rebounded, the overall weak growth trend has also directly affected Xiaopeng's financial performance.

In the second quarter of 2024, Xpeng's revenue from automobile sales was 6.82 billion yuan, a year-on-year increase of 54.1% and a month-on-month increase of 23.0%. The total revenue reached 8.11 billion yuan, with a net loss of 1.28 billion yuan and an adjusted net loss of 1.22 billion yuan.

There are still five months left for Xiaopeng in 2024. If it wants to achieve its goal, it will need to deliver 43,400 units per month. How to boost sales has become Xiaopeng's top priority.

In September 2022, Xiaopeng launched its first high-end G9, which did not achieve the expected results. He Xiaopeng was committed to leading Xiaopeng Motors through the "darkest moment". Soon after, Wang Fengying, who had worked at Great Wall Motors for nearly 30 years and was regarded by the outside world as the "number two" of Great Wall, joined Xiaopeng.

Wang Fengying's joining has initiated a series of cost-cutting and efficiency-enhancing measures such as the adjustment of Xiaopeng's internal organizational structure, supply chain management, and channel changes. In particular, the sales system reform represented by the Jupiter Project cut off inefficient direct-sale stores and turned to dealers. As of the end of June 2024, Xiaopeng Motors' physical sales network has accumulated 611 stores, of which about 70% are dealer stores.

After the sales volume fell continuously in January and February this year, Xpeng Motors made new moves in terms of channels. In March, many media reported that Xpeng Motors required dealers to reduce inventory and purchase half of the target sales volume each month. Xpeng Motors also confirmed the news, saying that the dealers were required to reduce inventory in order to deliver faster and improve efficiency.

However, due to the drastic internal personnel adjustments, Xiaopeng's wholesale sales model has been temporarily shelved. Jiemian News reported that due to internal concerns and resistance from dealers, the wholesale sales model has only been tested on a small scale so far and it is difficult to promote it nationwide.

Although relying on dealers can quickly expand the sales network, it also leads to a chaotic pricing system under various discounts in different regions of Xiaopeng terminals, breaking the label of unified and transparent prices that new forces are focusing on. The uneven dealer team has also caused a trust crisis between many users and Xiaopeng.

In June and July, Xpeng Motors' sales volume recovered somewhat, but it was veryIt is hard to say whether the effect was brought about by the reform of the marketing system or whether the market was regained more by the low-price sales strategy.

2. Can the first AI smart car for young people help Xiaopeng take off?

Right now, MONA M03, which will be launched in late August, has become a new hope for Xpeng Motors to expand market sales.

In the financial report, He Xiaopeng stated that starting with the launch of MONA M03 in August, Xiaopeng is about to enter a strong product cycle.In the next three years, a large number of new and modified models will be launched on the market, “I believe that through strong product cycles and more efficient marketing, our long-term accumulated technological advantages and breakthroughs in artificial intelligence will translate into sales growth.”

The full name of MONA is "Made Of New AI", and it is positioned as the global AI smart car popularizer. In terms of selling point promotion, advanced smart technology is the label of this car, which will be equipped with Xiaopeng Motors' latest smart driving assistance system. At the same time, He Xiaopeng once said, "Young people's car machines must also be flagships." Xiaopeng MONA M03 is equipped with Qualcomm 8155 chips and 16GB memory as standard.

In terms of price,This is a car that the owner is targeting at a low priceAccording to the data from Autohome, the price is 135,900 yuan. Previously, Xiaopeng Motors investors said that the starting price of Xiaopeng MONA M03 is within 140,000 yuan.

In the past, Xiaopeng's high-end intelligent driving models were priced between 200,000 and 300,000 yuan, while other players' models were even priced above 300,000 yuan.The company intends to "roll up" high-end intelligent driving to create an extremely low price threshold, and wants to use the concepts of "equal rights for intelligent driving" and "young people's first AI intelligent driving car" to increase sales and win back a game.。

Although Xiaopeng is a first-tier automaker in the intelligent driving system, the reality is that the "label" that Xiaopeng markets to the outside world is not obvious, whether it is intelligence, cost-effectiveness or low price.

In the to c market, Xiaopeng's intelligent driving system has a weak market voice due to the competition from giants such as Huawei and Tesla; in terms of low prices, the new energy market is dominated by BYD.

The most urgent task for Xiaopeng Motors is to break the circle with a new car and create a brand that belongs to Xiaopeng. The current Xiaopeng MONA M03 has undoubtedly undertaken this task. However, the price range of 100,000-150,000 yuan has always been the comfort zone of BYD, the king of volume. In the top ten list of new energy vehicles in this price range, 8 are BYD models. If Xiaopeng wants to break through BYD's comfort zone, it will have a fierce battle.

Behind this is a more realistic problem. If calculated based on the selling price of 140,000 yuan, Xiaopeng's investment in intelligent driving research and development costs will seriously exceed the budget.

On July 30, He Xiaopeng said at the AI ​​Intelligent Driving Technology Conference, "This year alone, Xiaopeng Motors has invested 3.5 billion yuan in intelligent driving and hired 4,000 people. The R&D budget has increased by more than 40% year-on-year."

From 2021 to 2023, Xpeng's R&D expenditure was 4.114 billion yuan, 5.215 billion yuan and 5.277 billion yuan respectively, totaling 14.6 billion yuan, accounting for basically 17%-19% of its revenue, ranking in the middle among the three new forces NIO, Xiaopeng and Li Auto.

The latest financial report data shows that in the second quarter of 2024, Xpeng's R&D investment was 1.47 billion yuan, a year-on-year increase of 7.3%. This is mainly due to the company's expansion of its product portfolio to support future growth, which has led to an increase in expenses related to the development of new models. In the first half of the year, Xpeng's investment in R&D totaled 2.82 billion yuan.

At present, Xiaopeng Motors is still in the red. Although the mass-market models can reduce costs to a certain extent through economies of scale, in the eyes of the outside world,What Xiaopeng has to deal with is the question of whether high-end intelligent driving will be compromised under a certain degree of financial pressure.

Can MONA M03 live up to Xiaopeng's expectations?

The starting point of MONA is Didi's internal car-making project - Da Vinci. In August 2023, Xiaopeng Motors acquired Didi's car-making business for 5.8 billion yuan, and the "MONA" model was eventually placed in Xiaopeng Motors' new sub-brand.

He Xiaopeng once revealed that the annual sales volume is conservatively expected to be 100,000 vehicles. At the same time, according to the agreement between Xiaopeng and Didi, Didi can only get the corresponding shares from Xiaopeng if the delivery volume of qualified new vehicles reaches 100,000 vehicles during the first performance target period. This meansDidi also needs to use its own resources in the online car-hailing ecosystem to help MONA M03 achieve a breakthrough in sales on the B-side.

On August 15, He Xiaopeng revealed at the 10th anniversary event that the pre-sale orders for Xiaopeng MONA M03 exceeded expectations and surpassed the same period of the G6 launch. Xiaopeng officially disclosed that the number of users of Xiaopeng G6 pre-sale exceeded 25,000 within 72 hours.

3. How does Xiaopeng tell a good new story?

Despite continuous investment, insufficient transfusion capacity has brought considerable challenges to Xiaopeng's cash flow.

As of the end of June 2024, Xpeng's cash reserves were 33.74 billion yuan, a decrease of 7.66 billion yuan from the end of March.

It is worth noting thatXpeng Motors' gross profit margin continues to improve.

In the first three quarters of 2023, Xiaopeng has been in a dilemma of negative gross profit until the fourth quarter. In the second quarter of this year, Xiaopeng's gross profit margin reached 14%, an increase of 17.9 percentage points year-on-year and 1.1 percentage points month-on-month.

The improvement in gross profit margin is due to cost reduction and improved model mix, which allowed Xpeng's vehicle profit margin to further increase to 6.4% in the second quarter.

On the other hand, in addition to vehicle sales,Xiaopeng's revenue from technology R&D services related to platform and software strategic technology cooperation continues to increase.

In the second quarter of 2024, the revenue of this segment reached RMB 1.29 billion, a year-on-year increase of 102% and a month-on-month increase of 29%. The profit margin reached 54.3%, an increase of 0.4 percentage points month-on-month.

There is no doubt about Xiaopeng's technical capabilities. In July 2023, Volkswagen Group and Xiaopeng Motors signed a long-term technical cooperation framework agreement. After the transaction is completed, Volkswagen Group will use US$700 million to obtain an observer seat on the board of directors of Xiaopeng Motors.

Volkswagen voted with $700 million in real money to pay for Xiaopeng's belief in technology. In the future, the two parties will develop two new models based on the E/E architecture platform of Xiaopeng G9. Xiaopeng provides platform and intelligent driving software and hardware capabilities, while Volkswagen is responsible for the design and production of the model. The developed B-class electric vehicle will eventually be sold in the Chinese market under the Volkswagen brand.

In April 2024, the two parties signed a strategic cooperation and joint development agreement on electronic and electrical architecture technology, and will devote all their efforts to developing industry-leading electronic and electrical architecture for Volkswagen's CMP and MEB platforms produced in China.

However, for companies that provide autonomous driving software, joint development is never a simple technology output. Xiaopeng needs to adapt the software and hardware from scratch. Due to customized requirements, Xiaopeng also needs to send a large number of R&D engineers to the Volkswagen OEM.

At present, vehicle sales account for the bulk of Xiaopeng's revenue. After cooperating with Volkswagen to export intelligent driving technology to the outside world, it is still unknown whether Xiaopeng will expand new customers in the future.

What is clear is that if intelligent driving technology continues to be exported in the future, He Xiaopeng's story of "selling cars through autonomous driving" will be able to be taken to a higher level.