Xpeng is confident of achieving rapid volume growth and a significant rebound in gross margin in the fourth quarter.
(Image credit: CnEVPost)
Xpeng (NYSE: XPEV) announced its Q3 earnings today and held an analyst call afterwards.
Here’s what the company mentioned on that call, with the latest at the top.
Xpeng expects vehicle margins to turn positive in the fourth quarter, supported by a better product mix.
All of Xpeng’s models will benefit from reduced technology as well as business costs, though the company will focus that effort more on its top-selling models.
Xpeng’s guidance for the fourth quarter includes consideration of realities, including competition, and is confident that it will be achieved.
Xpeng’s sales channel is seeing a huge refresh under new president Wang Fengying and eliminated nearly 100 of its worst-performing stores in the first three quarters of the year.
Xpeng has brought in more strong dealers under the Jupiter Project, and it is expected that by the end of this year to early next year Xpeng’s sales network will include 500 stores.
Xpeng will have over 100 new dealer stores in the fourth quarter of this year.
As of September 30, Xpeng’s physical sales network consisted of 395 stores.
Xpeng is confident that the additional dealer stores will generate significant sales growth in the first and second quarters of next year as the new stores become more well-established.
Xpeng’s strategic cooperation in the supply chain is advancing fruitfully, and that cost reduction in the supply chain will produce significant results in the next year.
In order to strengthen its comprehensive cost control capability, Xpeng will learn from its local peers and do so in the whole process of design, R&D, manufacturing and marketing.
Optimizing cost control is progressing rapidly, and Xpeng is confident that it will accelerate or even surpass its original goal of achieving a 25 percent overall cost reduction by the end of 2024.
The Xpeng X9 will go on pre-sale at the Guangzhou auto show on November 17 and deliveries will begin in early January 2024.
Xpeng expects the X9 to be the number one seller in the large pure electric MPV market.
Xpeng’s new EV brand, codenamed Mona, planned for 2024, will launch its first model in the third quarter of next year.
The launch of the Mona model next year is just the beginning, and Xpeng will spearhead the launch of a number of self-driving-enabled models in the most mainstream RMB 150,000 class through further technological innovation and cost control.
Xpeng achieved RMB 1 billion of positive free cash flow in the third quarter and is on track for record deliveries in the fourth quarter, targeting over 60,000 units.
Xpeng is confident that it will realize rapid volume growth and a significant rebound in gross margins in the fourth quarter, and is well positioned to achieve a much higher growth rate than the industry and significant market share expansion in 2024.
Xpeng kicked off public beta testing of XNGP in the first 20 cities that don’t rely on HD maps at its Tech Day event on October 24, and the company will have the feature covering 50 cities in China by the end of December.
Xpeng Q3 revenue slightly below expectations, gross margin still negative
