Q4 2023 XPeng Inc Earnings Call
Operator: Hello, ladies and gentlemen, thank you for standing by for the fourth quarter and fiscal year 2023 earnings conference call for Xpeng Angle. At this time, all participants are in listen only mode.
Hello, Ladies and gentlemen, thank you for standing by for the fourth quarter and fiscal year 2023 earnings conference call for <unk>, Inc.
At this time, all participants are in listen only mode.
Operator: After management's remarks, there will be a question and answer session. Today's conference call is being recorded. I will now turn the call over to your host, Mr. Alex Xie, Head of Investor Relations of the company. Please go ahead, Alex.
After management's remarks, there will be a question and answer session.
Today's conference call is being recorded.
I will now turn the call over to your highest Mr. Aleksey <unk> head of Investor Relations of the company. Please go ahead Alex.
Alex Xie: Thank you. Hello, everyone, and welcome to Xpeng's fourth quarter and fiscal year 2023 earnings conference call. Our financial and operating results were issued via Newswire services earlier today and are available online. You can also view the earnings press release by visiting the IR section of our website at ir.xiaopeng.com.
Aleksey: Thank you Hello, everyone and welcome to <unk> fourth quarter and fiscal year 2023 earnings Conference call.
And the operating results were issued via Newswire services earlier today and available online you can also viewed earnings press release by visiting the IR section of our website at IR Dot shampoo Dot com.
Operator: Participants on today's call from our management team will include co-founder, chairman, and CEO, Mr. He Xiaopeng; Vice Chairman and President, Dr. Brian Gu; Vice President of Corporate Finance Investments, Mr. Charles Zhang; Vice President of Finance Accounting, Mr. James Wu, and myself. Management will begin with prepared remarks, and the call will conclude with a Q&A session. A webcast replay of this conference call will be available on the Investor Relations section of our website. Before we continue, please note that today's discussion will contain four forward-looking statements made under the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995.
Speaker Change: On today's call from our management team will include co founder Chairman and CEO, Mr. Vishal, Peng Vice Chairman and President Dr. Brian <unk>, Vice President of corporate finance investments with the Chausse Chung Vice President of Finance and accounting, Mr. James Hu and myself.
Speaker Change: Management will begin with prepared remarks, and the call will conclude with a Q&A session. A webcast replay of this conference call will be available on the IR section of our website before we continue. Please note that today's discussion will contain forward looking statements made under the safe Harbor provisions of the U S. Private Securities Litigation Reform Act.
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Operator: Forward-looking statements involve inherent risks and uncertainties, and as such, the company's results may be materially different from the views expressed today. Further information regarding these and other risks and uncertainties is included in the relevant public filings of the company as filed with the U.S. Securities and Exchange Commission. The company does not assume any obligation to update any forward-looking statements, except as required under applicable law.
Speaker Change: Forward looking statements involve inherent risks and uncertainties as such the company's results may be materially different from the views expressed today further information regarding these and other risks and uncertainties is included in the relevant public filings of the company as filed with the U S Securities in there.
Speaker Change: Exchange Commission.
Speaker Change: The company does not assume any obligations to update any forward looking statements, except absolutely clouds.
Alex Xie: Please also note that Xpeng's earnings press release and this conference call include the disclosure of unaudited GAAP financial measures, as well as unaudited non-GAAP financial measures. Xpeng's earnings press release contains a reconciliation of the unaudited non-GAAP measures to the unaudited GAAP measures. I will now turn the call over to our co-founder, chairman, and CEO, Mr. He Xiaopeng. Please go ahead.
Speaker Change: The law. Please also note that X times earnings press release, and this conference call includes the disclosure on all of US GAAP financial measures as well as unaudited non-GAAP financial measures Exxon's earnings press release contains a reconciliation of the unaudited non-GAAP measures to the outfit.
Speaker Change: GAAP measures I will now turn the call over to our co founder Chairman and CEO. Mr. <unk> Zhao Peng. Please go ahead.
Xiaopeng He: Hello, everyone. In 2023, with the launch of our strategy, organization, adjustment, and new products, the volume of delivery of Xiaopeng's machines has dramatically increased. In the 4th quarter of 2013, they broke the 60,000 mark. In 2023, the total number of teachers was more than 140,000.
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Xiaopeng He: Our platform-based R&D, technical downgrading, and business improvement are beginning to take effect. In the 4th quarter of 2023, the company's gross profit margin improved to 6.2%, and the total gross profit margin increased by 10% compared to the previous year. From the perspective of cash flow, in the second half of last year, 60%, At the end of 2023, our cash flow exceeded 450 million yuan. Therefore, the abundant capital and positive circulation of cash flow give us more confidence to achieve high-quality and high-speed transactions in a competitive environment. I believe this is just the beginning of change. I look forward to seeing more improvements and improvements in our ability to operate in 2024. Hello everyone.
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Speaker Change: Hello, everyone I'm pleased to share that experienced impressive growth in our delivery volume quarter by quarter in 2023, which exceeded 60000 in Q4 up 171% year over year, thanks to our proactive change to business strategy and the organizational structure.
Speaker Change: The new product launches in total we delivered over 140000 units in 2023, our efforts to focus on platform based R&D technology, driven cost reduction and operational efficiency improvements have begun to yield positive results in Q4, our gross margin improved two six points.
Xiaopeng He: 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 new product launches. As of the end of 2023, we had over RMB 45 billion in cash, which puts us in a strong financial position to deliver high-quality and rapid growth in a highly competitive environment. I believe this is just the beginning of the change, and I look forward to bringing more improvements and positive results in our capabilities and operations in 2024. This year is the 10th year since the founding of Xiaopeng Automobile.
Speaker Change: 2% with the vehicle margin expansion of 10 percentage points compared to the previous quarter. Our company achieved a positive free cash flow of more than RMB 6 billion for the second half of 2023 and achieved for the first time positive full year operating cash flow.
Speaker Change: Also at the end of 2023, we had over RMB 45 billion in cash, which puts us in a strong financial position to deliver high quality growth in the highly competitive environment. I believe this is just the beginning of the change and I look forward to bringing more improvements in positive results in our capabilities and operate.
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Xiaopeng He: This is also the first year of high-intensity competition in the automotive industry in China. [inaudible] I believe this will mark the end of China's smart electric vehicles in 2024-2027. So for Xiaopeng, starting from 2023, we have foreseen, and our strategy is to adjust to..., in order to meet larger-scale growth waves and more intense downturns. So Xiaopeng is determined to do his best in the following areas, including Yin Zhang, Unknown Executive, Tim Hsiao, Bin Wang, Paul Gong, Yuqian Ding, Alex Xie, Xiaopeng He, Jing Chang, Hongdi Gu, Pingyue Wu, Xinchi Yin, Jiaming Wu, Xpeng He, Jing Xiong Shuo, China, Global Brands, Sales, and Service Capacity: Promoting Autonomous and Unmanned Vehicles So let's look at it from a different angle.
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Operator: [inaudible], ?? The total number of SOPs will reach nearly 30, but because of the maturity and efficiency of Xiaopeng's modelization ability, Through the efforts of large companies and autonomous driving teams, we are promoting the rapid improvement of autonomous driving capabilities, and others. There are many, many more to come. But I hope you enjoyed this video.
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Jim: In 2024 will be celebrating the 10th anniversary of our founding and will also be the first year filled with intense competition in the Chinese automobile industry since the first quarter of the yet there has been industry wide price, which has been growing increasingly ECS against.
Jim: MS backdrop, several EV start ups have been forced you to wind down their operations and so can we know the technology companies that have terminated their investments and also different needs.
Jim: These dynamics suggest that the rates for small <unk> for the larger wave of growth intensifying price competition, we have adjusted our strategies in a number of fields, we enhanced our organization and efficiency and the all round manner, we made significant improvement in the quarter and the quality.
Operator: Please like, comment, and subscribe. Thank you. And I'll see you in the next video.
Operator: Bye. Bye. Bye. Bye. Bye. Bye. Bye. Bye. Bye. Bye. Bye. Bye. Bye. Bye. Bye. Bye. Bye. Bye. Bye. Bye. Bye. Bye. Bye.
Jim: Of our operations and to fully close the loop customer experience build comprehensive competitiveness in products technology and supply chain to support our planned larger scale, we upgraded our sales and service capabilities in China and overseas market with major full scenario.
Xiaopeng He: ,, In 2024, we will be celebrating the 10th anniversary of our founding and will also be the first year filled with intense competition in the Chinese automobile industry. Since the first quarter of the year, there has been an industry-wide price war, which has been growing increasingly fierce. Against this backdrop, several EV startups have been forced to wind down their operations, and certain renowned technology companies have terminated their investment in the auto business. These dynamics suggest that the race for smart EVs for the larger wave of growth and intensified price competition has intensified. We have adjusted our strategies in a number of fields. We enhanced our organization and efficiency in an all-around manner. We made significant improvements in the quality of our operations and fully closed-loop customer experience.
Jim: And autonomous driving more accessible and affordable and we accelerated our global expansion to put it differently. We are long term oriented and never plan for the future based on the assumption of short term oil growth at small scale.
Jim: I formulated our strategies and tactics for the knockout ground of EV competition.
Jim: Cited about the strategic opportunities are underway, we have completed the framework of our organizational adjustments, which starts to deliver positive results. We are about to embark on a strong product cycle and launched more than 10, new vehicle models over the next three years together with the Congress.
On the left hand, the drive and the right hand drive models for the international market as well as a face lift of biogen's, there will be nearly 30 projects S. O P. In the next three years, thanks to our strong capabilities to leverage modules and platform and a higher efficiency in R&D incremental R&D expenses.
Xiaopeng He: We built comprehensive competitiveness in products, technologies, and supply chain to support our planned larger scale. We upgraded our sales and service capabilities in China and overseas markets. We made full scenario auto and autonomous driving more accessible and affordable. And we accelerated our global expansion. To put it differently, we are long-term oriented and never plan for the future based on the assumption of short-term or growth at a small scale.
Jim: These projects.
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Jim: We are leveraging artificial intelligence to drive our autonomous driving technology forward, which enables us to lower cost and deploy extraordinary experiences and move it vehicle model in more vehicle models with our new business model Lastly, international expansion opened new avenues for our growth.
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Xiaopeng He: As I formulated our strategies and tactics for the knockout round of the EV competition, I am excited about the strategic opportunities underway. We have completed the framework of our organizational adjustment, which is starting 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. Together with the corresponding left-hand drive and right-hand drive models for the international market, as well as facelift versions, there will be nearly 30 SOP models in the next three years. Thanks to our strong capabilities to leverage modules in the platform and higher efficiency in R&D, incremental R&D expenses for these projects are limited.
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Speaker Change: The upcoming competition isn't solely focused on gaining a larger market share in the short time. It is also about to demonstrating the automakers capacity to maintain its leadership position by achieving high quality and efficient gross showcasing expertise in smart technology, expanding globally and creating <unk>.
Speaker Change: Advantages through innovative products and a business model that's it from.
Speaker Change: From my perspective, what are the top two lines on the strategic opportunities up from smart technology and global markets.
Xiaopeng He: We are leveraging artificial intelligence to drive our autonomous driving technology forward, which enables us to lower costs and deploy the extraordinary experience in more vehicle models with a new business model. Lastly, international expansion opens new avenues for our growth. I believe that the next competition will not only depend on the size and scope of the short-term competition but also test how a car company can maintain its size, smartness, and internationalization in a high-quality and high-efficiency competition.?? n So, in my opinion, in order to grasp the international strategic opportunities of smart people, what Xiaopeng should do is to have more subversive strategies like S9. , In my opinion, Xiaopeng's short and long versions are very good.
Speaker Change: Ex Palm must continue to make in the case of break Susan and address any organizational shortcomings in my view in the pasta, we wouldnt neither very Oh, we never really showed the very obvious shortcomings are well advanced students, but going forward, we will need to address the shortcomings definitely.
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Xiaopeng He: , The upcoming competition isn't solely focused on gaining a larger market share in the short term. It is also about demonstrating the automaker's 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. From my perspective, in order to capitalize on the strategic opportunities from smart technology and global markets, Xpeng must continue to make innovative breakthroughs and address any organizational shortcomings. In my view, in the past, we were neither very good; we never really showed very obvious shortcomings or advantages, but going forward, we will definitely need to address these shortcomings.
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Speaker Change: By 'twenty 'twenty four we are looking to take our marketing strategy to the next level by creating a new and potent marketing team, we will upgrade our marketing strategies to leverage advantages of mobile and internet platforms for the ultimate build sector in the past automobile marketing was.
Speaker Change: I'm already dominated by P. G C. Centralize the platforms now we will focus more on decentralize, the social media platforms and make full use of the UTC from a broad base of customers. For example, we launched a campaign during the Chinese new year to come from video to sharing of auto experience by export.
Customize them over 20000 customers that participated in the event spreading the reputation of excellent odd also from tier one cities to have hundreds of cities across the nation in the pasta month customer interest grew by over 100% in key social platforms, Yeah sure marketing innovation.
Speaker Change: You should not only achieve a substantial increase in word of mouth in sales lead but also continuously strengthen X pounds of brand recognition as a leader in autonomous driving technology.
Xiaopeng He: In 2024, we will make a further investment in the market and establish a strong new marketing team. We will upgrade from the old way of car plus internet to car plus mobile phone internet. In the past, car marketing was a centralized platform. We are now focusing more on decentralized head-to-toe social media with a wide range of users. I'll give you an example.
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Xiaopeng He: During the Spring Festival, we collected videos of car owners driving their cars and attracted more than 20,000 users. Translated by Hua Chenyu English Subs, [inaudible] We believe that through the innovation of marketing, we will not only achieve a large number of reputations but also a large number of sales clues. [inaudible] By 2024, we are looking to take our marketing strategy to the next level by creating a new and potent marketing team. We will upgrade our marketing strategies to leverage the advantages of mobile internet platforms for the automobile sector. In the past, automobile marketing was primarily dominated by PGC on centralized platforms.
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Jeff Pinyan: As part of our 2024 sales growth strategy, we need to expand and transform our sales channel network. In 2023, we accomplished a series of upgrades and optimizations to our sales channels, which included closing over 130 low performing.
Xiaopeng He: Now, we will focus more on decentralized social media platforms and make full use of the UTC from a broad base of customers. For example, we launched a campaign during the Chinese New Year to call for videos sharing of the ADAS experience by Xpeng customers. Over 20,000 customers participated in the event, spreading the reputation of Xpeng ADAS from tier one cities to hundreds of cities across the nation. In the past months, customer interest grew by over 100% on key social platforms.
Jeff Pinyan: Stores and adding over 160 strong franchise partners at two of our Jupiter projects.
Jeff Pinyan: Even this but these are impact these the closing down of this towards the end of the week organization options that we have taken had some impact on our Q4 last year into Q1. This years of sales and we believe that these changes not only improved our sales channel capabilities, but also will help us expand.
Jeff Pinyan: Our presence in the 40, new low tier cities in 2024, while we cultivate our new stores, we will continue to broaden our sales network coverage and accelerate to channel expansion in lower tier markets such as in the fifth and sixth of cities.
Xiaopeng He: 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. So the expansion and transformation of channels is what we want to achieve in 2024. We completed a round of channel upgrades in 2023 and eliminated more than 130 companies. 160, Although these adjustments will affect some of our adjustments in the 4th and 1st quarter of last year, they have been effectively improved.
Jeff Pinyan: Our objective is to increase the number of sales is towards that to 600 by the third quarter of 2024 hour sales network will continue to grow following the launch of our new brands product.
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Xiaopeng He: [inaudible] In this year, we will expand the sales network while cultivating new stores. As part of our 2024 sales growth strategy, we need to expand and transform our sales channel network. In 2023, we accomplished a series of upgrades and optimizations to our sales channels, which included closing over 130 low-performing stores and adding over 160 strong franchise partners through our Jupiter project. Even if these impacts, these closing down of the stores and the reorganization actions that we have taken had some impact on our Q4 last year and Q1 this year of sales.
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Speaker Change: Starting in the second quarter of this year as our new sales at stores are gradually open for business with our rollout and innovative a franchise model. We are asking our franchise partners to take inventory, which is equivalent to treat their sales in the half a month, we expect the new model will submit.
Speaker Change: Second the speed up deliveries and incentivize our franchisees to drive more shale well use our systems in the monitoring mechanism to manage inventory closely and ensure consistency in customer experience no matter, where they are this will also allow us to overcome the issues in the traditional franchise sales.
Xiaopeng He: And we believe that these changes have not only improved our sales channel capabilities but also will help us expand our presence in the 14 new low-tier cities. In 2024, while we cultivate our new stores, we will continue to broaden our sales network coverage and accelerate the channel expansion in lower-tier markets, such as in the fifth and sixth cities. Our objective is to increase the number of sales stores to 600 by the third quarter of 2024. Our sales network will continue to grow following the launch of our new brands products. [inaudible] Xiaohe Men Dian's gradual opening.
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Xiaopeng He: We will launch a new model of cooperation between Jing and Zhang. We will establish a short-term channel partnership for about half a month. Starting in the second quarter of this year, as our new sales stores gradually open for business, we will roll out an innovative franchise model. We are asking our franchise partners to take inventory, which is equivalent to their sales for half a month. We expect the new model will significantly speed up deliveries and incentivize the franchisees to drive more sales. We'll use our systems and monitoring mechanism to manage inventory closely and ensure consistency in customer experience no matter where they are.
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Speaker Change: We have brought together, our smart technologies powertrain and vehicle platforms onto a comprehensive intelligent platform to ensure maximum compatibility across the various models by adopting a platform based on R&D approach and economies of scale, we can reduce cost in the supply chain.
Speaker Change: And manufacturing processes, which can accelerate our goal of achieving over 25% cost reduction. Additionally, this approach has significantly improved the technology integration efficiency from a product planning perspective, both the funding and I will continue to drive our product innovation.
Xiaopeng He: This will also allow us to overcome issues in the traditional franchise's sales model. [inaudible] In the past year, we have integrated into a large smart platform. [inaudible] can speed up the realization of the 25% goal we set in the 2nd quarter of last year. And at the same time,, From the perspective of product planning, then Feng Yi and I will continue to do inner creation because inner creation is the greatest value. So the differentiated advantages of new products will be far greater than those of homogenized products. For example, X9 has recently created a new platform with four and seven large-sized cars. It is suitable for both MPV and large SUV customers.
Speaker Change: As we believe that it is the best way to maximize the value creation, we understands Dodge the differentiation factor brought by innovative products is a far greater advantage than any competitive advantage among homogenous products that could ever be for example, what's the X Knight we have.
Speaker Change: [noise] created a new category that seats at both four and seven seater vehicles, which appeals to customers who are looking for N. P V and large Suvs X Knight became the best selling model of the BV with three where they are with three rows of seats in just the first two months of deliberate.
Speaker Change: We expect to that to the delivery of X Knight in March and April will continue to increase it significantly month on month.
Xiaopeng He: So, in the first two months of delivery, it became the best-selling car model with three rows of battery. We expect that X9 will be more popular in March and April. We have brought together our smart technologies, powertrain, and vehicle platforms onto a comprehensive intelligent platform to ensure maximum compatibility across the various models. 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. Additionally, this approach significantly improves technology iteration efficiency.
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Xiaopeng He: From a product planning perspective, both Fengying and I will continue to drive product innovation as we believe that it is the best way to maximize value creation. We understand that the differentiation factor brought by innovative products is a far greater advantage than any competitive advantage among homogenous products that could ever be. For example, with the X9, we have created a new category that suits both four- and seven-seater vehicles, which appeals to customers who are looking for MPVs and large SUVs. The X9 became the best-selling model of a BEV with three rows of seats in just the first two months of delivery.
Jim: Let me go into it with a junior AG, Yes Elliot.
John: Elliot.
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Elliot: Furthermore, we are officially launching a new brand targeting the RMB 100000 to 150000 price range during the Beijing Auto show next month the market of the RMB 100200, 50000 price range has huge market potential, but it is extremely difficult.
Elliot: To provide a great product with all round competitiveness.
Xiaopeng He: We expect that the delivery of X9 in March and April will continue to increase significantly month-on-month. At the Beijing Special Exhibition next month, Xiaopeng will officially launch 10000 to 150000 new products. We all know that the price range of 10-15R has a huge market potential. But to make a car in this region, which is excellent in every aspect, and equipped with a good car with automatic driving capability, and can also achieve profitability, is a very difficult task. [inaudible] We can see that many businessmen are also exploring at this price, but can they take smart driving to the next level? After 10 years of preparation, we are finally ready to build the first AI-made car for young people.
Elliot: <unk> a high level, our dog in this price range and even more difficult to achieve our profitability at the same time. It takes a comprehensive capabilities at scale to realize that this call. Many of our peers are also explore exploring does it price range, but still non can provide excellent onto us.
Elliot: Spirits odd range. After 10 years of preparation today, we all find anybody our you Brian is committed to building. The first AI powered smart car for the young generation. This brand will be a use that species of innovation.
Elliot: First vehicle model under this new brand will officially launch and commenced the deliveries in the third quarter. We are confident that it will be the most striking and salt after a class b. The model in this segment. Furthermore, we will introduce a multiple models on this platform in China and overseas.
Xiaopeng He: This brand will be the new model that subverts innovation. The first model of the new brand will be launched and distributed in the third quarter of this year. We are confident that this will be the most eye-catching report of the A-level battery market this year. In the second half of this year, Xiaopeng will launch a new product, which will be sold in China and the global market. In the second half of this year, Xiaopeng will launch a new product, which will be sold in China and the global market. [inaudible] We have released three new products this year, and we will release more new products in the future. Furthermore, we are officially launching a new brand targeting the RMB 100,000 to 150,000 price range during the Beijing Auto Show next month.
Elliot: Markets in the coming future. In addition to this new brand the second half of this year, we will deliver a new ex palm branded model, bringing the number of new product launches. This year, two three and will unveil more new products.
Elliot: Yeah.
Elliot: Okay.
Elliot: Understood.
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Elliot: Josh.
Jonathan: Oh cool.
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Jonathan: Once again I'm going to let it citizenship Hello. This is Jonathan Tony.
Xiaopeng He: The market for the RMB 100,000 to 150,000 price range has huge market potential, but it is extremely difficult to provide great products with all-round competitiveness, including high-level RDoS, in this price range and even more difficult to achieve profitability at the same time. It takes comprehensive capabilities at scale to realize this goal. Many of our peers are also exploring this price range, but still, none can provide excellent RDoS experiences at this price range.
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Speaker Change: Josh will show you.
Speaker Change: We all know that the last decade with the decade, Oh for new energy and the next decade would be the decade of its March technology AI powered Smart E V technology and architecture are no longer just a mid to long term goals at ex palms we.
Speaker Change: <unk> already begun the process of AI defined cars that are centered on autonomous driving the vast of differentiation a chance is stemming from AI R&D capabilities and a ton of experiences.
Xiaopeng He: After 10 years of preparation, today we are finally ready. Our new brand is committed to building the first AI-powered smart car for the young generation. This brand will be a new species of innovation. The first vehicle model under this new brand will officially launch and commence deliveries in the third quarter. We are confident that it will be the most striking and sought-after A-class BEV model in this segment.
Speaker Change: We'll determine how quickly the transition from traditional ice two smart E. D's occurs and shape the auto industry's long term competitive landscape. This presents a tremendous opportunity for us that is why we have been increasing our long term investments in AI and recruited a number of top talent.
Speaker Change: For AI with international vision in the second quarter of this year, we will achieve the mass production of AI enabled us with large model capabilities. This will be the first to mass produce the ultimate.
Xiaopeng He: Furthermore, we will introduce multiple models on this platform in China and overseas markets in the coming future. In addition to this new brand, in the second half of this year, we will deliver a new Xpeng branded model, bringing the number of new products that we launched this year to three, and we will unveil more new products. So, we all know that the last decade in China has been a new era. In Xiaopeng's car, the core of automatic driving is the AR-D0 car, which has always been there. Xiaopeng's R&D ability and product experience are highly differentiated and will determine the future of smart electronics. Jiashu, Dianfu, Chuantong Nanyue, Thank you.
Speaker Change: Ultimately.
Speaker Change: I'll tell motive artificial intelligence and automotive cognitive engines in the China automobile industry, making our software smarter. Furthermore, we are firmly committed to promoting equity and inclusion in the advanced autonomous driving we will continue to lead it.
Speaker Change: Innovation of autonomous driving technology, making it affordable and accessible to a much broader customer base and enter into the international markets.
Speaker Change: We'll continue to expand our scale and strengthen our technology leadership as well as accelerating the commercialization of our industry leading technologies.
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Speaker Change: Michael This is Jason truthful.
Xiaopeng He: Thank you. Xiaopeng will continue to increase his long-term investment in AI in 2020 and attract more and more international AI leaders. At the same time, in the second quarter of this year, we will launch the first mass-produced AI self-driving car. This may be the first mass-produced car in the Chinese automotive industry with both self-driving and AI driving capabilities. We will firmly lead the high-speed autonomous driving. [inaudible] We all know that the last decade was the decade of new energy, and the next decade will be the decade of smart technology. AI-powered smart EV technology and architecture are no longer just a mid- to long-term goal.
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Xiaopeng He: At Xpeng, we have already begun the process of AI-defined cars that are centered on autonomous driving. The vast differentiation edges stemming from AI R&D capabilities and AI product experiences will determine how quickly the transition from traditional ICE to smart EVs occurs and shape the auto industry's long-term competitive landscape. This presents a tremendous opportunity for us. That is why we have been increasing our long-term investment in AI and recruiting a number of top talents for AI with international vision. In the second quarter of this year, we will achieve the mass production of AI-enabled ADAS with large model capabilities. This will be the first mass-produced automotive AI and Automotive Cognitive Engine in the Chinese Automobile Industry, making our software smarter.
Speaker Change: And then go tweedle culture, it'll have some questions and thoughtfully.
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Speaker Change: Earlier this year, we introduced the ex N G P at us it to all our users across two hundreds of cities nationwide ex N. G. P. <unk> enables intelligent driving urban will instead, the OA X N G piece of monthly active user penetration rate reached an impressive E G suite.
Speaker Change: We are proud to be the industry leader in terms of active user scale user experience and mileage penetration rate during the Chinese new year travel Rush X a N G. P helped our car owners to drive over 70 million kilometers.
Speaker Change: Average daily utilization rate of X M. G P on highways and in urban areas reached 67, and a 49% respectively.
Speaker Change: Take our excellent G P assisted driving experience it to the next level, we have set a challenging goal for ourselves we want to benchmark our ex N. G. P assisted driving experiments in core cities, such as Beijing, Shanghai, Guangzhou and Shenzhen against the way most of Robo taxi experience in San Francisco.
Xiaopeng He: Furthermore, we are firmly committed to promoting equity and inclusion in advanced autonomous driving. We will continue to lead the innovation of autonomous driving technology, making it affordable and accessible to a much broader customer base and penetrate the international market. We will continue to expand our scale and strengthen our technological leadership, as well as accelerate the commercialization of our industry-leading technology. Since the beginning of this year, we have reached more than 200 users in the Max version. In February, XNGP users' activity growth rate reached 83%.
Speaker Change: I thought what are those approaches that the inflection point of experience significant cost reduction will emerge as another key driver to accelerate is it further penetration we plan to employ innovative technology solutions to reduce X M. D P related hardware cost by 50%.
Speaker Change: Talking with the new models to be launched in the second half of this year. Our aim is to significantly boost our smart E visa competitiveness in terms of cost accelerating the widespread adoption of advanced its March technologies.
Xiaopeng He: Xiaopeng, XNGP users' activity growth rate reached the highest in the history of our data in the urban area. During the spring, XNGP opened nearly 70 million kilometers for our users. The daily usage rate reached 67%. The daily usage rate in the urban area reached 80%.
Speaker Change: Oh sure sure.
Joshua: Hey, Joshua.
Joshua: Hi, How're, you would've put us above what Susan didn't answer this well had a truth that's not cheap.
Xiaopeng He: Min Ma, Next, I have a very challenging part for the team. I hope that XMDB will be at the core of the team. This is the beginning of the key market. [inaudible] I hope to experience the transition from quantity to quality.,, I believe that the increase in capacity and the decrease in cost will be a key factor in accelerating self-driving popularity. In the second half of this year, we launched a new generation of XNG-B models. We will use a new measurement method to reduce the overall hardware cost by 50%. Earlier this year, we introduced the XNGP ADAS to all our UX users across 200 cities nationwide. XNGP ADAS enables intelligent driving on urban roads.
Speaker Change: Oh, the Australian shop ideas for the Chi children, who are genes.
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Speaker Change: Well just have to deal with that trend Joseph I'm sure that you and Joe what would you do a high top toy changeover.
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Speaker Change: We have ambitious plans to expand our business globally by taking advantage of the increasing adoption of electric vehicles and international markets and we plan to significantly accelerate the expansion of overseas business in 2024 in the second half over 2023.
Xiaopeng He: In February, XNGP's monthly active user penetration rate reached an impressive 83%. We are proud to be the industry leader in terms of active user scale, user experience, and mileage penetration rate. During the Chinese New Year travel rush, XNGP helped our car owners drive over 70 million kilometers. The average daily utilization rate of XNGP on highways and in urban areas reached 67 and 49%, respectively.
Speaker Change: We launched a G nine into the northern European market, and we were thrilled to receive a tremendous response within just the two months of its launch in Norway, Denmark. The ex Palm Jeannine became the best setting niche too large a BBB SUV emits category, which clearly shows.
Speaker Change: That our smart Tvs with advanced technology offer exceptional value to customers worldwide in the second quarter of 2024, we plan to introduce an international and less time to drive a G. Six model, which will be followed by the right hand drive version in the second half of the year we.
Xiaopeng He: To take our XNGP-assisted driving experience to the next level, we have set a challenging goal for ourselves. We want to benchmark our XNGP-assisted driving experience in core cities such as Beijing, Shanghai, Guangzhou, and Shenzhen against Waymo's Robotaxi experience in San Francisco. As our ADAS approaches the inflection point of experience, significant cost reduction will emerge as another key driver to accelerate its further penetration. We plan to employ innovative technology solutions to reduce XNGP-related hardware costs by 50%, starting with the new model to be launched in the second half of this year. Our aim is to significantly boost our smart EVs competitiveness in terms of cost, accelerating the widespread adoption of advanced smart technology. In addition to the Chinese market, we will speed up the process. [inaudible],,,,,,, We plan to launch the G6 internationalized left version on the global market in the second quarter of this year and launch the G6 right version in the second half of this year.
Speaker Change: Please not the G six will be even more successful than the G. Nine in terms of our global sales potential and will become a best seller worldwide to expand our sales channels, we will concentrate on collaborating with high quality dealers to efficiently enter key global markets.
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Speaker Change: We have achieved significant milestones in our strategic cooperation with the Volkswagen Group recently, we entered into a master agreement with them for a platform and software strategic technical collaboration and the joined the sourcing program has also been launched we are happy to see that.
Xiaopeng He: I believe that the potential of G6 sales in the global market will be even greater than G9 and will become a major global product. In terms of sales channels, we plan to launch the G6 right version in the second half of this year, more high-quality economic and trade cooperation, and efficient entry into more global markets, including Western Europe, the Middle East, Southeast Asia, and the Indo-Pacific. We have ambitious plans to expand our business globally by taking advantage of the increasing adoption of electric vehicles in international markets, and we plan to significantly accelerate the expansion of our overseas business in 2024. In the second half of 2023, we launched the G9 in the Northern European market, and we were thrilled to receive a tremendous response.
Speaker Change: Strategic synergies that have started to materialize by 'twenty 'twenty four we expect to revenue generated from platform and software services to become a meaningful in ongoing contributed to our financial results, especially to gross margin. We have created an innovative business model.
Speaker Change: In the automotive industry generating excellent returns on our R&D investment in electrification intelligent driving in AI technology X Pung and Volkswagen have formed a long term strategic alliances with complementary strengths and the mutual benefits going forward, we will work together.
Speaker Change: Unleash greater strategic synergies and address industry shifts and challenges.
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Xiaopeng He: Within just two months of its launch in Norway and Denmark, the Xpeng G9 became the best-selling mid-to-large BEV SUV in this category, which clearly shows that our smart EVs with advanced technology offer exceptional value to customers worldwide. In the second quarter of 2024, we plan to introduce an international left-hand drive G6 model, which will be followed by the right-hand drive version in the second half of the year.
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Xiaopeng He: We believe that the G6 will be even more successful than the G9 in terms of global sales potential and will become a best-seller worldwide. To expand our sales channels, we will concentrate on collaborating with high-quality dealers to efficiently enter key global markets, including Western Europe, the Middle East, Southeast Asia, and Commonwealth nations. [inaudible] We have not only signed a joint development agreement on platform and software strategic technology cooperation, but joint procurement has also been fully expanded, and the strategic cooperative effect has begun to be realized. Huo Dele, Xiaopeng He, and the public have formed a long-term strategic alliance of mutual benefits and benefits for each other.
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Speaker Change: So Jonathan.
Speaker Change: We have proactively started a new round of transformation to strengthen our competitiveness since the fourth quarter of 2023, we focus more on marketing on short video platforms, while cutting inefficient marketing spending on sales leads we faced out a number of.
Speaker Change: Under performing sales stores, and we adapt our supply chain and production to an intensive put product launch cycle for a large number of models, we face to intensify the competition and the above mentioned adjustments in marketing and sales channel in the first quarter.
Speaker Change: Challenges, both internally and externally into consideration, we now expect our total vehicle deliveries to be between 21000 to enter 22005 hundred units in the first quarter of 'twenty 'twenty four up 50.
Xiaopeng He: We will jointly carry out strategic cooperation and jointly respond to the challenges of changes in the industry. We have achieved significant milestones in our strategic cooperation with the Volkswagen Group. Recently, we entered into a master agreement with them for platform and software strategic technical collaboration, and the joint sourcing program has also been launched. We are happy to see that strategic synergies have started to materialize.
Speaker Change: 15 pointed two to 23 point of 4% year over year, we expect our first quarter revenue to be between RMB 5.8, and RMB six pointed 2 billion up 43.8 to 53 point to 7% year over year, although there would be.
Just due to transformation in the near term I have seen the initial positive results in March I believe that to the positive effects of these changes will be evident starting from the second quarter and second half of the year, we expect the growth in deliveries in second quarter of 'twenty 'twenty four will increase in <unk>.
Xiaopeng He: By 2024, we expect revenue generated from platform and software services to become a meaningful and ongoing contributor to our financial results, especially our growth margin. 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. Xpeng and Volkswagen have formed a long-term strategic alliance with complementary strengths and mutual benefits.
Speaker Change: It can be on both quarter on quarter and year on year terms.
Speaker Change: Let me share some of your own that's how we'd be Jeff.
Speaker Change: That's helpful.
Speaker Change: Thank you everyone with that I will now turn the call over to our VP of finance, Mr. James <unk> to discuss our financial performance for the fourth quarter of 'twenty 'twenty slate.
James Hu: Thank you Stefan.
Xiaopeng He: Going forward, we will work together to unleash greater strategic synergies and address industry shifts and challenges. From the beginning of the century in 2023, we have taken the initiative to launch a new round of capability changes, including more focus on short-term marketing and reducing low-efficiency cash flow. [inaudible] Since we are facing fierce market competition in the first quarter, as well as the adjustment of upstream marketing channels and other internal and external challenges, we expect that in the first quarter of 2024, the total number of transactions will be about 21,000 to 22,500, and the revenue is estimated to be RMB58 to RMB62 billion. The share price rose by 15.2% to 23.4%, and the income rose by 43.8% to 53.8%.
James Hu: Now let me provide a brief overview of our financial results for the fourth quarter of 2023.
James Hu: I'll reference RMB only in my discussion today, unless otherwise stated.
James Hu: Our total revenues were 13.05 billion for the fourth quarter of 2023, an increase of 153, 9% year over year, and an increase of 53% quarter over quarter.
James Hu: Revenues from vehicle sales were $12, two 3 billion for the fourth quarter of 2023.
James Hu: Presenting an increase of 162, 3% year over year, and an increase of 55, 9% quarter over quarter.
James Hu: The year over year and quarter over quarter increases were mainly attributable to the accelerating sales growth off the <unk>.
James Hu: In the fourth quarter of 2023.
James Hu: Gross margin was six 2% for the fourth quarter of 2023, compared with eight 7% for the same period of 2022 and negative two 7% for the third quarter of 2023.
James Hu: Vehicle margin was four 1% for the fourth quarter of 2023, compared with five 7% for the same period of 2022 and negative six 1% for the third quarter of 2023.
Xiaopeng He: Although the changes will lead to a decrease in the return of data, we can see from March that the initial results of the changes are starting to take effect. I believe that these changes will take effect in the second half of this year and in the second half of the year., Yu Ji, Er Ji Du, Jiao Fu Liang, Tong Bi He, Huan Bi, Dou Jiang De Dao, Da Fu Dao.
James Hu: 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 one nine percentage points, and secondly increased sales promotions and expiry of new energy vehicle subsidies.
James Hu: Offset partially by cost reduction and improvement in product mix.
James Hu: The quarter over quarter increase was primarily attributable to the cost reduction and better product mix.
James Hu: R&D expenses were 131 billion for the fourth quarter of 2023, representing an increase of six 3% year over year, and an increase of 0.1% quarter over quarter.
Xiaopeng He: We have proactively started a new round of transformation to strengthen our competitiveness since the fourth quarter of 2023. We focus more on marketing on short video platforms while cutting inefficient marketing spending on sales leads. We phased out a number of underperforming sales stores, and we adapted our supply chain and production to an intensive product launch cycle for a large number of models. We faced intensified competition and the above-mentioned adjustments in marketing and sales channels in the first quarter, taking challenges both internally and externally into consideration. We now expect our total vehicle deliveries to be between 21,000 and 22,500 units in the first quarter of 2024, up 15.2 to 23.4 percent year-over-year. We expect our first quarter revenue to be between RMB 5.8 and RMB 6.2 billion, up 43.8 to 53.7 percent year-over-year.
James Hu: The year over year increase was mainly in line with the development timing and progress of new vehicle programs.
James Hu: SG&A expenses were 1.94 billion for the fourth quarter of 2023, representing an increase of 10, 3% year over year, and an increase of 14, 4% quarter over quarter.
James Hu: The year over year and quarter over quarter increases were primarily attributable to the higher commissions paid to the franchise stores driven by higher sales volume.
James Hu: Furthermore, the quarter over quarter increase was also due to higher marketing promotional and advertising expenses to support the vehicle sales.
James Hu: As a result of the foregoing loss from operations was 2.05 billion for the fourth quarter of 2023, compared with 2.52 billion for the same period of 2022, and 316 billion for the third quarter of 2023.
James Hu: Fair value gain on derivative liability with 0.5 dollars 6 billion for the fourth quarter of 2023.
James Hu: This is due to our share purchase agreement with Volkswagen Group entered in Q3 until the transaction closes the fluctuations in the fair value of the forward share purchase agreement were measured through profit or loss, resulting in a noncash gain of 0.5 dollars 6 billion in this quarter.
Xiaopeng He: Although there will be challenges due to transformation in the near term, I have seen the initial positive results in March. I believe that the positive effects of these changes will be evident starting in the second quarter and second half of the year. We expect the growth in deliveries in the second quarter of 2024 will increase significantly on both quarter-on-quarter and year-on-year terms. Thank you, everyone. Next, we will have our financial VP, James, to introduce to you our financial report for the 4th quarter of 2023. Thank you, everyone.
James Hu: On December six 2023, the transaction was successfully completed.
James Hu: Net loss was $1 <unk> 5 billion for the fourth quarter of 2023, compared with $2 $3 6 billion for the same period of 2022 and $3 89 billion for the third quarter of 2023.
James Hu: On the cash front, we've achieved an important milestone of operating cash flow positive for the full year of 2023.
James Hu: This together with the strategic investment from Volkswagen helped bolster our liquidity.
James Hu: As of December 31, 2023, Oh cash had cat our company had cash and cash equivalents restricted cash and short term investments and time deposits in total $45 7 billion.
Jiaming Wu: With that, I will now turn the call over to our VP of Finance, Mr. James Wu, to discuss our financial performance for the fourth quarter of 2023. Thank you, Xiaopeng. Now, let me provide a brief overview of our financial results for the fourth quarter of 2020. I'll reference RMB in my discussion today, unless otherwise stated. Our total revenues were $13.05 billion for the fourth quarter of 2020, an increase of 153.9% year-over-year and an increase of 53% quarter-over-quarter. Revenues from vehicle sales were $12.23 billion for the fourth quarter of 2020, representing an increase of 162.3% year-over-year and an increase of 55.9% quarter-over-quarter.
James Hu: This will be a strong foundation to support our growth strategy in the years to come.
Speaker Change: To be mindful of the length of our earnings call I would encourage listeners to refer to our earnings press release for more details on our fourth quarter and full year 2023 financial results.
Speaker Change: This concludes our prepared remarks, we'll now open the call to questions.
Speaker Change: Operator, Please go ahead.
Thank you.
Speaker Change: If you wish to ask a question. Please press star one on your telephone and wait for your name to be announced if you wish to cancel your request. Please press star two if.
Speaker Change: If you're on a speaker find it please pick up the handset to ask you a question.
Speaker Change: For the benefit of all participants on today's call. If you wish to ask a question to management in Chinese. Please immediately repeat your question in English.
Speaker Change: Sake of clarity and OTA. Please ask one question at a time management will respond and then feel free to follow up with you next question.
Speaker Change: Your first question comes from Tim Hsiao with Morgan Stanley. Please go ahead.
Tim Hsiao: Uh huh.
Jiaming Wu: The year-over-year and quarter-over-quarter increases were mainly attributable to the accelerating sales growth of the G6 and G9 in the fourth quarter of 2020. Gross Margin was 6.2% for the 4th quarter of 2023 compared with 8.7% for the same period of 2022 and negative 2.7% for the 3rd quarter of 2020. 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. The year-over-year decrease was explained by, first, inventory provisions and losses on purchase commitments as a result of upgrades of existing models, with a negative impact of 1.9 percentage points.
Tim Hsiao: So with if you will which people don't Glenn T T cause your wage Huntingdon.
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Tim Hsiao: Just as you shutdown in cyclical until she says L. P. Tau that don't usually coupons will show they'll allow you to pull these opinions.
So my first question is about the product strategy.
Tim Hsiao: Because extra and plans to launch about 13, new models and features last season. The next three years.
Tim Hsiao: Which implies the copy will have new models coming to market basically every quarter starting for the second half of this year, so with such an intense launch schedule. What would you do to avoid the cannibalization from the new product and kit sales momentum after a whole lineup.
Speaker Change: Uh Huh that's over the past few years time, when we know what he stopped whenever extra launched their new cars is supposed to go about it always decline. So how shall we avoid that that's my first question. Thank you.
Jiaming Wu: Secondly, increased sales promotions and the expiry of new energy vehicle, offset partially by cost reduction and improvement in product quality. The quarter of a quarter increase was primarily attributable to cost reduction and better product quality. R&D expenses were $1.31 billion for the fourth quarter of 2023, representing an increase of 6.3% year-over-year and an increase of 0.1% quarter-over-quarter. The year-over-year increase was mainly in line with the development timing and progress of new vehicle programs. SG&A expenses were $1.94 billion for the fourth quarter of 2023, representing an increase of 10.3% year-over-year and an increase of 14.4% quarter-over-quarter.
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Jiaming Wu: The year-over-year and quarter-over-quarter increases were primarily attributable to higher commissions paid to the franchise stores, driven by higher sales volumes. Furthermore, the quarter-over-quarter increase was also due to higher marketing, promotional, and advertising expenses to support vehicle sales. As a result of the foregoing, loss from operations was $2.05 billion for the fourth quarter of 2022, compared with $2.52 billion for the same period of 2022 and $3.16 billion for the third quarter of 2022. Fair Value Gain on Derivative Liability was $0.56 billion for the fourth quarter of 2020.
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Jiaming Wu: This is due to our share purchase agreement with Volkswagen Group entered into in Q3. Until the transaction closes, the fluctuations in the fair value of the Forward Share Purchase Agreement were measured through profit and loss, resulting in a non-cash gain of $0.56 billion in this quarter. On December 6th, 2023, the transaction was successfully completed. The net loss was $1.35 billion for the fourth quarter of 2020, compared with $2.36 billion for the same period of 2022 and $3.89 billion for the third quarter of 2022. On the cash front, we've achieved an important milestone of operating cash flow positive for the full year of 2020. This, together with the strategic investment from Volkswagen, helped bolster our liquidity. As of December 31, 2023, our company had cash and cash equivalents, restricted cash, short-term investments, and time deposits in a total of $45.7 billion.
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Speaker Change: Thank you Nicole.
Speaker Change: I wish.
Nicole: Thank you very much for your question and that is a great question. So exactly in beginning of this year and this is what you're thinking on the I myself well, we have done and this was our number one task and it is very important to carryout plenty and that involves the timing for products with.
Nicole: <unk> supply chain as well as the manufacturing and the launches of products and if one would like to do that is they usually the preparation should really start two to three years beforehand and this would involve for instance of looking out to the price range the size of different cars, the capabilities and as far as timeline so, especially.
Jiaming Wu: This will be a strong foundation to support our growth strategy in the years to come. To be mindful of the length of our earnings call, I would encourage listeners to refer to our earnings press release for more details on our fourth quarter and full year 2023 financial results. This concludes our prepared remarks. We will now open the call to questions. Operator, please go ahead. Thank you. If you wish to ask a question, please press star 1 on your telephone and wait for your name to be announced. If you wish to cancel your request, please press star 2.
Nicole: <unk> with our brand new products and are these the products the NDA for instance.
Nicole: Certain products that we did not really have a lot of the volume in the pasty and therefore, our product team and they're starting from Q1 of last year, and we had to reorganize the tea and water to be able to come up with a product that is suitable for the new technology and at the moment or we simply would own.
Nicole: We need a one architecture to powertrain and two automobile autonomous driving system and this would be able to support our product and in the past we have a hard as situations whereby once a product has been launched into market I have read the supply chain wasn't strong enough to cope with the demand for dinner.
Operator: If you're on a speakerphone, please pick up the handset to ask... For the benefit of all participants on today's call, if you wish to ask your question to management in Chinese, please immediately repeat your question in English. For the sake of clarity and order, please ask one question at a time. Management will respond, and then feel free to follow up. Your first question comes from... Xiao with Morgan Stanley. Please go ahead. I have two questions.
Nicole: And at this time round of we had also looked at other ended discussed very comprehensively regarding this issue in terms of supply chain management manufacturing and we will also have the digital process in place to make sure that the older processes that are done and the followed exactly the same to me.
Operator: The first one is about the products. As Xiaopeng mentioned, in the next three years, we plan to launch about 30 new and revised models. That is to say, starting in the second half of this year, we will see a more intensive launch of new and revised models. I want to ask Xiaopeng, how can we avoid the impact of new products on old products? As we have seen in the past few years, some sales have plummeted for different models. As a result, it is hard for the group to break through the sales.
Nicole: Ensure quality improvement and production improvement our efficiency improvement as well as cost reduction you will be able to see after Q3 of this year and so we will have a different launches and so this is something that we have done for the past 12 to 18 months and as I have said.
Nicole: And this would be for instance in terms of the price range. The models of different vehicles and not only just for China, but also globally for our procurement as well and in the market. You can also see that as the market changes and it will also see our peers and competitors said they will also be playing their cards are very quickly.
Xiaopeng He: So my first question is about the protest strategy because Xtreme plans to launch about 13 new models in Feesless in the next three years, which implies the company will have new models coming to the market basically every quarter, starting from the second half this year. So with such an intense launch schedule, what would you do to avoid capitalization from the new products and keep the sales momentum of the whole lineup? So over the past few years, we noticed that whenever Xpeng launched new cars, the sales of the old model always declined. So how should we avoid that?
Nicole: So often these days it changes and adjustments will be made on a quarterly basis or every two quarters and as I have mentioned earlier in my financial reports and the statements.
Nicole: It is not only enough to focus on the short term, but also on the long term and in the meantime, it's staying flexible and to be able to adapt to the changes and what is core or being able to achieve that is really to put together a very strong team.
Xiaopeng He: That's my first question. ,, Xiaopeng Hsieh [inaudible] , So we started last year. [inaudible],,, Xinhua University, Shandong University, Guangdong University, Shandong University, Shandong University, [inaudible] , Xinhua University, Shandong University, Guangdong University, Shandong University, So in this plan, we reorganized our entire product team in the first half of last year. So what you are seeing now is that after planning the product, we use one FUYAO architecture. Liangtao Dongyi Liangtao, [inaudible],,, to ensure that all procedures are strictly enforced and that all inspections and reviews are consistent.
Nicole: Okay.
Nicole: Oh, my God unusual window.
Nicole: And as I said Michelle Qi.
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Speaker Change: And to respond to the second part of your question, which was about so from a marketing perspective, and how to avoid cannibalization and basically starting from end of last year and so we have already put in together.
Speaker Change: There's X N G P process and to ensure that everything is completely to enter the process a follow exactly the same and then secondly, when we look at different prices and different capabilities of our products and we also ensure that if there is differentiation in these regards and so those are the two main points are that we would be.
Speaker Change: Opting to avoid cannibalization.
Speaker Change: Yeah.
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Speaker Change: Are you Jewish opinions because she twice you can switching this announce what essentially is that cell phones, you struggle to get them to eat what you need to talk with that reality show truly she need to show them. So my second question is about the competition is we noticed that our competition on the vehicle prices and new products has been getting fiercer year. Today in addition to that.
Xiaopeng He: We will also try our best to share as many products as possible to increase quality, reduce costs, and improve the quality of the product. So actually, starting from the 3rd quarter of this year, you will see that we have so many products that will be released in different seasons. In fact, our current plan is to do it earlier than before, 12 to 18 months in advance, including the price, time, model, and size, in China and even some in the world. [inaudible] Yuqian Ding, Xpeng He, Jing Chang, Hongdi Gu, Pingyue Wu, Xinchi Yin, Jiaming Wu, Xinchi, So this series is If you want to face this, you have to face it.
Speaker Change: Increasing new models in the second half would be Oh this year how.
Speaker Change: How do we expand react to the price of oil and in the meantime, effectively increase our sales of existing modules. That's my second question. Thank you.
Speaker Change: So it's.
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Speaker Change #100: So with that let's say not yet Thunder. So I won't tell you. This at home no well I'll wait.
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Speaker Change #100: I was going with that you will get more simple shambaugh.
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Speaker Change #100: So your women's at cliffs.
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Speaker Change #100: So it doesn't sound as though it's helpful, but not much hope Don Cheadle, we went to Florida.
Speaker Change #100: Sort of what services do you got.
Speaker Change #100: Yeah.
Speaker Change #100: He doesn't have each other.
Xiaopeng He: First of all, we need to organize an executive that can deal with long-term planning and short-term changes. [inaudible],, Thank you very much for your question, and that is a great question. So exactly at the beginning of this year, and this is what Feng Yin and I, myself, did, and this was our number one task, and it is very important to carry out the planning, which involves the planning for products, the technology, the supply chain, as well as the manufacturing and the launches of the products. And if one would like to do this, usually the preparation should really start two to three years beforehand, and this would involve, for instance, looking at the price range, the size of different cars, their capabilities, and timelines.
Speaker Change #100: Well no no.
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Speaker Change #100: You got it and then she got tacit Orlando.
Speaker Change #100: Yeah the shelf.
Speaker Change #100: Got you.
Speaker Change #101: Michelle I don't see that I.
Speaker Change #101: I don't know, what's the sort of sits funkiness surgical moment, Joe finish the job.
Speaker Change #101: Jim.
Speaker Change #102: Well the genes that are published.
Speaker Change #103: She's a.
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Speaker Change #104: That's a good question shingle yeah cause.
Speaker Change #104: Jimmy opinion.
Speaker Change #105: Gotcha Okay.
Speaker Change #105: He will shoulder so women noise shows over unfortunately took hold in the side of switching.
Speaker Change #106: You are quite sure she go.
Speaker Change #106: No more leeway.
Speaker Change #106: Some of them.
Speaker Change #106: Sure.
Speaker Change #106: So I would just say that necessarily changed shelf changed times.
Speaker Change #106: Does that mean.
Speaker Change #106: Oh geez.
Speaker Change #106: Okay.
Speaker Change #107: Thank you for your question yes.
Speaker Change #108: To be honest. This is a really quite a tough question and I believe that so different so often that the companies that will have different ways to deal with the competition to end up for us a Midi are talking to your question from two perspectives. The first one is from a macro perspective.
Xiaopeng He: So especially with our brand new products, and these products, and for instance, certain products we did not really have a lot of volume in the past, and for our product team, and starting from Q1 of last year, and we had reorganized the team, and in order to be able to come up with a product that is suitable for the new technology, and at the moment, we simply would only need one architecture, two powertrains, and two autonomous driving systems, and this would be able to support our product. 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 this time around, we had also looked at and discussed very comprehensively regarding this issue in terms of supply chain management, manufacturing, and we will also have a digital process in place to make sure that all the processes are done and followed exactly the same to ensure quality improvement, production improvement, efficiency improvement, as well as cost reduction.
Speaker Change #108: I think it's really important to about to building up the systematically a very strong foundation and the second one is all about the innovation and the innovation, having innovative product is the only possible way to avoid competition and certainly we are always pursuing quality first and then.
Speaker Change #108: To scale, if you do it the other way around I Wonder if you start with a scale for us and it would be very difficult to to improve our quality and secondly, if we talk about it on the short term a micro level and I think that's a half of the following areas he and the first one would be marketing and.
Speaker Change #108: We are always looking at how to spend less money to improve the marketing results and secondly, it's all about the sales and service capability.
Xiaopeng He: You will be able to see after Q3 of this year, and we will have different launches, and this is something that we have done for the past 12 to 18 months, and as I have said, this would be, for instance, in terms of the price range, the models of different vehicles, and not only just for China but also globally for our procurement as well. And in the market, you can also see that as the market changes, and we'll also see our peers and competitors, they will also be playing their cards very quickly, and often these days, changes and adjustments will be made on a quarterly basis or every two quarters. And as I have mentioned earlier, in my financial report and statements, it is not only enough to focus on the short term but also on the long term, and in the meantime, stay flexible and be So what you just asked about how to avoid these products in the marketing system, I will only say two points.
Speaker Change #108: Earlier last quarter of 2023, and so we have terminated 100 into 30 dealers and those were the underperforming ones yet and by Q2. This year. Once we have buildup of our U dealer partners and matured and nurture the old Isa dealers anyway.
Speaker Change #108: Belief that this is the dealers who would help us to be able to further promote our vehicles in the third and fourth tier cities and the third would be it is about to the functionality and the capability of your product and as though from the micro level. It is all about mark.
Speaker Change #108: Getting pluses, saying, what's the plusses surveys and plus your product.
Speaker Change #109: Sure that's helpful. Joe Devito, Thanks for sharing the details thank you.
Speaker Change #110: Your next question comes from Meng Zhang Li with Bank of America. Please go ahead.
Speaker Change #111: Oh sure sure.
Speaker Change #112: Sometimes Ohio, but don't know what's there.
Speaker Change #113: Can you go into you know a suite Guangxi woman gun Dow Jones to the Hudson.
Xiaopeng He: ???????, Yaocheng Zheng, Unknown Executive, Tim Hsiao, Bin Wang, Paul Gong, Yuqian Ding, Alex Xie, Xiaopeng He, Jing Chang, Hongdi Gu, Pingyue Wu, Xinchi Yin, Jiaming Wu, Xinchi Yin, Jing Chang, Alex Xie, Xipeng He, Jing Chang, Hongdi Gu, Pingyue Wu, Xinchi Yin, Jing Chang, Wang [inaudible] In the whole product strategy plan, we have already broken the gap between different products in terms of price and product capabilities from the beginning. [inaudible] ????? [inaudible] And to respond to the second part of your question and which was about from a marketing perspective and how to avoid cannibalization and basically starting from end of last year and we have already put in together this XMTP process and to ensure that everything is complied and the process are followed exactly the same. And the second V and the one we look at different prices and different capabilities of our products and we also ensure that there is differentiation in these regards. So those are the two main points that we would be adopting to avoid cannibalization.
Speaker Change #114: Children at home and I don't know some Oh geez charges, Oh isn't that good dogs on the east you're going to have the huddle switching is on the hook something up alcohol. It's you don't go and all of this is what she does a.
Speaker Change #114: A couple of case, you got anything to Vancouver tea going to disappears quality Shea our bunks with yourself.
Speaker Change #114: In boots UK contact call. It just goes back to the.
Oh, no go with or without a bunch of them not just with Eagle one.
Speaker Change #115: So my first question is regarding your cooperation we saw Volkswagen could you give more quantified.
Speaker Change #115: I'll answer regarding your comp ratio for example, how many component that you are able to co purchase and always thought a Volkswagen and Oh, how much close to or do we expect to save.
Speaker Change #115: So with Eagle wage.
Hi, This is Charles.
Charles: We announced that we have entered into a master agreement for the platform and the sulfur services a that is a major development milestone flowers for the projects. We're working together based on how much the nine platform.
Charles: In the meantime, we also enter into the joint procurement program.
Charles: We will join us for cute.
Charles: Components for both our models on top of the Jeannine platform and also the Volkswagen.
Charles: Most of our business model was building on our platform I would say that does that's a very high degree of the platform in the components sharing and through the joint procurement program also leveraging most of Atkins World class supply chain capabilities, we have seen the initial good.
Xiaopeng He: Thank you, Mr. Xiaopeng, for your answer. My second question is about competition. As mentioned in the press release, the competition in the market for new products is getting worse and worse. In addition to the increase in the number of new car models, I'd like to know how Xiaopeng Motor Company is dealing with the current price war and improving the sales of existing models. So my second question is about the competition. As we noticed, competition for vehicle prices and new products has been getting fiercer year to day. In addition to the increase in new models in the second half of this year, how will Xpeng react to the price war and, in the meantime, effectively increase sales of existing models? That's my second question. [inaudible] I believe that every car manufacturer has its own way of responding to a problem. I will give you a very simple example.
Charles: It's coming from Philadelphia on the joint sourcing program and we believe that the such joined stocking program will continue to.
Charles: Allow us to optimize our cost structure and also quickly bring our bom cost structure to the competitive level in the market.
Also I think last point is that the shuffle mentioning in his remark.
Charles: On the revenue generating them from the platform the software and services well start to kicking in from 2024 and it is a recurring once you. Once you started to recording our P&L there won't be a recurring revenue and we will have meaningful impact.
Charles: A meaningfully positive impact to our GP margin and so we'll continue to.
Charles: Gave us.
Charles: Positive contribution to our profitability.
Charles: Okay.
Speaker Change #117: Thank you Charles not with you show the Tioga when do you want to know the one thing Oh man shouting Ghansham the mono project.
Xiaopeng He: I believe that the most important way to deal with this kind of competition is to [inaudible] I think this is the first thing I want to say. Second, we need to have a clear product plan to find innovation in our own products. Xingyi Zhang, Unknown Executive, Tim Hsiao, Bin Wang, Yuqian Ding, Alex Xie, Xinchi Yin, Jing Chang, Hongdi Gu, Pingyue Wu, Xpeng He, Jing Chang, Hongdi Gu, Tina Hou, Xinchi Yin, Jing Chang, Hongdi Gu, Pingyue Wu, Xpeng He, Jing Chang, Hongdi Gu, Tibet, Yunnan, Xincheng, Tianjin, Hainan, Xincheng, Huizhou, Guangzhou, Guizhou, Xinjiang, Zhejiang, Zhejiang, Hainan, Xinjiang, Guangdong, Guangdong, Guizhou, Guizhou, Hainan, Zhejiang, Hainan, [inaudible] In the case of quality, we need to look at the scale. Not the scale first, but the quality. Because after the scale, if you want to improve the quality, it's more difficult.
I don't want to Dodgers or you wish to have the town's yesterday it sounds like Oh.
Oh, no bounds titled I'd say, a couple of pages of cheap money tends to be in so it's totally chargers.
Speaker Change #117: 270, the whole <unk> shotgun touches it seemed to be there to see.
Oh, there you go to the Oh Jeez, a whole do you want to just do a Google and you do the bison way women's isn't going to go Oh, not tempted to take Oh does it sounds like kind of hot money just not union is at the time, some time ago Michel Pumpkin pie, that's a good competitor.
Speaker Change #117: So who knows what it's doing.
Josh Vogel: Josh answer that.
Josh Vogel: So did you guys do the other demand it sounds like there's some to the opinion right now with that I'll toss off but not what does it mean to pay that off.
Speaker Change #119: You bet.
Speaker Change #119:
Speaker Change #119: But it doesn't want to deal with all the while you're juncture, John let's look at each of those.
Speaker Change #119: It's been attempting to other countries.
Speaker Change #119: Just troubled waters once you're into the expanded assembly and tell them that you can sort of Canadian county to.
Speaker Change #119: We're just not we don't know if I Schussel my second question's related to Europe.
Mona project PAH doctors, so Oh, how do you think about your integration level between our ex Com brand ourselves.
Xiaopeng He: So in the past year, we have been pursuing quality and low-cost products. [inaudible] So these are the three from the perspective of macro, but from the perspective of short-term micro, we can do more than three things. , We believe we can get double the benefits with less money. Zhang, Unknown Executive, Tim Hsiao, Bin Wang, Paul Gong, Yuqian Ding, Alex Xie, Xiaopeng, [inaudible] So we look forward to the launch of the new store starting in the second quarter of this year. Jianli Binjie
Speaker Change #119: Our project right.
Speaker Change #119: Could you also keep honest more details about our progress I'll call you to lunch to be model and also to see model.
Speaker Change #119: And and then also lastly, east Oh, Tom is driving a function is provided by Mona Simo to X pilot is three point I'm sorry, She said.
Speaker Change #119: Hey, Matt It's Brian Let me address your question on this Mona project, Yes, we're very excited that we'll be launching a the Mona sub brands are in a very short time and also we think it won't be a I would say one of the blockbuster products in this category.
Speaker Change #119: The reason, we think there's a potential is because one we think it's a very well designed product.
Xiaopeng He: After it becomes a well-known store, we think that the sales and service capabilities are particularly fast in the next three or four-tier cities. The other one is the ability to constantly improve the product. So, in terms of the micro level, it is what I said before, win-Xiao, win-product. Thank you for your question. And to be honest, this is really quite a tough question.
Speaker Change #119: I think you know I would say best in class design as well as in some of the Oh functions, especially as they too are smart function. We think it will have differentiation compared to similar products in this category.
Speaker Change #119: Same time, we have done a lot of effort trying to make sure. The product is also very competitive from both cost as well as.
Speaker Change #119: Our competitiveness in terms, the focusing on both to see and to be channels. So needless to say, we have high hopes for the smaller product and also.
Xiaopeng He: And I believe that different alternative companies will have different ways to deal with competition. And for us, really, to answer your question from two perspectives, and the first one is from a macro perspective. And I think it's really important to build up a systematically very strong foundation. And the second one is all about innovation.
Speaker Change #119: In terms of strategy, we think it will have actually a two pronged a channel. So I think it will start from the two C channel first to make sure. It will be well received as a premium product and then followed by I think to be channel itself. So that's likely to be the same.
Xiaopeng He: And innovation, having innovative products, is the only possible way to avoid competition. And thirdly, we are always pursuing quality first and then scale. If you do it the other way around, if you start with scale first, it would be very difficult to improve quality.
Speaker Change #119: One of our marketing from the specific product our functions and capabilities, our puppy leave that to the launch event to give the full details, but needless to say again, we think it's a very competitive product. We also have plans to steadily improve.
Xiaopeng He: And secondly, if we talk about on the short term micro level, I think that it would have the following areas, and the first one would be marketing. And we are always looking at how to spend less money to improve marketing results. And secondly, it's all about the sales and service capability. As I talked earlier, in the last quarter of 2023, we terminated 130 dealers, and those were the underperforming ones. And by Q2 this year, once we have built up our new dealer partners and matured and nurtured all these dealers, we believe that these are the dealers who would help us to be able to further promote our vehicles in the third and fourth tier cities. And thirdly, it is about the functionality and the capability of your product. And so from the micro level, it is all about marketing plus sales, plus service, and plus your product. Xie Xie Xiaopeng for sharing all the details. Thank you. Your next question comes from Ming Sun Li with Bank of America. Please go ahead.
Speaker Change #119: On this product based on additional I would say our development plan for later this year as well as early next year. So this is OK also gonna be improving as the platform in this eight class. So again I mean I think this is a lot to expect for and I think I would love to all of you to wait until.
Speaker Change #119: So our launch event, which will happen probably very soon.
Speaker Change #120: Thank you Brian.
Speaker Change #120: Yeah.
Bin Wang: Your next question comes from bin Wang with Deutsche Bank. Please go ahead.
Bin Wang: So as a company and so you go into the corner you cheering your macro thoughts yeah.
Bin Wang: Maybe you thought although we're making it I got kind of also the occupy by the Chinese have yeah, Tim I'm. A simple example, partially comes from what you end up what do you if I may and it was a little more color what you say because people want my thoughts on that.
Bin Wang: I'm on with Tmall. So much okay. So shouldn't pick up are you talking about Eaton Rockwell if I'm gonna want I'm not sure what the right. So you can see that equal up until he may want to be the hot humid we got baldino shutdown. That's OTT, if you didn't get a tool called <unk>.
Bin Wang: Actually we talked a lot about them, yet and that's the way Oh.
Speaker Change #122: Thank you Scott.
Speaker Change #123: My question is about the full year.
Speaker Change #123: Plentiful biotech at Sabra media reported that you're talking about 260 to 280000 units.
Operator: Thank you, Mr. Xiaopeng and all the leaders. I have two questions. The first question is about our cooperation with the public. Last year, the public became our shareholder. I would like to know more about the cooperation with the public. In addition to the cooperation in terms of design, such as collective purchasing or other cooperation, can the administration provide some more quantitative help? For example, how many parts can be purchased together? Or how much help can be provided in the front?
The wide range do you think about if I was curious what you mean in the each quarter you have 200, even still about 75000 units.
Monthly 25000, so if you well you can actually still get my father, you have a true.
Speaker Change #123: Sorry did you watch what goes on commitments from TD promised though tend to be in front of them or not and how much ammonia, Florida export.
Speaker Change #124: Thank you.
Speaker Change #124: Okay.
Speaker Change #124: Hey, Ben it's Brian again, I think good try but I think all of that.
Brian: The usual, we do not give out specific annual guidance is delivery numbers, Oh policy, but what I can say at least for our perspective is we are very optimistic about this year given the product lineup and the launch schedule. We think we can achieve on a full year basis are much greater than market.
Operator: This is my first question. So my first question is regarding your cooperation with Volkswagen. Could you give more quantified answers regarding your cooperation? For example, how many components are you able to co-purchase along with Volkswagen? And how much cost do you expect to save?
Brian: Sort of a growth rate and I think we will be gaining significant market share increases. That's our expectation are we also think this year well, but will it be similar to last year in terms of our first half will be light given obviously the.
Charles Zhang: Thank you. This is my first question. Hi, my name is Charles.
Operator: I think a few weeks ago we announced that we had entered into the master agreement for the platform and the software services. That is a major development milestone for the projects we're working on together based on our G9 platform. In the meantime, we're also entering into a joint procurement program that we will join to procure the components for both our models on top of the G9 platform and also Volkswagen's models built on our GMG9 platform. I will say that that's a very high degree of platform and component sharing, and through the joint procurement program, also leveraging Volkswagen's world-class supply chain capabilities, we have seen initial good results coming out of the joint sourcing We believe that such a joint sourcing program will continue to allow us to optimize our cost structure and also quickly bring our own cost structure to a competitive level in the market.
Brian: The industry dynamic as well as our product launch schedules, but we think we will start to pick up steam towards the second.
Brian: Towards the second quarter as well as the second half based on the changes, we're making ourselves in marketing channels as well as our product launch in the third and fourth quarter for ammonia I think it's a like I said, it's a very exciting product will be launching the two C channel first off which we think it will likely happen in the second or third quarter.
Brian: Delivery and also for the AR to be China would probably be a few months behind we do not have a specific number to give you in terms of what the Mona I know expectation is but I think as you can tell us to be a successful product in the H class category.
Brian: You will have to deliver Oh, that's sort of a range of around about 10000, a month type of a scale to be successful. So it always stay at a steady state, we think ammonia should be achieving that level of sales.
Brian: So again I think I don't have the specific numbers, but you can tell that this is how we envision the full year delivery will look like what.
Brian: Yeah.
Speaker Change #126: Oh yeah.
Speaker Change #127: So and let me just comment on that again this year, we won't be making significant expansion efforts into many new markets I think that we will start to see the oh the delivery results from those efforts and I think up on the volume perspective, we think we won't be generating.
Operator: Also, I think the last point is that, as Xiaopeng mentioned in his remark, the revenue generated from the platform and the software services will start to kick in in front of 2024. Once we start recording our P&L, it will be a recurring revenue and will have a meaningfully positive impact on our GP margin. It will continue to give us a positive contribution to our profitability. Thank you, Charles.
Speaker Change #127: Tens of thousands of our sort of delivery in pharma international sale.
Speaker Change #127: I'd like to say what do you hope it gives you a call unique cause somebody toxin anyway, we got too chunky now how are we thinking.
Speaker Change #127: So I was hoping to so much indeed.
Speaker Change #127: And for the Chihuahua terminal in kind of a woman who can update you soon.
Speaker Change #127: You cannot do quite tissue matrices that until it's actually it's really funny.
Speaker Change #127: Maybe some context, although we can always stood out to thanks, Tony said.
Speaker Change #127: I thought the study however, while we want to bid situations change.
Speaker Change #128: Describe whats the technology differentiation between the excellent technology, and Huawei and how we maintain our leadership. Thank you.
Operator: Now, I'll continue with my second question. My second question is about the product of the Mona Project that is expected to be launched next month. Of course, I know that it will be launched next month, so I can't say too much about it now. But could you please connect to this side and tell us a little bit about that product?
Speaker Change #128: Sure.
Speaker Change #129: And so you can handle type items.
Speaker Change #130: So you should Oh God, there's a lot of xiaomi.
Speaker Change #130: No you shouldn't you don't want to go.
Speaker Change #130:
Speaker Change #130: Okay Cool cool junction of settling the issue.
Speaker Change #130: Just sit home and Genesis once you don't always system.
Speaker Change #130: Phase I won't say, how long you showed a coach.
Speaker Change #130: So Holly commentary.
Speaker Change #130: Hum.
Speaker Change #130: What does all that kind of thought that you don't get any really millimole corridor chinchilla.
Hongdi Gu: Specifically, in the second half of this year, it will be launched first in 2B and then in 2C. In addition, if we look at the integration of 100 points with the product of the Mona Project, what do you think about this year's product and the integration of our Xiaopeng brand, whether it's the integration of the platform or the integration of autonomous driving, the integration of the whole design and manufacturing? How many points can it reach this year? Or can it reach 100 points next year?
Speaker Change #130: Personally Cory.
Speaker Change #130: So we're talking about.
Speaker Change #130: The woman that kind of what's your initial phone faithfully yes, you got it.
Speaker Change #131: Hi, Michelle.
Speaker Change #131: So that's what she did.
Speaker Change #131: It's just that's what it is it was it went.
Speaker Change #131: Went away and so don't guesses.
Speaker Change #131: She got functional assisting those airplanes.
Speaker Change #131: Or do you know do.
Speaker Change #131: Do you assume that neat.
Speaker Change #131: Yeah.
Speaker Change #131: Sure.
Some of this agenda.
Speaker Change #131: So good.
Speaker Change #131: So he's on towards that kind of a higher number.
Speaker Change #131: Number one about how to say it couldn't.
Speaker Change #131: No change of heart.
Speaker Change #131: Seasons, so much engine.
Speaker Change #131: Sure.
So yes, that's it.
Operator: Yes, this is my second question. I also want to ask if it is possible to understand that the high-end auxiliary drive that this product will be equipped with next month is almost the same as our current X-Pilot 3.5 level of high-end auxiliary drive.
Speaker Change #132: So your thoughts on those.
Yes.
Speaker Change #132: Those creatures of habit change.
Speaker Change #132: Sure.
Speaker Change #132: Okay.
Speaker Change #132: Well know how they will shape doesn't go up.
Speaker Change #132: Okay.
Speaker Change #133: You don't want to just sit on the O U G about 10 minutes with us.
Speaker Change #133: D G E shelves without telling me what did you just send you those the shuffle towards.
Speaker Change #133: Uh huh.
Operator: My second question is related to your MONA project product. How do you think about your integration level between the Xpeng brand as well as the MONA project brand? Could you also give us more details about the progress for you to launch the 2B model and also the 2C model? And also lastly, are the autonomous driving functions provided by MONA similar to X-Pilot 3.5? Thank you. Hey Ming, it's Brian
Speaker Change #133: That's always challenging right.
Speaker Change #134: That's about it.
Speaker Change #134: Ya Li.
Speaker Change #134: To go from here.
Speaker Change #134: Uh huh.
Speaker Change #134: We'll go into some sort of promotion it sounds cool.
Speaker Change #134: Send an ankle a bunch of general guess faithful tivo.
Speaker Change #134: E G.
Speaker Change #134: Sure.
Speaker Change #134: Okay.
Speaker Change #134: Gordon G. That's at all from that change or that agenda.
Speaker Change #134: Sure John E G sync with each other.
Speaker Change #134: So those are all no choices well what should I.
Speaker Change #134: Jay.
Speaker Change #135: Oh no no no what would you do you have all sorts of thoughts just don't justice to that since you got a cell phone.
Speaker Change #135: People are way up in 'twenty two.
Daniel let.
Hongdi Gu: Let me address your question on this Mona project. Yes, we're very excited that we'll be launching the Mona sub-brand in a very short time. And also, we think it will be, I would say, one of the blockbuster products in this category. The reason we think there's potential is because one, we think it's a very well-designed product, has, I think, you know, I would say, a best-in-class design, as well as in some of the functions, especially as related to smart functions, we think it will have differentiations compared to similar products in this At the same time, we have done a lot of work to try to make sure the product is also very competitive in terms of both cost and competitiveness in terms of focusing on both 2C and 2B channels.
Let me check.
Speaker Change #135: Taking a temporary J code.
Speaker Change #135: Oh geez.
Speaker Change #135: Yeah.
Speaker Change #136: Thank you very much for your question actually one military even though from a Bollywood making this a statement to eyeball it happened to be a monday audience and that was sitting down.
Speaker Change #136: That is in the audience and so I would say that so far while we and X pong and both companies. So we are working together and putting in our FRE into something that so they both they truly believe and while we obviously is an excellent Chinese a technology company and we have a lot of respects.
Speaker Change #136: And for them I would say that so both companies that have our unique advantage see Enzo for X Pony and.
Speaker Change #136: In terms of what we have done and are we really starting to gel working more on our brands as well as our marketing from the end of last year and in terms of autonomous driving and I believe thought. So there are four areas. So that would really be very important and number one would be the capability or functionality.
Hongdi Gu: So, needless to say, we have high hopes for this Mona product. In terms of strategy, we think it will actually have dual-pronged channels. I think it will start on the 2C channel first to make sure it will be received as a premium product, and then followed by, I think, 2B channel sales. So that's likely to be the sequence of our marketing. From the specific product functions and capabilities, I will probably leave that to the launch event to give the full details.
Speaker Change #136: You have your cards second would be safety and that certainly would be the cost of the vehicle and fourthly would be how international that you can expand into for your products. The anti to obtain more revenue and profit in China, obviously, we can see that Oh.
Speaker Change #136: Autonomous driving is that something that everybody loves and however in terms of the general public they demand. It is much quite yet met and this is something that we need to work hard on me in the next 18 months and so we can see that for instance in terms of the application and the <unk>.
Operator: But needless to say, again, we think it's a very competitive product. We also have plans to steadily improve on this product based on additional, I would say, development plans for later this year as well as early next year. So this is also going to be improving as a platform in this A-class. So again, I think this is a lot to expect, and I think I would love all of you to wait until our launch event, which will happen probably very soon. Thank you, Brian. Your next question comes from Bin Wang with Deutsche Bank. Please go ahead.
Speaker Change #136: All areas.
And and all round the application and the cost of reduction.
Speaker Change #136: Well I said more marketing work starts to be carried out and are in the next 18 months. In addition, I do believe thought so huge changes will be blocked by with the.
Operator: According to the media, the sales volume for the whole year is about 2.5 to 2.8 million this year. I would like to ask if this target is a reasonable range for the company. If this is the target, the bank has to sell up to 80,000 units every quarter and sell 25,000 units every month. When can we achieve this target of 25,000 units per month? And if it's convenient, can you tell me how much the help from Didi will cost?
Speaker Change #136: Large model being applied to autonomous driving and this is something that Oh, we should watch out for it and we believe this will become bring great benefits to the industry and since the first quarter of last year. We have also worked hard in bringing down the cost as well as well.
Speaker Change #136: Working more on our marketing and the same are so far away and so what we want to do is we want to become an accident. The company, but then coming back to autonomous driving I would still say that so we are a company that is more specialized in vehicle and autonomous driving is really our strength the envisaged outward.
Operator: Because Mona is a 2B company, is there a guaranteed sales volume for Didi? And how much is the export target this year?
Speaker Change #136: Uniqueness that thank you.
Speaker Change #137: Thank you very much.
Speaker Change #137: Your next question comes from Tina Hu with Goldman Sachs. Please go ahead.
Operator: My question is about the full-year 2024 volume target. According to the media report, your target is 260 to 280,000 units. Is that in the wide range you are thinking about?
Tina Hu: Okay. So you are going is how long do you go in tissue quantities that meant you guys didn't keep pay the English high sugar on the telephone.
Tina Hu: I should add though.
Tina Hu: Joseph and good, though a millennial households.
Tina Hu: No it wasn't without a woman that's usually social.
Tina Hu: Sheboygan that Michelle Pumpkin pie.
Hongdi Gu: If that's the case, which means in each quarter, you actually need to sell about 75,000 units. You provide 25,000 monthly. So when you can achieve 25,000, if that's true, separately, do you actually have some commitments from Didi to have a certain 2B from Mona? And how much volume from the export? Thank you. Hey Bing, it's Brian again.
Speaker Change #139: That's the key.
Speaker Change #139: Social a.
Speaker Change #139: The whole kind of Zip code.
Speaker Change #139: In South Atlanta, $2 from Daniel you schedule shifts how you why not just yours do they shouldn't be paid anyway.
Speaker Change #139: So you should see the Molly Molly.
Speaker Change #139: Molly shipper should be you do those help them keep Pat sholl with easy to do you go into a phase.
Speaker Change #140: Hi, Thanks management for taking my question. So the first question is about our new brand.
Speaker Change #141: In terms of the pricing secondly, there's actually quite a separate from the shop home brand. So wondering what our sales channel be a share the current sales channel or have a separate sales channel considering the target customer segment would be differentiated.
Hongdi Gu: I think they will do a good job, but as usual, we do not give specific annual guidance, delivery numbers, or our policy. But what I can say, at least from our perspective, is that we are very optimistic about this year, given the product lineup and the launch schedule. I think we can achieve on a four-year basis a much greater growth rate, and I think we will be gaining significant market share increases. That's our expectation.
Speaker Change #141: And then the second also related is that considering we are at a lower price range for the new brand wandering the designed gross margin level would it be also lower than the excellent brand. Thanks.
Speaker Change #142: Sure sure she managed to get all of them.
Speaker Change #142: Are you quite sure substitute you'll place I shouldn't touch freedom and that kind of hit what do you call out how does that.
Hongdi Gu: We also think this year will be similar to last year in terms of the first half being light, given obviously the industry dynamics as well as our product launch schedules. But we think we will start to pick up steam in the second quarter as well as the second half, based on the changes we're making in our sales and marketing channels, as well as our product launch in the third and fourth quarters. For Molna, I think, like I said, it's a very exciting product. We'll be launching the 2C channel first, which we think will likely happen in the third quarter as far as delivery is concerned. And also for the 2B channel; we'll probably be a few months behind. We do not have a specific number to give you in terms of what the Molna expectation is.
Speaker Change #142: Mr. Lucas you mean that to me and she had a phone for a woman to halt the chance of Toledo changes on sheet alone.
Speaker Change #142: Sure.
Speaker Change #142: Indiana holding.
Speaker Change #142: Full batch at all either take them and get them thinking about something.
Speaker Change #142: No. We're talking about you don't want to you, which I'm sure you're going to see that you have.
Speaker Change #142: Yeah.
Speaker Change #142: Okay.
Speaker Change #142: Thank you very much for your question with respect to the new brand and to end up for the new brands, we will be launching them into our existing stores and we will have independent exhibition wholesale for the new branding and.
Speaker Change #142: In the future. We are also looking at building more dealerships in the more independent stores. It dedicated to these new brands and we hope that there will be hundreds of visa you independent.
Hongdi Gu: 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 range around about 10,000-month type of scale to be successful. So obviously, at a steady state, we think Molna should be achieving that level of sales. So again, I don't think I have specific numbers, but you can tell that this is how we anticipate the four-year delivery will look for us. All of these sales are also, let me just comment on that, again, this year we will be making significant expansion efforts into many new markets. I think that we will start to see delivery results from those efforts, and I think from the volume perspective, we think we will be generating tens of thousands of these sorts of delivery from international sales. Okay, thank you.
Speaker Change #142: Stores are for the new brands is dedicated to them and with respect to your other question and I'll invite you how it works.
Speaker Change #143: Finance Vpns and Mr. James Lu to take your question.
James Lu: Yeah on the on the margin front for Mona typically we won't give a specific margin for particular, calling as Brian and supplements in mono, we'll be focusing on the.
James Lu: Eight class segment.
Speaker Change #145: Obviously, you know we won't imagine that each segment products to make the highest profit in our portfolio, but overall.
Speaker Change #145: Our expectation is mono will achieve healthy positive margin.
Speaker Change #145: For for this brand overall and as Brian mentioned Mona.
Speaker Change #145: That will be launched and the Beijing Auto show will just be the first model there'll be additional models, that's coming through through the platform.
Speaker Change #145: The other thing that over the long term.
Operator: My second question is about autonomous driving because Huawei said at the meeting the other day that Xiaopeng's car is currently number one, but they want to change that situation. I want to ask where our technology and Huawei's technology are leading, and how we can continue to maintain an absolute lead in autonomous driving in the future. Okay, let me translate. In a recent conference over the weekend, Huawei said that Xpeng is the absolute leader in autonomous driving.
Speaker Change #145: We might be thinking about as you know a different commercialization strategy in terms of our software and we will give more.
Speaker Change #145: Guidance and information in the.
Speaker Change #145: Next couple of quarters and the other thing I would mention is in terms of Mona because it's large scale the target customer base and you know our partnership with D. D. So.
Speaker Change #145: So they will help us to market the product.
Speaker Change #145: Eventually we expect relatively lowest sales associated sales costs for Mona compared to no shelf on brand overall.
Speaker Change #146: Oh, okay.
Operator: However, Huawei wants to make the situation change. Can you describe the technology differentiation between the Xpeng technology and Huawei and how you maintain leadership? Thank you.
Speaker Change #146: Oh, they all go in tissues that means that I reaffirm the zelle football gosh, Onvia, whether would you wash water X Joel kind of that transition you always you are going in the P. G. Oh gosh I do go to try and get your.
Xiaopeng He: [inaudible],, I think we are working hard on the same track with Huawei.,,, From my point of view, in the field of autonomous driving, we have a long history. [inaudible] From our point of view, I think Xiaopeng's main goal is to improve our...?? I think that autonomous driving needs to pay attention to several directions. I think the first one is ability.
Speaker Change #146: JAKKS to a gel 40, Iowa, Sandra T shirt that was Oh <expletive> guys pushing me on the call going ramping team Oh Gee is dealt with synergies you are chasing ciampino sure I'll, let you go hot that you're female so when an M. P. D. So my second question is regarding I think in the February.
Speaker Change #146: We are delivery report, we mentioned that there were some supply chain bottleneck.
Speaker Change #146: Regarding two X nine before the Chinese new year, and the company expect after Chinese new year odd these bottlenecks would be resolved and the delivery volume of X nice should increase and so just wondering what kind of a bottleneck where are we facing and also going forward how.
Speaker Change #146: How shall we how do we plan to prevent these similar situations from happening again.
Okay.
Xiaopeng He: ?????? The second is safety, [inaudible] Zhang, Hongdi Gu, Pingyue Wu, Xinchi Yin, Jiaming Wu, Tina Hou, Xinchi Yin, Jing Chang, Hongdi Gu, Pingyue Wu, Xiao Peng, Xinchi Yin, Jing Chang, Hongdi Gu, Pingyue Wu, Yiyue, From my point of view, [inaudible] ???????????????????, Today we see that there are many people in China who like autonomous driving, [inaudible] Xinhua University, Shandong University, Guangdong University, Shandong University, Shandong University, [inaudible] ?????????, I think these three points are Xiaopeng and Jing Chang's strengths. But I believe that in the next 18 months, we will see huge changes in these areas. ?????????????, ?????????????????? ?????????, ?????????????????????, I hope that we will be like Huawei in the future. Of course, I think that Xiaopeng is more focused on his own and his partners' self-driving cars than Huawei. I think that the focus is more capable.
Speaker Change #146:
Speaker Change #147: I'm done.
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Speaker Change #147: Uh huh.
Speaker Change #147: The going in and tell them.
Speaker Change #148: Thank you Holly.
Speaker Change #147: And what are the G clip cooking at.
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Speaker Change #147: And that's what got us going into a whole lot of cases, Joe I mean, they're going to end up with a whole bunch of sugar.
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Speaker Change #149: That's all the questions.
Speaker Change #150: I wouldn't take what tradeoffs shortly as to the elements.
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Speaker Change #152: Oh, okay.
Speaker Change #152: What you just said you any level of intelligence.
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Speaker Change #152: Yes.
Speaker Change #152: It goes GA.
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Speaker Change #153: She until ballclub junior home and I hope that's helpful.
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Speaker Change #154: Dave will shadow, Okay, Jason Joseph.
Speaker Change #155: Well Linda Shuang.
Speaker Change #156: And when she wants it.
Speaker Change #157: Let's see.
Speaker Change #157: So we moved up Jewish ritual, how agile to those long term that's what C. G.
Xiaopeng He: [inaudible] Thank you very much for your question. Actually, when Mr. Yu Chenglong from Huawei was making this statement, I happened to be among the audience, and I was sitting downstairs in the audience. And I would say that for Huawei and Xpeng and both companies, we are working together and putting in our efforts into something that we both truly believe in. And Huawei is obviously an excellent Chinese technology company, and we have a lot of respect for them.
Speaker Change #157: Yeah.
Speaker Change #158: That is an excellent question and thank you for putting this forward. So in terms of O for the supply chain issue that you had mentioned you encountered by X nine ended February after Chinese new year Theres a problem has already been resolved. He ends I guess indeed in the past and we have also encountered a similar issues.
Speaker Change #158: Turning he we have also been reflecting how to resolve this problem and so since taking over the supply chain myself personally last October he ends up we have combed through a new management system and so we are now reducing the number of suppliers and we may need voltage.
Xiaopeng He: I would say that both companies have their unique advantages. And for Xpeng, in terms of what we have done, we really started working more on our brand as well as our marketing at the end of last year. And in terms of autonomous driving, I believe that there are four areas that would really be very important. And number one would be the capability or functionality of your car. Second would be safety.
Speaker Change #158: On these high quantity.
Privately a private Chinese companies of which are listed and those are the ones who can also provide us with the search and Flexibilities and that's so in the future I don't think that we need to worry about this issue because we do now have a long term strategic partners that are in place and the second in terms of Oh.
Xiaopeng He: And thirdly would be the cost of the vehicle. And fourthly would be how international that you can expand into for your product and to obtain more revenue and profit. In China, obviously, we can see that, Autonomous driving is something that everybody loves, 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 we can see that, for instance, in terms of the application in all areas, and all-round application, and the cost-reducting, as well as more marketing work that could be carried out, 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 since the first quarter of last year, we have also worked hard in bringing down the cost, as well as working more on our marketing, and the same as Huawei, and what we want to do is that we want to become an excellent company, but then coming back to autonomous driving, 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. Thank you. Thank you very much. Xie Xie.
Speaker Change #158: From a word of mouth products and we now have standardized a module and generally speaking and we have about 2122 partners will provide us with these modules that can be used in quite a broad spectrum of different models of cars and that this will improve the efficiency.
Speaker Change #158: D and bring down the cost as well as ensure the quality and they are very flexible our partners to work with the end of third each in terms of like supply chain management team. We have also done work to adjust our existing supply chain management, you're telling me and in terms of the organizational structure and go away.
Speaker Change #158: We now have a new system in place and so internally our company have the determination that we are ready and before all of these products to be launched and go for the first two or three months and we want to make sure that we keep a very good scale of sales.
Speaker Change #159: Hello, guys. This happens although without assistance.
Your next question comes from Shinji yen with Citi See Securities. Please go ahead.
So little Hall.
Shinji Yen: Ladies I'm quite a ways out of them to you that you know and she lives that probably.
Shinji Yen: It all.
Shinji Yen: I know, it's you know glacier to definitely be auctions, whether you're going to get some color on haven't seen yet. So I'm glad you got that from bullish and told you that all of that I'm sure. So sure whether you saw a number of children and indoor.
Operator: Your next question comes from Tina Hou at Goldman Sachs. Please go ahead. , Thank you for your time. My first question is: will our sales network be shared with Xiaopeng's brand or not? So is the of the design slightly lower than that of the Xiaopeng brand? Thanks management for taking my question. So the first question is about our new brand, since in terms of the pricing segment, it's actually quite separate from the Xiaopeng brand. I was wondering whether our sales channel would share the current sales channel or have a separate sales channel considering the target customer segment?
Shinji Yen: And it turns out.
No I'm sure for you Okay. Yeah, I'll hold you to you and you should probably know you'd almost say yeah I mean.
Shinji Yen: Due to the sugar and again the handle on these yeah. They hold them all G. O. Finding jobs are on last year, you mentioned that 2021 will be a critical year for full autonomous driving in China, where we will probably witnessed 30% of car in China will adopt for their autonomous driving I was wondering what he saw our Lady.
Speaker Change #161: And could you possibly share the theory behind your estimation. Thank you.
Speaker Change #161: Okay.
Speaker Change #162: Oh boy.
Speaker Change #163: You don't want to you want to answer.
Speaker Change #164: I'll touch on that shortly a teacher he'd been the surgeon.
Speaker Change #164: Sure.
Speaker Change #164: Good Oh did do you go.
Speaker Change #164: Well she is saying.
Speaker Change #164: Well Nate Schindler.
Speaker Change #164: And she bits.
Speaker Change #164: Putting that in truth.
Speaker Change #164: No you shouldn't you shouldn't need to.
Operator: Differentiated, And then the second, also related, is that considering we are at a lower price range for the new brand, wondering whether the designed gross margin level would also be lower than the Xpeng brand? [inaudible] We hope to have hundreds of independent stores in this new brand next year and the year after that. , James Thank you very much for your question with respect to the new brand and for the new brand, we will be launching it into our existing stores, and we will have independent exhibition halls for the new brand, and in the future, we are also looking at building more dealerships and more independent stores dedicated to these new brands, and we hope that there will be hundreds of these new independent stores for the new brands dedicated to them. And with respect to As Brian and Xiaopeng mentioned, Mona will be focusing on the A-class segment. Obviously, you know, we wouldn't imagine that an A-segment product would make the highest profit in our portfolio.
Speaker Change #164: There's no question that you got from.
Speaker Change #164: Single women.
Speaker Change #164: Treating pepsi and finding them like that junior overdue.
Speaker Change #164: Sure.
Speaker Change #164: It'll be just send a few places.
Speaker Change #164:
Speaker Change #164: And with that I'll turn to the petulant Nissan.
Speaker Change #164: I'll, let you do that Saddam wishing him the new phones.
Speaker Change #164: Tony.
Speaker Change #164: Utility.
Tony: Thank you.
Speaker Change #164: Yeah.
Thank you very much for your question and yes, indeed, it for this year and I do believe that we would be able to complete the task and little bit of ahead of time ahead of schedule I said, what I have mentioned in the last year and first of all in terms of the large.
Speaker Change #164: Oh and are being adopted in autos that system and through our testing we had already been able to discover that.
Speaker Change #164: The large bottle could you maybe help us to help with the speeding up of on the realization of the general generic intelligent they end up on smart autonomous driving so it is definitely an advantage and we have already done the testing and it has already approved it does.
Speaker Change #164: Hum.
Speaker Change #166: Personally I think timber.
Speaker Change #167: Tenda the shutdowns in Jay Cohen, Bordeaux, Jake let's take all Susan So, yes, I would tell you, though that someone can you kind of do you go to this I shouldn't that that's just.
Speaker Change #167: Shoveling Depo toiletries Sean.
Jiaming Wu: But overall, our expectation is Mona will achieve a healthy, positive margin for this brand overall. And as Brian mentioned, the Mona that will be launched at the Beijing Auto Show will just be the first model. There will be additional models that come through the platform. The other thing that, over the long term, we might be thinking about is, you know, a different commercialization strategy in terms of our software.
Speaker Change #168: Just to jump in.
Speaker Change #168: Okay.
Speaker Change #168: Okay.
Speaker Change #168: That's a fabulous you can go to choice.
Speaker Change #169: Sorry, you couldn't die.
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Speaker Change #169: Okay. That's helpful.
Speaker Change #169: That's about to go out to them.
Speaker Change #169: Yeah.
Speaker Change #169: Sure.
Speaker Change #169: Oh sure.
Speaker Change #169: How's your corridor because the solution. So as you know we're not yesterday.
Speaker Change #169: So to be sure.
Jiaming Wu: And we'll give you more guidance and information in the next couple of quarters. And the other thing I want to mention is in terms of Mona, because it's on a large scale, the target customer base, and, you know, our partnership with DD, so they will help us to market the product. Eventually, we expect relatively lower sales and associated sales cost for Mona compared to, you know, the Xiaopeng brand overall. Okay, thank you for your answers.
Speaker Change #169: What kind of changes.
Speaker Change #170: Good question.
Speaker Change #171: Oh, I'm annoyed and bulk water fountains that.
Speaker Change #171: Coppola associated Huntington's.
Speaker Change #171: Yes.
Speaker Change #171: So you don't know where it all plays out.
Speaker Change #171: Secondly, and a we know that to in terms of.
Speaker Change #171: Hardware costs, and therefore export obviously, we would like to bring it down and we also would like to see that so providing support to our system just by a large scale and then not only just got too far out of the export beliefs not to and we'd like to see they'll constitute come down and we also see out there in the market that are out.
Operator: My second question is about the delivery report in February. I saw a message saying that X9 may be in China. (inaudible)??, So my second question is: What kind of bottlenecks are we facing and how do we plan to prevent these similar situations from happening? Very good questions.
The people, providing even cheaper solutions and what we have for.
Speaker Change #171: Discovered is that with the larger mud Oems it definitely would be able to provide more computing power and more C. P. U N. This would be able to help and to push for the faster and better achievement in our vehicles today and did you bring the success that foster to the market and.
Xiaopeng He: Thank you. First of all, our X9 supply chain challenge, our February... [inaudible] In the past, we have encountered a lot of problems in the supply chain. In fact, we have been thinking about this for a long time.
Speaker Change #171: Another point I would like to mention is that that's in certain restricted the scenario is at war in certain.
Speaker Change #171: Scenarios, whereby there are a lot of limitations and we can see that the large model has actually they actually helped you with the speeding up of also realizing a fully autonomous driving and that this is something that so we are focusing on it and do we have a lot of confidence in this.
Xiaopeng He: We will make several changes. Since last April, I have been in charge of the supply chain. I have started to increase the number of partners in the supply chain. Xie Xun, Unknown Executive, Tim Hsiao, Bin Wang, Paul Gong, Yuqian Ding, Alex Xie, Xinchi Yin, Jing Chang, Hongdi Gu, Pingyue Wu, [inaudible] I believe that, first, in the future, on many of our core projects, we will be able to. I think the second point Many modules have only one or two composite blocks.
Speaker Change #171: Okay.
Speaker Change #171: Yeah. So there's some people I know you can't give or take a walk out and people did you decide when they see it hasn't been way down to before you guys had Tyson foods. He thought he that's totally Joshua Horowitz couple of dishes.
Speaker Change #172: Since you Gotta Joshua Hayes.
Speaker Change #172: Goldcorp has it changed.
Speaker Change #172: We would caution people decide which of those should generate significantly tests and they could go go shelving poultry, though it would pull it out and you can go ahead.
Speaker Change #172: Yeah.
Speaker Change #173: Apologies then I have one last point or two I think and which is not yet in terms of the non HD map and are we in the beginning and one we looked at this and we thought to that so yes. It will speed up the process and in the linear process that hybrid it wasn't linear it.
Xiaopeng He: It ensures that our entire system is capable of using the same module on different vehicles, with higher quality, lower cost, and more flexible supply chain security. In the past, we have adjusted the quality management of the supply chain. We have started to work with the entire procurement team. [inaudible] Wu, Zhang Xiaopeng, Yuqian Ding, Xiaopeng He, Jing Chang, Hongdi Gu, Pingyue Wu, Xpeng He, Jing Chang, Hongdi Gu, Pingyue Wu, Xpeng He, Jing Chang, Hongdi Gu, Pingyue Wu, [inaudible] That is an excellent question, and thank you for putting this forward.
Speaker Change #173: It was actually extremely fast in terms of how it has ramped up and we do believe that Oh.
Speaker Change #173: Having this data and that was and you end up having witnessed said the non HD map and how it's looking in reality and we do think that this is something we'll help again with the large model and its adoption is helping further advancing the auto Saar in autonomous driving.
Xiaopeng He: So in terms of the supply chain issue that you had mentioned encountered by X9, at the end of February after Chinese New Year, this problem has already been resolved. And yes, indeed, in the past, we have also encountered similar issues. Internally, we have also been thinking about how to resolve this problem. And since taking over the supply chain myself personally last October, we have gone through a new management system, and we are now reducing the number of suppliers, and we mainly focus on these high-quality suppliers. Unknown Speaker...privately, private Chinese companies that are listed, and those are the ones who can also provide us with certain flexibilities.
Speaker Change #173: Yeah.
Speaker Change #174: I'll, let you hear me.
Speaker Change #175: Thank you that is all the time, we have for questions now I'd like to turn the call back over to the company for closing remarks.
Speaker Change #176: Thank you once again for joining US today. If you have further questions. Please feel free to contact <unk> Investor relations through the contact information provided on our website or the Pearson's findings communications.
Speaker Change #176: Yeah.
Speaker Change #177: This concludes today's conference call you May now disconnect. Your line. Thank you.
Speaker Change #177: Okay.
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Xiaopeng He: And so, in the future, I don't think that we need to worry about this issue because we do now have long-term strategic partners in place. And second, in terms of our products, we now have standardized modules, and, generally speaking, 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 efficiency and bring down the cost as well as ensure quality. And they are very flexible partners to work with.
Speaker Change #177: Okay.
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Speaker Change #177: Hum.
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Xiaopeng He: And thirdly, in terms of supply chain management team, we have also done work to adjust our existing supply chain management team and in terms of the organizational structure and we now have a new system in place and internally, our company have the determination that we are ready and for all of these products to be launched and for the first three months and we want to make sure that we will achieve a very good scale of sales. Thank you for your answer, Xiaopeng. Your next question comes from Xinchi Yin with CitySea Securities. Please go ahead. Hello, Mr. Xiaopeng. Hello, Mr. Wang.
Okay.
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Yes.
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Operator: I'd like to ask you a quick question about the price. In last year's G6 press conference, you mentioned that you think that 2027 will be a more mature year for the price. We will see that in 2027, the entire price will reach a penetration rate of 30% or more in China. So, after more than half a year, have you changed your judgment on the industry now? And are you willing to share with us some of the logic behind your judgment in this period of time?
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Speaker Change #177: [music].
Operator: Last year, you mentioned that 2027 will be a critical year for full autonomous driving in China, where we will probably witness 30% of cars in China adopt fully autonomous driving. I was wondering what your latest view on that is, and could you possibly share the theory behind your estimation? Thank you. Yes, I think it's going to be a little earlier than what I said last year.
Speaker Change #177: Yeah.
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Xiaopeng He: I think there are a few changes. First, the big model is in our new self-driving field. Basically, it is very difficult to solve some of the capabilities of internal communication intelligence to be improved more quickly.,, [inaudible] So this is the first one.
Speaker Change #177: Okay.
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Xiaopeng He: You can translate it first, thank you. Thank you very much for your question. And, indeed, for this year, and I do believe that we would be able to complete the task a little bit ahead of time ahead of schedule, as I have mentioned last year.
Speaker Change #177: Okay.
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Xiaopeng He: And first of all, in terms of the large model and being adopted in other systems, and through our testing, we have already been able to discover that the large model could really help with the speeding up and the realization of generic intelligence and smart autonomous driving. So, it is definitely an advantage, and we have already done the testing, and it has already approved of this. The second point is about hardware cost reduction and hardware scale support. We can see that Xiaopeng is constantly looking for smart driving solutions in the market, but there are cheaper smart driving solutions than Xiaopeng. However, the launch of large models, [inaudible] Secondly, and we know that in terms of hardware cost, and for Xpeng, obviously, we would like to bring that down, and we also would like to see that providing support to our systems on a large scale, and not just for others, you know, Xpeng believes that and would like to see the cost come down.
Speaker Change #177: [music].
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Xiaopeng He: And we also see out there in the market that there are other people providing even cheaper solutions, and what we have discovered is that with the large model, it would definitely be able to provide more computing power and more CPU, and this would be able to help and push for faster and better achievement in our vehicles and bring success faster to the market. And another point I would like to mention is that in certain restricted scenarios, or in certain scenarios where there are a lot of limitations, we can see that the large model has actually helped with the speeding up of realizing fully autonomous driving, and this is something that we are focusing on, and we have a lot of confidence in this.
Speaker Change #177: Okay.
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Speaker Change #177: [music].
Xiaopeng He: I'm sorry, but there is actually another solution behind it, which is a high-definition map. We started to think that when it was launched, it should be accelerated with the initial data. But later we found out that it was not linear; it was a vertical solution. [inaudible] And I have one last point to add, which is that, in terms of the non-HD map, and we, at the beginning when we looked at this, and we thought that, yes, if we speeded up the process in a linear process, however, it wasn't linear. It was actually extremely fast in terms of how it has ramped up, and we do believe that having this data in our hands and having witnessed the non-HD map, how it's working in reality, we do think that this is something that will help, again, with the large model and its adoption and further advancing the autos and autonomous driving.
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Operator: Thank you. Okay, thank you. Thank you. That is all the time we have for questions.
Speaker Change #177: Yeah.
Speaker Change #177: Hum.
Operator: Now I'd like to turn the call back over to the company for closing remarks. Thank you once again for joining us today. If you have further questions, please feel free to contact Xpeng's investor relations through the contact information provided on our website or Pearson Financial Communications. Xie Xun.
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Yeah.
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Operator: This concludes today's conference call. You may now disconnect your line. Thank you. [inaudible] Thank you for watching this video. If you like my video, please subscribe to my channel.
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