Xpeng Motors Financial Report: In 2023, Xpeng's total revenue will be 30.68 billion yuan, and its gross profit margin will drop to 1.5%

Although performance hit a new high, Xpeng's losses are widening.

With the release of Xiaopeng's fourth quarter 2023 financial report, the financial situation for the whole year is presented to people:

The company delivered more than 140,000 units throughout the year, with total revenue of 30.68 billion yuan. Cash on hand soared to 45.7 billion yuan, and quarterly losses narrowed significantly.

The annual performance reached a new high and the situation seemed very good, but in 2023, Xpeng's gross profit margin continued to decline, from 11.5% in 2022 to 1.5%, and its automobile gross profit margin turned negative.

Externally, friendly competitors have started a price war, and Xiaopeng, which focuses on intelligent driving, has to face direct competition from Huawei.

The road ahead is full of difficulties, but Xpeng executives said in the earnings call that they remain optimistic about the 2024 product lineup and believe that Xpeng will achieve a higher growth rate and a more significant market share.

Xpeng's financial performance in 2023

Let’s first look at the situation in the fourth quarter. Xiaopeng’s overall performance is improving.

First, the delivery volume hit a quarterly high of 60,158 units, and the average monthly sales exceeded 20,000 units, a surge of 170.9% compared with the same period last year and a month-on-month increase of more than 50%.

Xiaopeng said that the increase in deliveries was mainly due to the rapid growth in sales of G6 and G9.

The surge in deliveries drove revenue to a new high, with fourth-quarter revenue of 13.05 billion yuan, almost equivalent to the sum of the second and third quarters, a 153.9% surge compared to the same period last year.

Among them, automobile revenue was 12.23 billion yuan, with an average of "a small target" sold every day, a year-on-year surge of 162.3%, and a surge of 55.9% compared to the previous time.

Revenues soared and gross profit margin also improved. After half a year, Xpeng's gross profit margin and automobile gross profit margin turned positive again, reaching 6.2% and 4.1% respectively.

At the same time, the net loss was significantly narrowed to 1.35 billion yuan, a decrease of 42.8% compared with the same period last year and about 134% compared with the previous quarter.

R&D investment remained at 1.31 billion yuan, remaining basically stable throughout the year.

Overall, Xpeng's indicators in the fourth quarter were positive. From the perspective of full-year performance, some of Xpeng's core indicators were also good.

Annual sales exceeded 141,600 vehicles, a new annual record and a year-on-year increase of 16.7%.

The annual revenue was 30.68 billion yuan, a month-on-month increase of 53% and a year-on-year surge of 153.9%.

More cars were sold, but Xiaopeng's losses became more serious.

In 2023, Xpeng's full-year net loss expanded to 10.38 billion yuan, up about 13.6% from 2022.

The gross profit margin continued to decline, reaching 12.5% ​​in 2021, 11.5% in 2022, and only 1.5% in 2023.

The automotive gross profit margin fell to negative 1.6%, compared with 9.4% in the previous year.

For the decline in automobile gross profit margin in 2023, Xiaopeng mainly listed three reasons:

Increased promotional activities

New energy vehicle subsidies expire

Existing model upgrade

The losses widened and the gross profit margin declined, but Xiaopeng had more cash and cash equivalents, which expanded to 45.7 billion yuan, the highest point in history, giving Xiaopeng more time to improve its financial indicators.

Xiaopeng also stated that starting from 2024, the revenue from platform and software services will significantly improve the gross profit margin.

Comparing the current situation of "NIO, Xpeng and Li Auto", we will find that the situation has changed dramatically in 2023.

Ideal turned positive for the first time in annual profit in 2023, with a gross profit margin of 22.2%.

Revenue was the first to exceed 100 billion yuan, with annual deliveries of 376,000 vehicles and a full-year net profit of 11.81 billion yuan, making 100 million yuan in almost three days.

Ideal is leading in all indicators, while NIO, like Xpeng, is in the red.

In 2023, NIO delivered more than 160,000 vehicles, and its revenue exceeded 50 billion yuan for the first time.

But like Xiaopeng, although it sold more cars, its gross profit margin was declining to 9.5%, and its full-year loss widened to 20.7 billion yuan.

Although the situations they face are different, judging from the information that has been disclosed, the three companies have made the same choice in order to achieve growth by 2024:

Go down.

How will Xpeng’s sub-brands perform downwards, and what are Xpeng’s expectations for its sub-brands?

During the earnings call, Xiaopeng revealed its plans.

Xpeng 2024: Achieving Growth in a “Price War”

In a conference call after the release of the financial report, He Xiaopeng stated that starting from 2023, Xiaopeng's strategy will be adjusted to:

Embrace greater growth and more intense price competition.

How does Xiaopeng achieve growth?

There are four main cards:

The first card, push the new car.

There will be two new cars this year. The first car of the sub-brand will be unveiled at the Beijing Auto Show next month and will be launched and delivered in the third quarter.

Positioning itself as a 150,000 yuan Class A pure electric car, Xiaopeng calls it "the first AI smart driving car for young people." It will be ToC in the initial stage, and there may be other channels in the later stage, such as cooperation with Didi.

The main brand Xiaopeng will also launch a new car in the second half of this year, but Xiaopeng did not disclose more information.

Xiaopeng also revealed its longer-term new car plan, planning to launch nearly 30 models in the next three years, including more than 10 new models, as well as upgraded models of existing models and international left- and right-hand drive models.

In addition to vigorously launching new products, Xiaopeng will continue to reform its marketing and channels , and its marketing strategy will change from the original "car + Internet" model to a mobile Internet approach similar to Xiaomi.

Focus on the leading social media platforms and mobilize users online.

We will continue to expand offline sales channels and penetrate deeper into the market, and the number of stores will increase to 600 in the third quarter.

In the initial stage of the sub-brand’s launch, we will carve out independent booths in existing stores, and we hope to set up independent stores next year.

The third card is the smart driving card . Xiaopeng must insist on improving users’ high-end smart driving experience and technological equality.

He Xiaopeng revealed that he has set a goal for the team, hoping that the XNGP travel experience in core areas such as Beijing, Shanghai, Guangzhou and Shenzhen can be comparable to the driverless cars of autonomous driving company Waymo.

In the second quarter, Xiaopeng will put the large-scale intelligent driving model into mass production to make its own XNGP smarter.

Speaking of intelligent driving, we have to mention the famous scene at the China Electric Vehicle 100 Forum 2024 a few days ago.

When speaking at the forum, Yu Chengdong informed He Xiaopeng that the throne of smart driving had changed hands and Huawei was in the lead.

During the conference call, someone asked He Xiaopeng how he viewed the technological differences with Huawei and how to maintain technological leadership.

He Xiaopeng said that Huawei is very excellent and he respects Huawei. Xiaopeng and Huawei have their own strengths and advantages in different fields.

In the future, Xiaopeng will not only improve its intelligent driving capabilities and safety, but also improve its brand and marketing capabilities and reduce the cost of intelligent driving.

In addition to deepening its presence in the domestic market, Xiaopeng will continue to expand overseas. This is Xiaopeng's fourth card, going overseas.

Xiaopeng plans to launch an international left-hand drive version of the G6 in the second quarter and a right-hand drive version in the second half of the year, targeting Western Europe, the Middle East, Southeast Asia and Commonwealth countries.

In general, Xiaopeng will improve its technical level and marketing capabilities, and expand its scale by launching new products and continuing to go overseas.

It is not easy to expand scale and achieve growth. How will Xiaopeng respond to the fierce external "price war"?

Xpeng currently has a relatively sufficient cash reserve of 45.7 billion yuan. In the second half of last year, Xpeng achieved full-year operating cash flow positive for the first time.

Xiaopeng believes that abundant funds and a positive cash flow cycle give it more confidence to achieve growth amid fierce competition.

Xiaopeng will continue to reduce costs, mainly through R&D and procurement.

In terms of R&D, Xiaopeng integrates intelligence, powertrain and vehicle platform into a large platform to maximize the commonality of various models, achieve a cost reduction target of more than 25%, and improve R&D efficiency.

Xiaopeng revealed that the hardware cost of XNGP will drop by 50% for new cars delivered in the second half of the year.

On the procurement side, Xiaopeng and Volkswagen signed a cooperation agreement. Through joint procurement, Xiaopeng can make full use of Volkswagen's global supply chain capabilities and reduce costs.

During the conference call, Xiaopeng also gave recent forecasts:

Xiaopeng expects to deliver a total of 21,000 to 22,500 vehicles in the first quarter, with revenue expected to be between 5.8 billion and 6.2 billion yuan.

Xpeng Motors co-president Gu Hongdi also said that Xpeng's situation in the first half of the year will be somewhat similar to that of the same period last year, but he is optimistic about Xpeng's full-year growth.

Especially for the first car of the sub-brand, Gu Hongdi believes that it should be able to sell 10,000 units per month.

What’s interesting is that this year both NIO and Li Auto want to achieve growth by “going downwards”.

It is reported that the Ideal L6, which is about to be launched, will be priced below 300,000 yuan, with internal sales expectations of 20,000 units, which will help Ideal achieve its annual sales target of 800,000 units.

NIO will also launch a sub-brand, and its first car, Ledao L60, has been exposed. Judging from the information revealed by Li Bin, it should be a "Model Y" that can replace batteries and is cheaper. The sub-brand will mainly spread costs through sales growth, and the main NIO brand will be responsible for increasing gross profit margins.

Weilai's sub-brand continues to use its own battery swapping advantages, while Xpeng aims to popularize high-end smart driving to the 150,000-class. The two new forces that started the earliest but are still in the red have each added fuel to the fiercely competitive Chinese auto market this year.

He also placed a heavy bet on his own destiny.

Self-Qubit