XPeng Inc. (XPEV) Earnings Call Transcript & Summary

Hi, everyone. I'm very delighted to see all of you. XPeng Motors headquarter is in Guangzhou. So welcome to our home court . The Guangzhou Auto Show is China's last grand event of the year. In 2023 it marks an exciting and unusual year for XPeng Motors. Based on our efforts and achievement so far this year, we believe that we'll continue to grow through technological innovation and exploration reaching new heights. Let me quickly review with you some of our key technological achievement in 2023 with XNGP, we are the actually first company in China to implement the EV plus transformer in multiple cities, including rolling out to as many as 50 cities within next month. Second, XPeng Motors boasts to being the first to offer a mass-produced 800-volt ultrafast charging experience and we offer front and rear integrated aluminum die casting body, making it not only stronger but also safer. These technological advancements put XPeng Motors 3 to 5 years ahead of our competition with our Fuyao architecture system or SEPA 2.0, positioning ourselves as a benchmark for the next generation of smart cars. Over the past 10 months, XPeng Motors has made a remarkable comeback, thanks to the incorporation of new technologies. We have transformed from a state of adversity to a positive virtuous cycle and have achieved sales growth for 9 consecutive months, which is a rare phenomenon in the auto-making industry. Last month, we became the top seller of pure electric vehicles priced over RMB 200,000 in China. And as you can see, among the top 5 sellers, we actually have won 3 places. And our G6 has achieved a top position among all pure electric vehicles priced over RMB 200,000. Moreover, I'm thrilled to introduce a special guest today. He is not only our car owner but also a dear friend. He is our most distinguished, best looking, [ Mr. Jimmy Lin ]. Please give him a warm welcome. And Jimmy, please join us on stage.

Hi Xiaopeng. Hi, everyone.

Hi Jimmy, as a G6 owner, what is your overall experience with the XPeng G6?

Now firstly, I really like this car. The interior is comfortable and I can accelerate anytime and it's very powerful. Now the best thing about it is that it's not just about the driving experience but also the comfort of every passenger, including every single one. So the space for both the front and rear passengers are roomy and comfortable. That's why I've been using it a lot lately. So I believe that regardless of whether it's a smart car or a regular car, it's still a car.

So Jimmy just talk about the driving experience. I want to also know your thoughts on intelligence.

Yes. When I first experienced smart driving in urban areas of Guangzhou, I'm really pleasantly surprised because it's very complicated network. But the smart driving system was able to navigate the area with ease. And I was particularly impressed with the system's accuracy and ability to analyze the blind spots. And it even automatically turned around and captured videos for me to review. So overall, it was very amazing.

And I feel really lucky as a businessman, I care about luck and the blessing of [ Jimmy Lin ] definitely helped our G6 to grow sales. Thank you so much.

It is all because it's a good car.

Now today, I'm very excited to actually introduce you to XPeng X9, our flagship model of the SEPA architecture. This 7-seater boasts super smart driving features. And to unveil X9, I'm pleased to invite Jimmy to join me. So let's count down 3, 2, 1. All right. Jimmy please be seated.

Thank you. Let's take a picture.

Please be seated. Now this is a very, very unique car. I've been driving 7 seaters for many years. And it's been around for quite some time. It is very, very important for families to have a 7 seater, especially when we have elder people in the family and also children. Although I don't like to think of myself as a middle-aged man but as someone who is around 40 years old, I believe that 7-seater car is essential for families and I've driven many 7 seaters but there's also a lot of drawbacks. First of all, many 7 seaters are a bit lame to drive and they do not reflect our personality or individuality. And also, when you sit in the car, you just don't feel like it's large enough. Some cars have spacious second row but it's very narrow third row and some other cars have very small trunk space. And also, it is very difficult to navigate, brake, turn or park. Lastly, they are not smart. So for XPeng, we've always wanted to create a very unique MPV, which led to the development of the X9. So today, I would like to share with you how X9 addresses these issues. To start with, what a unique MPV should look like. You may have noticed that the front and rear of many MPVs are actually quite similar. They are like square boxes. And so we have always strived to create something different and unique. So for XPeng's X9, we actually took inspiration from starship which we grow up watching in sci-fi movies. The starship has a very futuristic design with clear sculpted lines, making it actually a perfect reference for the X9. We have combined also wind resistance or drag as well because it's crucial for pure electric cars. To achieve this, we introduced a breakthrough design with a 21-degree inclination angle at the front and also a 23-degree real windshield at the back. And the design actually results in an ultra-low drag of 0.227, which contributes to a solid driving range for X9. So this is our X9, the starship of tomorrow. And it is designed to actually provide a unique and futuristic kind of design and experience to our customers. Reminiscent of the starship captains from the cartoons or sci-fi movies that we grew up watching and the interior actually features this smart cabin design of starship, which also adds to its overall appeal and uniqueness. Some time ago, we posted some pictures of the interior of the X9 and we have received a lot of positive feedback. And I'm thrilled to share with you that many of them actually have expressed that interior have completely exceeded their expectations and they found it very sci-fiey and very beautiful. And I can't wait for every single one of you to come and actually experience it firsthand. And as I mentioned earlier, a good car shouldn't be lame and it must be spacious enough to accommodate every single passenger's needs. And some people have asked me about X9's steep angle design and also unique shape, wondering if it affects the space inside. However, I'm very happy to inform you that actually X9's interior space is 7.7 square meters which is 12% larger than my [indiscernible] car. And this makes it actually the largest model among its peers. It's very solid, very spacious. In addition to that, we actually have 2 types of seat options in our offering, apart from the space. So the first type actually offer this central aisle of 180 millimeters in the middle. This feature makes it very easy to access the second and third rows. If you have children or elderly passengers, you know how critical it is for them to move around quickly and easily in the second row. We have a 0 gravity space sofa that can also make your ride more comfortable. I've personally tried it several times and it's so relaxing that it almost put us to sleep. It gives you the feeling of floating in the air and is very comfortable. So we have 2 options. You have the 180 millimeters central aisle or this floating 0 gravity seats. Now for the third row, we are proud to be the first in the industry to offer this electric strapless adjustment of the third row back rest and headrest, which enables the backrest to be adjusted to almost 180 degrees. And this means that no matter how tall you are, you can comfortably sit in the third row. And during our tests, actually, we have 3 guys of 6 feet sat in the third row and felt no discomfort or pressure. Therefore, the third is row is definitely an important feature of our seating design. It's also worth noting that X9 is the first in its class to offer electric foldable seats that can be laid completely flat. And that means that you can actually convert it into a vast space in the trunk, if you usually have only 4 people riding and you can keep only 2 rows in the front. And we are actually the only player in the industry that can do it in its class and we aspire to create a vehicle that not only transports people but also provides ample space. And when it comes to the quality of a spaceship, in addition to first, second and third rows, we also need spacious trunk. So we actually have designed an invisible hidden storage space that is capable of accommodating 7 24-inch suitcases and still has room for a backpack. So even when the third row is fully occupied, you can still fit a lot of luggages in the back. And if there's a group of 7, everyone should be able to bring enough luggage. So some of you might wonder how we actually managed to create such a large space and whether it is safe to do so. Allow me to clarify that actually because we are purely electric we actually are different from traditional ICE vehicles or hybrid electric vehicles and we are designed to be completely purely electric. And one of the key advantages of X9 is that we are the only mass produced MPV in the world with both front and rear integrated aluminum die casting technology, resulting in 2 interesting features. Firstly, it makes the space extra large. Secondly, due to the rear floor die casting force of 12,000 tons, X9 is actually better equipped to withstand high-speed rear-end collisions up to 88 kilometers per hour without compromising the safety of passengers in the third row. And this is thanks to the integration of die casting technology and pure electric chassis. And so we offer both space and safety. And when people think of 7 seaters people mention, refrigerators, television, big couch and we would like to actually add central AC as well. First of all, we have a very smart refrigerator, it's not only big but also highly intelligent. You can actually turn it on and off by voice command, which makes it extremely convenient. It also can hold both cold and hot drinks, so whether you want a glass of milk or a chilled beer, we can offer you that. We also offer this largest 21.4-inch entertainment screen, the biggest in its class and it's the only 1 that actually can achieve 0 to 75 degrees strapless electric angle adjustment. This means that no matter where you sit, second or third row, you can still adjust the position of the screen to ensure that everyone can have the optimal viewing experience. Now I would like to actually highlight our central AC. When we sit in the car, we typically have to adjust the airflow and ventilation and it is very important to have that flexibility. And for the first time, X9 is using the central AC system in this type of car. And you'll see that there are many densely packed micro holes on the entire top of the car, which really emits a very gentle wind. And this kind of microclimate adjustment system of the Central AC system will prevent you from catching a cold and you can keep you comfortable, especially if you are an elderly person or a child who are more prone to catching a cold. So please come and try it for yourself. For any car, the #1 priority should be easy to drive and we are able to combine the space of an MPV and the easy to drivenness of an SUV together. A good car should meet the needs and preferences of different drivers, including both men and women. So we have included XNGP in this X9, which is one of our traditional strengths. And we have taken into consideration the challenges of parking in crowded parking lots. And in addition to that, we also have put in the standard configuration, the active rear wheel steering. The minimum turning radius of XPeng's X9 is shown to be only 10.8 meters, which is smaller than the other vehicles with the length of more than 4 meters and vehicles with the length of more than 5 meters as you can see from the slide here. And this is definitely something to consider when choosing a family car. And in my recent experience of driving the X9, the biggest experience, first of all, is that X9 is very easy to drive even better than a lot of SUVs. And also, the dual chamber air suspension is also an interesting feature that adds to the overall comfort and smoothness of the ride. And it's even better that it's a standard configuration across all variations. Now in my community, there are numerous speed bumps that require drivers to slow down to around 10 kilometers per hour. However, I've heard from my colleagues about how impressive this X9 was at handling speed bumps. I was skeptical at first but after personally trying it, driving over dozens of speed bumps with various situations, I can confidently say that X9 is unparalleled in terms of the comfort and ease when it comes to navigating speed bumps. I know it's a surprise. But today, we officially started the presale of X9 at a starting price of RMB 388,000. I mean to be honest, among my circle of friends, X9 has generated the most interest among all of our models. And most of my friends are interested in the X9, which is very spacious, easy to drive and smart and it's a 7-seater as well. So don't hesitate to book now if you're interested. And X9 is a versatile vehicle with the comfort of an MPV and the flexibility of an XUV. And next month, we actually will welcome the experience car in our stores and our delivery of X9 will begin in January. And you are all invited to try it yourself. Now today, we have a very short and sweet press conference but I'm excited for the X9 to make its mark in the Chinese MPV market. As someone who enjoys driving MPVs, I'm looking forward to experiencing the unique features that our product has to offer. And I believe that X9 has the potential to become the top electric pure MPV in China. Thank you so much. [Statements in English on this transcript were spoken by an interpreter present on the live call.]