Q4 2024 XPeng Inc Earnings Call
Xinchi Yin, Jiaming Wu, Xinchi Yin, Jiaming Wu, Xinchi
Speaker Change: Hello, ladies and gentlemen. Thank you for standing by for the fourth quarter and fiscal year 2024, earning conference call for Xpeng Inc. At this time, all participants are kindly send on the mode. After management remarks, there will be a question and answer session.
Speaker Change: Today's conference call is being recorded. I will now turn the call over to your host, Mr. Alex Xie. Head of investor relations, capital markets of the company. Please go ahead, Alex.
I'm sorry, I'm sorry, I'm sorry, I'm sorry, I'm sorry
Speaker Change: Thank you. Hello everyone and welcome to Xpeng's fourth quarter of this group's year 2024 news conference call. Of financial and operating results were issued about news while service earlier today and available online. You can also view the earnings press release by visiting the IRA section of our website at IRA.Shopeng.com.
Speaker Change: Participants on today's call from our management will include co-founder, chairman and CEO Mr. Hsiao Peng, Vice Chairman and President Dr. Brian Gu, Vice President of Corporate Finance and WW Projects, Mr. Charles Zhang, Vice President of Finance and Accounting, Mr. James Wu, 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.
Speaker Change: As such, the company's results may be materially different from the views expressed today. Third information regarding these and other risks and certainties is included in the relevant public filings of the company as filed with the US Securities and Exchange Commission.
Speaker Change: The company does not assume any obligation to update any follow-up statements except as
Speaker Change: Please also note that Xpeng's earnings press release and this conference call included the disclosure of an outdated GAAP financial measures as well as an outdated non-GAAP financial measures.
Speaker Change: Xpeng's own express release contains a reconciliation of the audited Nung Gap Majors to the audited Gap Majors.
Speaker Change: I will now turn the call over to our co-founder, Chairman, CEO , Mr. He Xiaopeng, please go ahead.
Speaker Change: We have achieved past key goals, with a new high delivery volume of 91,507 units.
Speaker Change: Our car gross profit margin has improved for six consecutive quarters, and in the second half of the year, free cash flow exceeded 4 billion.
Speaker Change: I believe it has fully validated the transformation of XPeng in terms of scaling, systematization, and strategic execution capabilities. By 2025, we have consecutively become the champion of the new car-making forces for two months and have also become one of the most stable-performing car companies.
我相信 I believe
Speaker Change: Further improvement, so this year I will focus on further enhancing XPeng Motors' system capabilities, user product capabilities, comprehensive AI and vehicle technology capabilities, as well as commercialization and globalization capabilities across multiple dimensions.
[inaudible]
Hello everyone, I'm He Xiaopeng.
Speaker Change: In the fourth quarter of 2024, we achieved significant milestones, including a record 91,500 and 7 vehicle deliveries in a single quarter.
Speaker Change: Six consecutive quarters of improving vehicle margins, and over four billion RMB in free cash flow in the second half of the year. These results highlight our significant progress in scaling, organizational improvement, and strategic execution.
Speaker Change: As we move into 2025, Xpeng has topped monthly deliveries among China's emerging EV companies for two consecutive months, demonstrating our robust momentum.
Speaker Change: I believe that the key to achieving long-term goals lies in steady progress. This year, I'll dedicate myself to further enhancing X-Tang's organizational capacity, use the Centric Product Development, AIN Automotive Technology, commercialization, and globalization.
In the last quarterly report and AI Technology Day, I shared that the next decade in the automotive industry will be the era of AI.
Speaker Change: In 2025, AI large models will bring a disruptive experience to autonomous driving.
Speaker Change: And today, in the first three months of this year in China, we have seen breakthrough progress in AI technology, which further strengthens my belief in the correctness of XPeng's strategy and technical approach in the AI large model of the entire physical world.
We have trained a cloud-based Foundation model with tens of billions of parameters.
Speaker Change: We have used hundreds of millions of kilometers of real value data for operational training.
Speaker Change: Then on top of this, we will enhance the model's generalization ability and its capability to handle situational scenarios through reinforcement learning.
By deploying distillation, fat reduction, and quantization techniques in the car segment model, the overall model accuracy is improved by more than double.
Speaker Change: We've developed a cloud-based foundational model that boasts tens of billions of parameters, leveraging over 100 million kilometers of real-driving data for pre-training.
Speaker Change: This marks an unprecedented scale of model parameters and data volume in a field of autonomous driving in China.
Speaker Change: Sufeta, Enhanced the Models Generalization Capabilities, and its ability to manage long-tailed scenarios. We employ reinforcement learning techniques.
Speaker Change: We'd unimplement the model in vehicles applying distillation, pruning, and quantization techniques and have successfully boosted the model's accuracy by over 100%.
I'm sorry. I'm sorry.
Speaker Change: In January of this year, China's DeepSeek R1 achieved great success with its AI Great Ape model in the digital world.
Speaker Change: We see that large models are undergoing cross-industry integration, and children are exploring the boundaries of these technologies together with outstanding AI technology companies from different fields.
Speaker Change: This makes me very excited. I believe AI will drive significant changes in the automotive industry in the coming years, including accelerating the timeline for L3 and even L4 autonomous driving.
Speaker Change: At the same time, I also see that four-wheeled vehicles are integrating with the development of Jusheng Intelligence.
Speaker Change: Smart cars are likely the precursors to humanoid robots. In the future, smart cars will certainly also be embodied intelligent vehicles. Therefore, in this trial, my goal is to develop Xiaohong Motors into a global AI car company, becoming a smart technology brand loved by users worldwide.
I'm sorry. I'm sorry. I'm sorry. I'm sorry.
Speaker Change: In January 2025, DeepSeek R1 makes significant strides in large language models, abensing AI capabilities in the digital realm. Much of its technology roadmap resonates with ours.
Speaker Change: I'm thrilled to see that large models are integrating in theirs industries and Xpeng is exploring the frontier of technology together with leading AI tech companies from different fields.
Speaker Change: I truly believe AI will transform the automotive industry in a few years time, speeding up the development of L3 and L4 autonomous driving.
Speaker Change: Additionally, I see a growing trend of smart vehicles and embody AI evolving together, and smart vehicles may pave the way for humanoid robots. I'm confident that all future smart cars will be embodied AI vehicles.
Xpeng: My goal for this decade is to build Xpeng into an AI-empowered global automotive company and a smart technology brand cherished by users worldwide.
Xpeng: We are in the transition period from the era of electrification of automobiles to the era of AI intelligence.
Xpeng: I believe that leading AI companies need to have capabilities from cloud models to edge models.
Xpeng: From the entire vehicle EA and architecture, to chips, to the data closed-loop of the new generation of software and hardware full-stack resources, and it is necessary to add the self-closed-loop capability of data iteration.
Therefore, the mass production of XPeng's self-developed Turing chip is progressing very smoothly this year. We will apply it simultaneously to cars, flying cars, and energy metering, and it can also be used for rapid deployment in global all-scenario applications.
Speaker Change: Then the Turing chip, combined with the full utilization of software and hardware resources, will allow XPeng Motors to fully leverage the advantages of Scandal on the edge side.
Speaker Change: We believe that not only is our model architecture a generation ahead of the industry, but the effective parameter scale deployed to the vehicle end will be tens of times higher than the industry. This will significantly widen the standby gap between XPeng and its competitors in the next step.
Speaker Change: I believe that in the second half of this year, XPeng will be the first in China to implement L3-level intelligent driving software capabilities and experience.
Speaker Change: And subsequently, the increase in Level 3 will create a stronger demand and higher annual salary for users.
Drive AI cars truly towards iPhone 4
Speaker Change: By 2026, we will also mass-produce models that support L4 autonomous driving in low-speed scenarios.
I believe when autonomous driving
When the majority of families trust it, and when our parents can also use it with peace of mind and frequently, that will be the true success of intelligent driving.
You, You, You, You, You,
Speaker Change: I believe that a top AI company should possess cutting-edge, full-fax software and hardware capabilities, and be able to iterate close-loop data effectively across large cloud-based AI models, in vehicle models, vehicle, electronic architecture, or EEA, and system on chips or SOC.
Speaker Change: We expect to begin mass production of our self-developed touring chip, which by the way is progressing really well for vehicles, flying cars and human eye robots this year. This chip is also designed for swift deployment across global markets and diverse scenarios.
Speaker Change: The Turing Church, combined with our full-tech in-house developed software and hardware, will enable Xpeng to fully leverage the scaling law of our vehicles.
Speaker Change: I believe that in the second half of this year, Xpeng will be the first in China to offer a smart driving experience that boasts software capabilities and user experience equivalent to L3 autonomous driving.
Speaker Change: L3 Autonomy will generate strong user demand and exceptional user loyalty, marking an iPhone 4 moment for AI-defined cars. Additionally, in 2026, we plan to mass-produce vehicle models that will support L4 autonomous driving in low-speed scenarios.
Speaker Change: True success will be achieved when smart driving earns the trust of a broad range of family users, so even those from my parents' generation can use it competently and frequently.
Speaker Change: A very interesting piece of data is that starting this year, the penetration rate of high-level autonomous driving among new Tesla users in China will exceed 10% for the first time.
This means that the turning point for domestic demand will arrive, and the growth curve will rise non-linearly.
Speaker Change: Xpeng is preparing to rapidly expand the sales scale of AI cars and promote the global adoption of AI self-driving cars through its layout in technology, cost, and vehicle models.
Speaker Change: Without relying on LiDAR, we develop globally highly useful AI technology across multiple vehicle models using a single software suite. Next, we look forward to competing with the world's best AI autonomous driving companies in the Chinese and global markets, accelerating the survival of AI autonomous driving.
Speaker Change: From the P7 onwards, all new products from XPeng, including the newly launched 2015 models G6 and G9
It will be equipped with industry-leading pure visual AI nails and achieve holographic standard configuration.
No need to make a fool of oneself
Speaker Change: The upcoming Mola M03 Max model will also be the first to lower the program self-driving tires to the 150,000 level, allowing more young users to easily enjoy the fun brought by technology.
Speaker Change: I believe that by combining the most advanced AI foundation with an extremely unified platform and efficiency, XPeng Motors can achieve AI parity across the widest range of price points, allowing a broad range of users to afford and use it well.
Speaker Change: An interesting figure to share with you is that starting from 2025, the penetration rate of events urban smart driving among new car buyers in China will exceed 10% for the first time, marking a turning point in the demand for smart driving.
Speaker Change: This growth trend is expected to be non-linear, presenting a significant opportunity for us, where well-prepared in terms of technology, cost, and model line-up to rapidly ramp up the sales of AI vehicles and promote the global adoption of AI-powered smart driving.
Speaker Change: From a technology standpoint, Xpeng and Tesla are the only two companies worldwide that are capable of providing globally reliable AI smart driving experience without relying on high definition maps or a lighter and using a single software suite across the vehicle models.
Speaker Change: Going forward, we look forward to competing alongside the world's leading AI autonomous driving companies in both the Chinese and global markets jointly accelerating the penetration and adoption of AI-driven autonomous driving technologies.
Sharding from the...
Speaker Change: P7 Plus, all new XI models including the recently launched 2025 G6 and G9 will come with industry leading pure vision-based AI smart driving as a standard feature across all trims, no extra costs
Speaker Change: Our upcoming Mona M03 Max, set to launch in May, will lower the entry barrier for urban AI smart driving to the 150,000RMB range for the first time.
Speaker Change: Making advanced vehicle technology more accessible to younger consumers by integrating cutting-edge AI technology with a well-developed and highly efficient platform-based approach.
Speaker Change: Democritizing AI Technology across the widest prize range, making it affordable and reliable for the broad, for a broad base of ordinary users.
As AI intelligence accelerates, in the next three years, XPeng will continue to refine, differentiate, and globalize based on a clearly defined product roadmap. Through this three-year product cycle, XPeng aims to achieve rapid sales growth, lead in scale, and achieve sustainable profitability.
Speaker Change: In 2025, we will have major new models and facelifts launched every quarter, including new models that integrate the latest generation of XPeng's AI technology.
Speaker Change: On March 13th, the 2015 models of the G6 and G9 were launched, and the fully upgraded products have already been well-received by users.
Orders continue to rise beyond our original plan.
Speaker Change: At the same time, we are very pleased that the launch of the new model has led to a surge in demand for our entire range of models, driven by the explosive popularity of the static chain.
Speaker Change: We plan to start the delivery of the brand new Rapids on March 21st and are working with our supply chain to fully increase production capacity so that more users can receive their orders as soon as possible.
Then next, including XPeng's Mola M03
77, X9, etc.
Speaker Change: I believe that through a strong product lineup formed by a series of combinations, including M03, G6, PG Plus, G7, G9, X9, etc., we will fully cover young users.
Speaker Change: The diverse needs of household users for quality upgrades allow us to significantly increase our market share at multiple levels.
Hello, everyone. Welcome. Welcome. Welcome.
Speaker Change: SDAI Bloom accelerates over the next two years, will focus on refining, differentiating, and globalizing our well-defined product portfolio. This will enable us to achieve rapid sales growth and scale leadership through our three-year product cycle, while also ensuring sustainable profitability.
Speaker Change: Starting in 2025, we plan to launch new models or updated versions every quarter, all equipped with X-Sync's latest next-gen AI technologies.
Speaker Change: On March 13th, we launched a new 2025 G6 and G9. Their comprehensive upgrades and top tier product capabilities have been widely recognized and appreciated by our users, orders continue to pile up and have exceeded our expectations.
Speaker Change: Additionally, the search in store visits following the new model launches has driven an increase in demand for our entire lineup.
Speaker Change: We plan to begin deliveries of the new G6 on March 21st, and we're currently working closely with our supply chain to ramp up production capacity, ensuring that more customers can receive their vehicles as soon as possible.
Speaker Change: Next, our Mona M03 G7 and X9 will introduce new max strings and launch new models for our facelift.
Speaker Change: I'm confident that our strong product offerings represented by the M03, G6, G7, P7 Plus, G9 and X9 will
Speaker Change: Cater to the diverse needs of young consumers, families, and those seeking premium upgrades, ultimately helping us increase our market share across diverse market segments.
I'm sorry. I'm sorry. I'm sorry.
Speaker Change: With the staggered ramp-up of new models and facelift models, I believe that XPeng's sales will smoothly transition through the product replacement period in the second quarter, continue to grow, and reach new heights.
Speaker Change: In the second half of this year, we also plan to deliver several new products, including charging.
Speaker Change: And with Kunpeng's super electric products, the vast majority of our models will support dual occupancy. Through super electric products, we will significantly expand our accessible market size.
Speaker Change: By the end of 2026, XPeng will span the price range of 100,000 to 500,000, with a more complete product layout across all mainstream segments from compact to large models.
Speaker Change: I also have good news to share with everyone. Our advanced noise center in Shanghai has already been put into use and is undergoing significant expansion. The combination of Xiaopeng's left-hand art and right-hand technology is unleashing even greater power. I believe in Xiaopeng's new car models.
Speaker Change: Including aspects such as interior and exterior design and a sense of refinement, it will bring even greater surprises to users in the future.
Speaker Change: The ultimate platformization integrates multiple underlying technologies such as AI autonomous driving, AI cockpit, electrical appliances, architecture, and AI power.
Speaker Change: Platformization, thereby achieving higher efficiency in R&D, iteration, quality, and stronger economies of scale.
Speaker Change: With the deliveries of our new models and updated versions ramping up, I expect ourselves to steadily navigate a transitional period of product-generational change, continue to grow and reach new highs in the second quarter.
Electrical Vehicles, or BEVs, and Quantum Super Electrical Vehicles.
Speaker Change: Most of our models will feature dual energy or power, significantly broadening our more addressable market through super-electric models.
Speaker Change: By the end of 2026, we'll have a comprehensive line up across the 100,000 to 500,000 RMB prize range covering all mainstream segments from compact to large models.
Speaker Change: We are also thrilled to report that our design center in Xiaohai is now operational and the team is growing rapidly. The integration of art and technology is gradually unleashing its full potential. I believe our new models will impress users with their aesthetics and refined perception.
Speaker Change: Additionally, the development of our new models will adhere to several platform-based approach, sharing a unified set of underlying technologies, including AI-driven smart driving, AI-coctage, EA, and AI power power train.
Speaker Change: This will enable efficient R&D eventsmen and strong economies of scale.
Speaker Change: Our growth in overseas markets is equally strong, and we see great potential in electrification and intelligence. In 2024, Xiaohong Auto's overseas sales exceeded 20,000 units.
Speaker Change: Achieve more than double the sales growth and establish over 300 sales and service outlets globally compared to 2024.
Diaofan, Yibei
Speaker Change: We not only want to sell cars globally, but more importantly, to be a representative of high technology and high quality.
Speaker Change: In 2025, XPeng will establish a new R&D center overseas, where we will conduct research and testing of the Turing AI framework. We hope that, under the conditions permitted by local regulations, we can bring XPeng's advanced AI framework capabilities to more countries around the world in 2026 and beyond.
Speaker Change: Our growth momentum in overseas markets is also strong, and there is still significant potential for both electrification and smart technologies. In 2024, Xpeng's overseas vehicle sales exceeded 20,000 units, ranking first in export volume among China's emerging EV brands, and also leading in the export of China's meat to
Speaker Change: I want to express my heartfelt gratitude to all X-Pain owners around the world for their unwavering support and passion for our brand.
Speaker Change: Looking ahead to 2025, our overseas business milestones include doubling our cells and establishing over 300 cells and service source worldwide, double the number we had at the end of 2024.
Speaker Change: In 2025, we'll set up new overseas R&D Center and commence our overseas research and testing for our Turing AI Power Smart Driving.
Speaker Change: Gong is to bring Xpeng's AI smart driving capabilities to more countries and users around the world in 2026 and beyond, also ensuring compliance with local regulations.
[inaudible]
Speaker Change: Therefore, by launching more competitively leading products and global payments, I believe Xiaohongji will achieve more than double the total sales growth in 2025 compared to 2024.
Speaker Change: Meanwhile, through the continuous improvement of overall operational capabilities from the past, present, and future, cost reduction in technology, and greater economies of scale, we expect the automotive gross margin to continue improving this year.
Speaker Change: We are very confident in believing that as we persist in the major path of AI development, we will steadily move towards the proportion of Xiaopeng in the fourth quarter of this year.
I'm sorry. I'm sorry. I'm sorry. I'm sorry. I'm sorry.
Speaker Change: With the launch of more competitive products and ongoing global expansion, I'm confident that Xpeng's total sales in 2025 were more than double that of 2024.
Speaker Change: This will significantly increase our market share in both the Chinese and global smart EV sectors, and establish us as a leading AI out automotive brand widely recognized by consumers.
[inaudible]
Speaker Change: I look forward to a future where driverless cars are implemented in cities, flying cars are used for intercity transportation, and factories and communities begin to enter an era of capable robots, building a prototype ecosystem centered around AI.
Xiaopeng Xie: Therefore, in my plan, XPeng Motors has three normal curves: the first is AI plus automobiles, the second is moving from China to the global stage, and the third is a deeper integration of embodied humanoid robots and the automotive industry.
Xiaopeng Xie: I am confident in leading our team to strive to achieve the crossing of these three normal curves and to bring the best AI intelligent technology products to global consumers, creating greater value.
[inaudible]
Xiaopeng Xie: In the long run, I believe AI will evolve from being just and assistant to becoming a crucial part of our social infrastructure.
Xiaopeng Xie: Wolven into the fabric of our daily lives. When I think about the future of an AI-driven mobility ecosystem, I envision driverless vehicles cruising through cities, flying cars for inner-city travel, and human-knowledge robots integrated into our factories and communities.
Xiaopeng Xie: Regarding my strategic plan for Xpeng, I have identified three primary growth trajectories.
Xiaopeng Xie: First, we're working on AI power vehicles, equipping our cars with cutting-edge AI technology.
Xiaopeng Xie: Second, we're focusing on global market expansion, actively broadening our presence beyond China and into international markets.
Xiaopeng Xie: Lastly, we're dedicated to the development of humanoid robot that can seamlessly integrate with the automotive industry.
Xiaopeng Xie: Our amazing team is committed to excelling in each of these areas, putting in the hard work to deliver the best AI-driven products to consumers around the world, and to provide greater value overall.
[inaudible]
最后在2025年的第一季度
We expect the total delivery to be approximately ninety-one thousand to ninety-three thousand units.
year-on-year increase
317% to 326%
And the revenue is expected to be approximately 15 to 15.7 billion RMB
Xiaopeng Xie: We anticipate that all total deliveries for the first quarter of 2025 will be between 91,000 and 93,000 units reflecting a year-over-year increase of 317% to 326.2%.
Xiaopeng Xie: At the same time, we forecast our total revenue to fall between 15 billion and 15.7 billion R and B, which represent a year-over-year growth of 129% to 139%
Thank you everyone, now our VP of Finance, James, will present our financial status for the fourth quarter of 2024.
I'm sorry. I'm sorry. I'm sorry. I'm sorry. I'm sorry.
Xiaopeng Xie: Thank you, Xiaopeng. Now let me provide a brief overview of our financial results for the force quarter of 2024.
Xiaopeng Xie: Our reference R&B only in my discussion today, unless otherwise stated [inaudible]
Speaker Change: Our total revenues were 16.11 billion for the fourth quarter of 2024.
Speaker Change: An increase of 23.4% year over year, and an increase of 59.4% quarter over quarter.
Speaker Change: The year over year and quarter of a quarter increases were mainly attributable to our higher
Speaker Change: The over-year increase was mainly attributable to the increased revenue from technical R&D services related to the Volkswagen Group.
Speaker Change: The quota of a quota increase was mainly attributable to the increased revenues of maintenance services and auto financing services.
I don't know. I don't know. I don't know.
Speaker Change: Ross Margin was 14.4% for the fourth quarter of 2024, compared with 6.2% for the same period of 2023 and 15.3% for the third quarter of 2024.
Speaker Change: The vehicle margin was 10% for the fourth quarter of 2024, compared with 4.1% for the same period of 2023 and 8.6% for the third quarter of 2024.
Speaker Change: The year of a year and a quarter of a quarter increases, were mainly actually bootable to the cost reduction.
Speaker Change: R&D expenses were $2.01 billion for the fourth quarter of 2024, representing an increase of 53.4% year over year, and an increase of 22.9% quarter over quarter.
Speaker Change: The year-to-year and quarter of a quarter increases were mainly due to higher expenses related to the development of new vehicle models as the company expanded its product portfolio to support future growth.
I'm sorry. I'm sorry. I'm sorry. I'm sorry.
Speaker Change: S-GNA expenses were 2.28 billion for the fourth quarter of 2024.
Speaker Change: representing an increase of 17.5% year over year and an increase of 39.3% quarter of a quarter.
Speaker Change: The year of a year and quarter of a quarter increases were mainly attributable to the higher commissions paid to the franchise stores driven by our higher sales volume.
Speaker Change: As a result of the fall going, loss from operations was 1.56 billion for the fourth quarter of 2024 compared with 2.05 billion year-over-year and 1.85 billion quarter-over-quarter [inaudible]
Speaker Change: Net loss was 1.33 billion for the fourth quarter of 2024, compared with 1.35 billion year-over-year and 1.81 billion quarter of a quarter.
Speaker Change: As of December 31st, 2024, our company had cash and cash equivalents, restricted cash, short-term investments and time deposits in total of 42 billion.
Speaker Change: This concludes our prepared remarks. We'll now open the call to questions.
Operator, please go ahead.
[inaudible]
Speaker Change: If you wish to ask a question, please press star one on your telephone and wait for your name to be announced.
Speaker Change: If you wish to cancel your request, please press star 2.
Speaker Change: 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 with your next question.
Your first question comes from Tim Hsiao with Morgan Stanley .
Speaker Change: Hello management, I am Tim from Bobesgari, thank you for accepting my question.
Speaker Change: I have two questions. The first question is about governance.
Speaker Change: Because just now, Mr. Xiaopeng also mentioned that since the opening, we have seen major domestic car companies actively promoting autonomous driving for all. How does the management view the democratization of autonomous driving?
Speaker Change: As for the synchronization of our own algorithm software, whether there will ultimately be risks in commodities, and with the subsequent launch of L3 level private driving, can it really widen the gap in technology and consumer perception? This is my first question.
Hong, my first question is about the autonomous riding.
Thank you.
So, Hong with the 80 accounts for the autopilot functions.
Speaker Change: We call on commodity and after-reson AI democratization in China and have upcoming upgrade to level three at time trial and system to really help to widen the gaps.
between the leaders and the lagers.
Speaker Change: Who are you with? We man a Thai race over time. That's my first question. Thank you
Speaker Change: Yes, thank you. I believe that in recent months we have seen almost all Chinese car companies announcing their entry into cost control. I think this is a very...
Point-to-point, parking space to parking space
那么这是一个 So this is a
Go to the big cycle, so the little dragon is in
We launched it around this time last year.
Speaker Change: We believe that this series will enable future AI cars to develop more unique capabilities, including something similar to AI Aging.
Speaker Change: So how do we view L3 as a turning point? I believe L3 becomes a turning point due to improvements in technology, including hardware and software capabilities, as well as model capabilities. I believe this will enhance the capabilities by ten to dozens of times compared to the current advanced L2. This is something that can be seen very clearly.
Speaker Change: The second thing I believe I saw, as just mentioned, is that when a high-level automatic value forms a 10% inflection point in the entire market,
Speaker Change: You will see that all users will follow the trend of considering autonomous driving as a top ten, top five, even top three, or top two condition when choosing a car, so XPeng Motors will be with other car companies.
I'm sorry, I spoke too long. Please help me translate this first, thank you.
Speaker Change: A.I. agents, and that will also bring forth a lot of unique capabilities that people have long for or have never envisioned to be able to have.
Speaker Change: And as regard to the second part of your question, which is, how do we view L3 capability as a turning point? First of all, I believe that first of all, it represents an advancement in technology, not only in the software, but also in the hardware and the integration of both as well, and also the model capability, large model capability, I believe will be way higher than even the events level of L2 right now, maybe by 10 times or even more, and that is definitely very clear and foreseeable.
Wu, Xinchi
Speaker Change: and also another point that I want to mention is that when we look at, as I mentioned in my preparing marks, that when the whole adoption rate or penetration rate of high level autonomous driving in the market reaching 10%, it's going to generate a lot of user following up and understanding of advanced capability of smart driving. And when it comes to making the purchase decision, people is going to more and more power ties, having this advanced level of a
Speaker Change: He, Desk Capability, I'm going to pause in here and I'll continue to answer your question.
[inaudible]
Speaker Change: I think in the next stage, XPeng will widen the gap from the industry in multiple aspects.
In all domains
It must be able to form an end-to-end closed loop.
Speaker Change: This capability allowed XPeng to invest earlier and more resources, capabilities, and time, with a larger amount of data in the attraction cycle.
Speaker Change: I think the third major value is that, because Xiaopeng has implemented all capabilities on a single platform in AI enterprises, our ability to rapidly iterate data in the future is far superior to our industry.
Speaker Change: The efficiency, effectiveness, cost, and impact of deployment. In this regard, when entering globalization, we will also see the overall first-mover advantage and brand value. I believe I haven't covered everything here, but I believe.
Speaker Change: In high-level in-house factories, leading companies will have an increasingly large gap with lagging companies. Thank you!
I'm sorry, I'm sorry, I'm sorry, I'm sorry, I'm sorry
Speaker Change: And I think in the foreseeable future you're going to see that Xpeng is going to create bigger and bigger gaps between ourselves and our competitors.
From Multiple Perspectives [inaudible]
Speaker Change: First one, we have the capability to do full stack self-development and we are able to leverage all resources across different domain and different scenarios.
Speaker Change: Wei, I mean, Wei ahead of our competitors, we're able to create a very significant, huge, I mean, first mover advantage, another big advantage that we're going to have is our capability of doing smart driving combined with our smart cockpit, our platform, our power train, and also we're able to integrate modules vertically, but horizontally as well, which can also create a lot of value because it requires a lot of cost domain, a self-development capability [inaudible]
Speaker Change: and it comes to the deployment of our capability to efficiency and the implementation and execution we're going to have very significant first mover advantage in terms of globalization as well. But the list goes on and on and on. I mean, in summary, I just want to highlight that when it comes to advanced aid ask capability, we are going to create a huge gap between ourselves and our competitors. Thank you.
I'm sorry. I'm sorry. I'm sorry. I'm sorry. I'm sorry.
Speaker Change: Thank you, Xiao Peng, for the detailed sharing. The second question is about the application in the area of flying cars.
Speaker Change: Due to XPeng Motors' investment in AI applications, aside from the framework, I would also like to understand from Chief Engineer He about the application of flying cars. For example, XPeng's CEO mentioned humanoid robots and EVOTO flying cars being able to be implemented and contribute to revenue. Additionally, is there any synergy between the flying car project and the terminal applications on the car end?
Speaker Change: Will there be a noticeable increase in investment in manufacturing and R&D in the coming quarters, particularly for humanoid robots and other areas?
So my second question is about the meldico-applications.
Speaker Change: How are we going to see any medical synergy across experts' investments in AI and applications
Speaker Change: And when are we going to see the value of contribution from the vehicle products and then whether there is no vehicle projects with the lead to a more manifold increase in R&D and how they are creating spaces in the foreign quarters. That's my second question, thank you.
Speaker Change: Host, as you can see, Xiaopeng's Tang Jingyuan is a pioneer in the exploration of the future. More profoundly, we hope to integrate AI,
Speaker Change: In the past decade, in cars, in flying cars, and from the perspective of our research and development at the grassroots level over the past five years, actually in the next ten to twenty years,
New types of transportation include cars, flying cars, and energy integration.
Speaker Change: In this field, if you plan ahead, there are many points where consistency can be achieved. For example, the physical world model based on Xiaopeng's L3 autonomous driving that we are working on, along with our entire physical world action model at the energy infrastructure level, is actually beyond just the data domain.
It's different, in many people's fields it's basically the same.
Speaker Change: So you can see, in the whole field, no matter from the end to the end
Speaker Change: The development of this AI is highly coordinated within our entire global sales network and even in the usage scenarios of our production network. I believe the capability for commercialization is there.
Speaker Change: In 2026, everyone will see certain results. I believe I have mentioned recently that in 2026, our flying cars, and even our private grassroots, will begin mass production to a certain extent. I believe it will also be one of the first companies in China and even globally to start mass production.
Thank you, indeed, as we mentioned.
I'm sorry, I'm sorry, I'm sorry, I'm sorry, I'm sorry
Speaker Change: Our long-term vision for the company is to become an explorer of future mobility. And on a deeper level, we are actually exploring the future ecosystem of mobility, which means that we want to empower new energy together with AI.
You know, so that we can create a new way of travel.
Speaker Change: And that would include not only vehicles, but also flying vehicles or humanoid robots. And for the past 10 years, we have been invested in not only smart driving vehicles, but also humanoid robot. And in the coming decade or two, we believe that a true intelligent or AI-powered vehicle manufacturer would definitely be a producer or manufacturer of embodied intelligent new mobility or vehicle.
Speaker Change: Manufacturer, and that includes vehicle flying cars, or humanoid robots. And in this area
Xie Jiaming, Jiaming Wu, Xiaopeng He
Hello, everyone. Welcome back to our channel.
Thank you very much.
Speaker Change: Your next question comes from Ning Sun Lee with Bank of America.
Ning Sunli: Because currently we are seeing more and more car companies investing in autonomous driving, and more and more are gradually starting to use end-to-end large models, including world models or VLM, etc. In the current environment, because of AI or including DeepSeek, the actions of prisons have become very, very small. There are many, many media outlets, and perhaps the world's people, possibly Economics Voyager or tomorrow or the world's on-off lights, have some things you often see, like fish tuna or super tuna, or now the juvenile horseshoe crab, 3000 IQ placed in their important theme documents.
Ning Sunli: Will this kind of thing accelerate the training process, and is it possible that the leading companies in autonomous driving and the followers, after having these tools, can slightly close the gap with the leading technology? Also, I would like to ask about our Turing chip. Besides cost reduction, what is its greatest significance in terms of helping our current autonomous driving capabilities?
Ning Sunli: So, my first question is related to autonomous driving especially right now we are seeing more and more auto companies, they are using N2N model or the world model to train the autonomous driving system, so is it possible that
Ning Sunli: They are leading AD companies and also the companies we grew up behind.
Ning Sunli: is it possible that the technology get to be narrow? And also for Xpeng, because you will start to use your touring chip this year, so besides the cost control, how can this chip to help you to advance your AI AD capability?
Thank you.
Ning Sunli: Yes, thank you. Your first question is somewhat similar to the previous first question. I will try to combine these two questions to explain.
[inaudible]
Ning Sunli: From a different perspective, after the emergence of high-level autonomous driving, I believe that the gap between automakers, especially those with full in-house development capabilities, and previous automakers with T1 or initial in-house development capabilities will widen. This is particularly true regarding the data loop.
Jiaming Wu, Xiaopeng He
It is the ability to profit plus the use of R&D costs.
The ability to communicate and use these abilities will lead to new high-level autonomous driving manufacturers having the ability to heal, rather than just breaking through at a single point. It is similar to DeepSeek in the digital world, which can achieve this through open source.
Ning Sunli: There is a huge difference. So, regarding the graphics chip question you just asked, yes, it's a very good question. I can only say one thing, which is that besides being better in terms of cost, when your model, your chip, and your chip development toolset...
Ning Sunli: It's all done within your system of formulas, and you'll find that for energy consumption, for performance,
The functionality has greatly improved, and this was previously approved.
Collaborative chips can also tap into many capabilities, but they haven't been explored to such a large extent. This is why, in the past, many smartphone manufacturers have supported chips as an important logic.
Ning Sunli: It can achieve a significant lead, so I believe that in future strong AI companies, chip capability, massive R&D capability, and massive data capability are all fundamental elements among them. Thank you.
I'm sorry. I'm sorry. I'm sorry. I'm sorry.
Speaker Change: Thank you. Actually, the first part of your question sounded similar to some of the previous questions. I'm trying to, I'm going to respond to both of your questions at once.
Speaker Change: First of all, after the emergence of a high level autonomous driving or smart driving, I believe that for any players in the automotive industry, you will have to have the so-called comprehensive full-sex self-development capability. What I mean is that you not only need to have the software capability, but also hardware and also your supply and chain capability to allow you to work with the top tier suppliers and also have more and more resources, and having that comprehensive capability is going
Speaker Change: and the capability to actually deploy it across multiple scenarios in different markets. That is why we are very, very confident in our competitive leadership, because newcomers or existing incumbents are not easily surpassing us just because they may do better in one aspect or two, which really is very different than the digital competitive landscape, you know, as you mentioned in your question, such as Deepseek you know, you know, you know, you know, you know,
Speaker Change: and other AI software companies. The second part of your question, this is a very interesting question, how the self-developed touring chip really empower our development for the future. Let me just give you an example. You know, the reason why so many companies, OEMs or smartphone manufacturers try to develop their own chips, is because you realize not only can you gain cost benefits from developing your own chip, but also it allows you to customize.
Speaker Change: He is a lot of your products and also have a lot of potential of development as well. And the fact that we are able to self-develop our relationship, allow us to maintain our leadership. And because we do everything within our own system in the company, you realize that it also allows you to achieve energy benefits and efficiency and improve your performance of your products significantly. And you also can work with other players and other suppliers more effectively as well. It allows us to...
Speaker Change: You have the unparalleled self-development capability to also leverage data and have very effective and fast iteration. That is the reason why we really invest heavily in our self-developed relationship. Thank you.
Speaker Change: The second question is about robots. I remember that previously, XPeng had already released a robotic dog. At that time, the XPeng CEO mentioned that creating a high-performance robotic dog is actually more challenging than making a high-performance new energy vehicle. I would like to know, with the current progress of our humanoid robots, is it expected that by 2026, in addition to mass production, they will also be commercialized?
Speaker Change: In terms of our development progress, in which areas does the 'little princess' currently feel more satisfied, and which areas are still bottlenecks? Is it that the cost is not low enough, or is it motion control, or other areas? So we have more than a year to address these shortcomings. Let me also translate my question: So my second question is related to humanoid robot product development.
Speaker Change: You have planned to make production of your human-owned robot in 2026, so you will also start to sell the product.
Speaker Change: Xie, and the current based on your development progress, which area you feel you are satisfied and what is the area that you think you still need to contribute to make more progress before you officially launch it. Thank you.
Thanks for watching!
Speaker Change: You asked me a challenging question about the next generation of products.
Speaker Change: First of all, our mass production at the grassroots level in 2020 is definitely planned for commercial mass production. This grassroots level is actually related to car manufacturing.
Speaker Change: Very different, and I think it's more difficult than creating AI cars.
Right, so....
Speaker Change: We see that today's robots, which are very strong in lower body movement capabilities, are actually still based on LR capabilities.
I'm sorry. I'm sorry. I'm sorry. I'm sorry. I'm sorry.
Speaker Change: The higher difficulty with cars lies in their comprehensive integration capabilities. For example, an AI car can still be driven even if it lacks AI capabilities, but a robot without AI capabilities cannot be used.
Speaker Change: For robots, the ability to go offline requires a combination of capabilities such as safety, reliability, stability, and natural language interaction in a wide range of scenarios, which imposes very complex requirements on robots.
Omnipotent type, even with skin, with
I'm sorry. I'm sorry. I'm sorry. I'm sorry.
Shou
Speaker Change: This time I hope to be able to share with everyone a little earlier in the future. Thank you.
Speaker Change: Thank you for your question. This is definitely not an easy question to answer because it involves our next generation of technology and products. Now when we mentioned the mass production of humanoid robots by 2026, we're definitely talking about the commercial market and large production.
Speaker Change: When it comes to the manufacturing of humanoid robots, it's actually more challenging than even producing AI vehicles. The reason for that is because it really requires fully integrated capabilities across the board. Because a true humanoid robot requires not only the hardware, but also real data from our human activities and also simulated data. And it's very hard to achieve this comprehensive level of full integration.
at
Speaker Change: Basically, humanoid or semi-human kind of brain intelligent capability that we incorporated in our humanoid robots, but that is very challenging and I hope that in maybe the near future I can share more update with you when we have more information.
Thank you.
Thank you, Xiaopeng. That's all my questions.
So our next question comes from Din Wang with Deutsche Bank.
Bin Wang: Thank you, I have two questions. The first is that I would like the company to provide guidance on the gross profit for the first quarter.
Bin Wang: Wu Fangyi Xia, my two questions all about the financial. The first one can provide a first quarter gross margin guidance.
Bin Wang: And the second question is about your financial education improvement in the long-term investment, otherwise the fair value games which may be needed to the DD acquisition. Thank you.
Xiaopeng, Xiaopeng
[inaudible]
Bin Wang: Hey, when this is James, I'll answer a question. Yes, so what you've seen first of all in Q4 is our vehicle model has improved versus prior quarter, and this is
Bin Wang: Primarily due to our cost reduction efforts as well as higher scale, in forecasting on our
Bin Wang: to improve our vehicle margin, to be stand solidly on the double digit vehicle margin.
Bin Wang: continue to come across front and as we continue to improve scale, we would benefit from manufacturing cost perspective as well.
Bin Wang: With regard to your second question on the DD-related transaction, yes, there was an adjustment that was made. If you recall, as we close the transaction with CD-D,
Bin Wang: that we are going to focus on the 2C customer rather than the 2B customer and therefore based on our assessment, the first milestone is unlikely to be met and therefore we have released that liability which is what you've seen in our financials.
Thank you.
Hello, everyone. Welcome. Welcome. Welcome.
and now it's non-thing investment.
[inaudible]
You know, not significant, I would say.
Bin Wang: That would come from someone come from, for example, which investment we had as an equity holder, and then there are a variety of other investments as well. But overall, the change in the force quarter is not as meaningful as what you've seen on the TT transaction release.
Thank you, very good, thanks.
Your next question comes from Tingyue Wu with Sytech Securities.
From the perspective of the current international environment, it may be necessary to go abroad or to engage in some form of production or capacity cooperation overseas. Therefore, I would like to ask about our progress in terms of overseas capacity and more detailed plans for going abroad this year. Thank you for the opportunity to...
Speaker Change: As we can see, the oversee market is one of the pillars for our long-term development.
Speaker Change: and are we considering to build a factory or some kind of cooperation in terms of capacity overseas? Thank you.
Xiaopeng, Xiaopeng
Hi, it's Brian . Let me address this question.
Speaker Change: Yes, it's correct that I think international expansion is a key pillar of our growth curve.
Speaker Change: Xiaopeng articulated in the earlier opening speech. We see there's tremendous demand for our high quality technology products for a number of overseas markets.
Speaker Change: Three EB models in a respective category. So I think so far we are very encouraged by the response to our product and technology. In terms of...
Speaker Change: Going forward contribution, I think this year we continue to see increased expansion of our global platform. Our number of stores, internationally world double, I think our sales outlets.
Speaker Change: I think earlier, I think that we have jointly announced with our partner in Indonesia to explore local manufacturing solutions. We'll be also spending time in other regions. So we will obviously share with the market once we actually have these determined. But we do have a very detailed and also I would say...
Speaker Change: Agrested plan to make sure that we are well positioned to enter these international markets with the products, with the brand, and also with local capabilities.
Speaker Change: Okay, thank you Brian . The second question I would like to ask is about autonomous driving. Since we have set a goal this year to achieve one intervention per 100 kilometers in urban areas by the end of the year, I would like to ask if, for a function like L2++, an MPI of 100 is considered appropriate for a function like L2++ in our view.
Speaker Change: One is a medium to long-term goal, or we believe that the MPI could be higher than 100, surpassing 300 or even higher, which is an extreme goal for us. The second point is about how we view certain scenarios, such as car manufacturers or some insurance companies possibly taking on part of this responsibility, allowing consumers to use these support functions more confidently and with greater peace of mind. Thank you.
Let me translate the question.
Speaker Change: My second question is about autonomous driving and as we are going to…
Speaker Change: In large, the NPI to 100 kilometers very end of this year, do we think it is an ultimate goal for us or we aim higher and also do we consider how do we think of the
Thank you.
Wei, Wei, Wei, Wei, Wei, Wei, Wei, Wei,
Regarding the autonomous driving disengagement ceremony after how many kilometers, this is a...
Speaker Change: The ability to move forward in the middle of a paradox. How should this be understood?
Speaker Change: In other words, the wider the coverage of your autonomous driving, such as being able to reach residential areas, parking lots, and all small roads, the higher the takeover rate of your autonomous driving might be.
As your user base grows larger
Speaker Change: Because it won't be like the media, which tests its extreme capabilities to see if it's safe, it generally doesn't take over. But an ordinary user might have a sense of security or a need for efficiency when in a hurry, so they would take over.
Speaker Change: So from the perspective of our car companies, we need to look at the big data of car companies. Therefore, today all advanced Level 2 autonomous driving systems are still quite a distance away from achieving once per hundred kilometers. This includes even some L4 companies we see.
Speaker Change: Believe it is just a foundation under the combination of the next generation of models, the next generation of computing power, and the data of the next generation of vehicles.
A result better than what is tested in the market is our current goal and also the initial stage of our L3. I believe it is just the beginning, the initial connection. We hope to achieve hundreds or even thousands of kilometers of connection in the future.
Xie Xie
Thank you for joining us. Thank you. Thank you.
Let's say if you are just driving on the highway.
Speaker Change: And also, it depends on who you are and what your purpose is with the, you know, the testing and circulation of the human intervention, right? If you are a media, a member of the media, you're going to test the leverage of the ADS capability, which means that you're not [inaudible]
Speaker Change: We mentioned that we need to achieve such a milestone of one take over 100 kilometers of mileage or driving range. We're actually talking about some sort of measurement of our milestone. And essentially we're talking about the altitude capability that we expect to achieve. And then we believe and we are confident that we can achieve with our capability as well. And also we believe that we are way ahead of the game and we have a higher and more advanced capability than industry. [inaudible]
at beginning of the month.
I'm sorry. I'm sorry.
Regarding the second part you just mentioned, which is about a sense of security, such as insurance.
Speaker Change: We have already been doing a lot of exploration, including proposing new suggestions at the recent national conference.
I hope that relevant ministries and commissions can issue related laws and regulations earlier to determine the relevant responsibilities. I believe that in this process, China will be at the forefront globally and will achieve the determination of these capabilities in the near future. Thank you.
and others.
How about 50-60?
Hello, everyone. Welcome. Welcome.
Your next question comes from Nick Lay with JP Morgan.
Speaker Change: I'm sorry. I'm sorry. Sorry.
Nick Lay: Okay, thank you for letting me ask questions. I have two simple questions. The first question is that Mr. Xiaopeng just mentioned that usually a company has three relatively important growth drivers. One is AI cars, and the second is the overseas market.
Speaker Change: Let me translate my question very briefly, Chairman He mentioned that in the longer term we have three major business drivers, including AI car, overseas market, and humanoid robots.
Speaker Change: That's over to say 2030. How should we think about the scope of each of these products? Thanks.
Host: Thank you, it's difficult for me to answer your question.
In the next decade, which is until 2034, I hope that half of Xiaopeng's sales will come from China and the other half from the global market.
Speaker Change: Although we have a plan for 30 years, this plan cannot be disclosed.
Second, when will the grassroots of people's hearts reach a huge...
Jifu
Speaker Change: Or the turning point of the product, today I believe no one can clearly answer it.
Speaker Change: Perhaps between the end of 2026 and the end of 2027, when we initially see some young people being able to commercialize mass production, the answer to this question will be relatively more accurate. I think it is still a bit early now.
In the early days, possibly around 2010 or 2011, the era of electric vehicles was ingrained in people's minds.
Speaker Change: Thank you. It's very hard to answer your question. What I can only say for now is that in the coming 10 years, meaning by 24, we hope that half of ourselves will come from China and the other half will come from the overseas market. We do have our internal plan and targets for 2030, but unfortunately I have to keep it confidential. And the second part of your, I mean
Duoy, Roebot Development. Thank you.
Speaker Change: Okay, very clear, thank you. My second question is about the new industrial policy announced by the EU government two weeks ago. This industrial policy is related to us as it promotes smart electric vehicles and encourages foreign investment. Since we have a collaboration with Volkswagen, I wonder if under this new EU policy, our current product structure with Volkswagen, which is 'In China for China,' could potentially lead to us finally establishing an R&D center overseas.
Speaker Change: [inaudible] My second question is really about new policy announced by Yuqian government, lately encouraging all of this important investment in European car market, especially in AI, auto-striping car. And given the partnership with Wolf Fargon, it's any new opportunity we can explore from there. Thanks.
Hello, everyone. Welcome. Welcome.
Speaker Change: and also we are in the process bringing our autonomous driving technology to the global customers.
Speaker Change: I think that we are, right now we are setting up the infrastructure to start a preparation. I think in terms of the collaboration with Volkswagen currently I think that we are, I think our teams and engineering teams are working really hard to push for the SOP of the G9 platform collaboration as well as the EA collaboration.
Speaker Change: We do believe that there is a potential and also the industrial logic to collaborate in the potential overseas market. Thank you.
Hello, everyone. Welcome. Welcome. Welcome.
[inaudible]
Speaker Change: That does conclude our question and answer session. I'd like to count the call back over to the company for closing remarks.
Speaker Change: 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 the Pearson financial communications.
I'm sorry, I'm sorry, I'm sorry, I'm sorry, I'm sorry
Speaker Change: That does conclude our conference for today. Thank you for participating. You may disconnect your line.
Zhang, Xiaopeng He, Xiaopeng He, Xiaopeng
[inaudible]
Jiaming Wu, Jiaming Wu, Xpeng
[inaudible]