NYSE:XPEV XPeng Q1 2025 Earnings Report $19.26 -0.05 (-0.23%) As of 02:14 PM Eastern This is a fair market value price provided by Polygon.io. Learn more. ProfileEarnings HistoryForecast XPeng EPS ResultsActual EPS-$0.10Consensus EPS -$1.51Beat/MissBeat by +$1.41One Year Ago EPSN/AXPeng Revenue ResultsActual Revenue$2.18 billionExpected Revenue$15.80 billionBeat/MissMissed by -$13.62 billionYoY Revenue GrowthN/AXPeng Announcement DetailsQuarterQ1 2025Date5/21/2025TimeBefore Market OpensConference Call DateWednesday, May 21, 2025Conference Call Time8:00AM ETUpcoming EarningsXPeng's Q2 2025 earnings is scheduled for Tuesday, August 19, 2025, with a conference call scheduled at 8:00 AM ET. Check back for transcripts, audio, and key financial metrics as they become available.Conference Call ResourcesConference Call AudioConference Call TranscriptPress Release (6-K)Earnings HistoryCompany ProfilePowered by XPeng Q1 2025 Earnings Call TranscriptProvided by QuartrMay 21, 2025 ShareLink copied to clipboard.PresentationSkip to Participants Operator00:00:00Hello, ladies and gentlemen. Thank you for standing by for the First Quarter twenty twenty five Earnings Conference Call for Xpeng, Inc. At this time, all participants are in listen only mode. After management's remarks, there will be a question and answer session. Today's conference call is being recorded. Operator00:00:17I will now turn the call over to your host, Mr. Alex Yee, Head of Investor Relations and Capital Markets of the company. Please go ahead, Alex. Alex XieHead - IR & Capital Markets at XPeng00:00:29Thank you. Hello, everyone, and welcome to X Feng's first quarter twenty twenty five earnings conference call. Our financial and operating results were issued via newswire services earlier today and available online. You can also view the earnings press release by visiting the IR section of our website at ir.xiappeng.com. Participants on today's call from our management will include our Co Founder, Chairman and CEO, Mr. Alex XieHead - IR & Capital Markets at XPeng00:00:52He Xiaopeng Vice Chairman and President, Doctor. Brian Gu Vice President of Corporate Finance and BW Projects, 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 and A session. Alex XieHead - IR & Capital Markets at XPeng00:01:10A webcast replay of this conference call will be available on our website on IR. 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 of 1995. Forward looking statements involve inherent risks and uncertainties. Alex XieHead - IR & Capital Markets at XPeng00:01:32As such, the company's results may be materially different from 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. Alex XieHead - IR & Capital Markets at XPeng00:01:59Please also note that Xpeng's earnings press release and this conference call will 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 Xiaoping. Please go ahead. Moderator00:03:18Hello, everyone. The first quarter of twenty twenty five marked a promising start for Xpeng as the company successfully navigated the traditional off season in the automotive market. Our Q1 deliveries totaled 94,008 units, marking a 331% year over year increase and establishing a new historical record for quarterly deliveries. We secured the top position in sales among emerging EV brands, both domestically and internationally. During this quarter, our vehicle gross margin has improved for seven consecutive quarters, propelling the company's overall gross margin to a record high of 15.6% in Q1 twenty twenty five, with net loss narrowing significantly compared to the previous quarter. Moderator00:04:03Free cash flow exceeded 3,000,000,000 in Q1. Many are curious about our impressive performance in Q1. I believe it stems from Xpeng's systemic enhancement across our capabilities in organization, product development, marketing, technology operations, along with a consistent commitment to AI driven tech innovation and steady and long term sustainable growth. The Mona M03, introduced eight months ago, has surpassed 100,000 deliveries, securing its place as the best selling A Class pure electric sedan. The P7 plus achieved its fifty thousandth unit production just twelve months after its launch. Moderator00:05:37And the twenty twenty five g six and g nine models delivered over 7,500 units in total in their April debut. Our monthly deliveries have exceeded 30,000 units for six consecutive months. I'm most excited by the fact that our growth potential is just starting to emerge. We are spearheading integrated innovations powered by AI in various fields, including AI chassis, touring AI assisted driving, smart cabins, Turing tips chips, embodied intelligent robots, and enterprise productivity tools. In q two, we achieved significant progress in several areas, reinforcing our conviction that XBANK's comprehensive transformation toward AI has begun to achieve initial success across the full technology stack. Moderator00:07:35Some of our key AI capabilities are poised to create generational leadership within the industry in 2026. I'm confident that through the extensive application of our physical world foundation model and Turing chips and vehicles, the global deployment of AI powered vehicles and related policies along with the innovative advancement of humanoid robots, Xpeng will lead three growth curves and attain sustainable long term high growth. Xpeng has actively embraced a strategy of democratizing technology aimed at reducing barriers to advanced technology through innovative r and d and crafting products that resonate with users. These efforts makes premium technology accessible to all. On May, we will launch the Mona m zero three Max. Moderator00:09:33The full performance edition will debut touring AI assisted driving in the 150,000 RMB price sector for the first time. This innovation enables tech savvy young consumers to experience top tier intelligent features once exclusive to luxury vehicles without compromise, ensuring safe and smooth AI assisted driving. This launch represents a pivotal moment for AI democratization within the automotive sector, shaping up the current landscape where smart urban driving and highway driving is limited to high end models at premium price points and showcasing Chinese automakers' groundbreaking innovations in physical world AI. In June, the G7 will make its debut to the public, and I'm confident that it will stand out as a highly competitive new product in the RMB 250,000 class SUV market. In Q3, we'll launch the new generation P7, a luxury sports coupe in the RMB 300,000 segment. Moderator00:11:14In Q4, our Kunpeng super electric models will gradually begin mass production, realizing the one vehicle dual energy options approach. The Kunpeng series aims to expand our reach to a wider consumer base, both domestically and internationally, unlocking substantial sales growth potential. Xpeng's global expansion represents our second growth curve. We anticipate that our overseas business will experience rapid growth over the next three years, becoming a significant contributor to our sales and profit increase. In Q1 twenty twenty five, overseas deliveries soared by more than 371,700 year over year, solidifying our status as China's leading exporter of mid to high end new energy vehicles. Moderator00:12:53During Q1, we opened over 40 new stores abroad, entering key markets such as The UK and Europe and Indonesia in Southeast Asia. As a global technology company, we strive to enhance localized R and D, manufacturing and services globally, establishing a unique mid to high end brand rooted in technological innovation. Let me now give you an update on AI development. 2025 signifies the launch of Xpeng's full scale implementation of the physical world foundation model in AI powered vehicles, further extending our generational advantage. We have developed the most comprehensive and sophisticated full stack in house r and d system with the highest potential in the industry, which includes the Hawkeye PureVision ADAS solution, self developed high performance Turing chips, ultra large scale cloud based foundation model, fully localized VIA models, vehicle EEA architecture, and physical simulation systems. Moderator00:14:59This strengthens our strategy for advanced autonomous driving, establishing formidable competitive barriers. Moving forward, we'll expedite R and D efforts from L2 plus assisted driving to L3 and L4 autonomous driving technologies, widening our generational lead. Xpeng is the pioneer in China's automotive sector for implementing urban smart driving without depending on LiDAR. Our Hawkeye PureVision ADAS solution, although difficult to develop, greatly enhances the upper limit of safety and user experience. We improved the capacity, parameters and inference frequency of our visual perception models, significantly reducing end to end latency for quicker and safer assisted driving. Moderator00:16:45Our enhanced three sixty degree environmental perception performs exceptionally well in intricate urban environments, including turns, U turns, and under adverse weather conditions, as rain, snow or fog, enhancing both safety and driving experience. Furthermore, Xpeng Hawkeye Pure Vision ADAS solution is ideally positioned for the global rollout of high end autonomous driving and the shift from AI cars to advanced intelligent robots. In my view, the crown of physical world AI lies in chips, models, data and infrastructure with chips as the dual. Xpeng has been committed to in house chip development since 2021. In 2024, our self developed chip succeeded in its first tape out. Moderator00:18:37The Turing chip delivers three to seven times the effective confused power of mainstream automotive chips. Through a full stack in house development and close loop integration of hardware, software, compilers and model architecture, we maximize synergy between chips and AI models. Our dedication to chip R and D will not only deliver industry leading in vehicle computing power and models, but also elevate the efficiency and overall experience of Xpeng's edge side AI models. In the ecosystem of the Physical World AI model, the benefits of the scaling law are becoming clear. Xpeng is working on larger scale cloud based foundation models and edge side models. Moderator00:20:45Our physical world foundation model is the cloud that in the cloud has achieved 72,000,000,000 parameters. To facilitate its training, we established the first ten thousand GPU AI computing cluster in the Chinese automotive industry, maintaining an operational efficiency of over 90% throughout the year. By the end of the year, our high quality training data will expand to 200,000,000 video clips that depicts various driving scenarios across the country. Powered by large computing resources and extensive data, our foundation model can understand the real world and execute complex reasoning similar to human capabilities. It will evolve through reinforcement learning to outperform seasoned human drivers, laying the groundwork for L3, L4 autonomy and autonomous driving, and eventually acting as a universal model for all XPENS physical AI terminals. Moderator00:21:37We create edge models via knowledge distillation and pruning to align with in vehicle computing power, leveraging the foundation model's capabilities as much as possible to enable industry leading inference on devices. To truly outperform traditional vehicles, AI powered cars must possess true intelligence, integrating its three core capabilities of the brain, cerebrum, and the spinal cord. For XBANK's Smart Cockpit, we're currently developing a multi model large model that entirely functions locally on Turing chips. This advancement facilitates smarter voice interactions and a more personalized user experience and ensures smooth operation even in office conditions, significantly enhancing safety and global scalability. This will be China's First large model capable of fully localized multilingual interaction and VLA features in a cockpit, paving the way for rapid improvement in the vehicle's intelligence. Moderator00:24:48Our investments in AI vehicles also provide distinct advantages in humanoid robot R and D in China's Robotics industry. The Iron, our fourth generation robots celebrated at the Shanghai Auto Show will soon be followed by a fifth generation model powered by Turing chips, significantly enhancing on device computing capabilities. Xpeng's robot models will surpass traditional industry technological approaches such as small reinforcement learning models and fragmented systems by utilizing the VLA architecture of our physical world foundation model and taking advantage of our existing cloud AI infrastructure to improve robotic intelligence. As a type of embodied intelligence, humanoid robots will represent Xpeng's third growth curve. We aim to launch industry leading humanoid robots for industrial and commercial applications in 2026 and evolve rapidly through data from mass production scenarios. Moderator00:26:47I'm optimistic that the robust growth momentum will carry on into 2025. In the second quarter, we'll finalize annual upgrades or configuration improvements for five models with two brand new major models set to begin deliveries in the third quarter. For the second quarter, we estimate total vehicle deliveries to range from 102,000 to 108,000 units, reflecting a year over year increase of 237.7 to 257.5%. Revenue is expected to be between RMB17.5 billion to RMB18.7 billion, representing a year over year growth of 115.7% to 130.5%. I believe we'll not only meet our goal of more than doubling sales growth this year, but we'll also achieve profitability in Q4 and generate substantial free cash flow for the entire year. Moderator00:27:40With enhanced self sustaining capabilities, we'll drive ongoing breakthroughs in AI technology and product development. Thank you, everyone. With that, I'll now turn the call over to our VP of Finance, Mr. James, who will discuss our financial performance for the first quarter of twenty twenty five. Jiaming WuVice President of Finance & Accounting at XPeng00:28:06Thank you, Xiaopeng. Now let me provide a brief overview of our financial results for the first quarter of twenty twenty five. I'll reference RMB only in my discussion today, unless otherwise stated. Our total revenues were billion for the first quarter of twenty twenty five, an increase of 141.5% year over year and a decrease of 1.8% quarter over quarter. Revenues from vehicle sales were CNY14.37 billion for the first quarter of twenty twenty five, an increase of 159.2% year over year and a decrease of 2.1% quarter over quarter. Jiaming WuVice President of Finance & Accounting at XPeng00:28:46The year over year increase was mainly attributable to higher deliveries. Revenues from services and others were CNY 1,440,000,000.00 for the first quarter of twenty twenty five, representing an increase of 43.6% year over year and an increase of 0.5% quarter over quarter. The year over year increase was mainly attributable to the increased revenues from technical R and D services related to the Volkswagen Group, repair and maintenance services and auto financing services. Services. Gross margin was 15.6% for the first quarter of twenty twenty five compared with 12.9% for the same period of 2024 and fourteen point four percent for the fourth quarter of twenty twenty four. Jiaming WuVice President of Finance & Accounting at XPeng00:29:34Vehicle margin was 10.5% for the first quarter of twenty twenty five compared with 5.5% for the same period of 2024 and ten percent for the fourth quarter of twenty twenty four. The year over year and quarter over quarter increases were primarily attributable to the ongoing cost reduction and economies of scale driven by the increase in sales volume, partially offset by the inventory provision and losses on purchase commitment related to the upgrade of certain vehicle models. R and D expenses were billion for the first quarter of twenty twenty five, representing an increase of 46.7% year over year and a decrease of 1.3% quarter over quarter. The year over year increase was mainly due to higher expenses related to the development of new vehicle models and technologies as the company expanded its product portfolio to support future growth. SG and A expenses were RMB1.95 billion for the first quarter of twenty twenty five, representing an increase of 40.2% year over year and a decrease of 14.5% quarter over quarter. Jiaming WuVice President of Finance & Accounting at XPeng00:30:48The year over year increase was primarily attributable to the higher commissions paid to the franchise stores, driven by higher sales volume. The quarter over quarter decrease was mainly due to lower marketing and advertising expenses. As a result of the foregoing, loss from operations was 1,040,000,000.00 for the first quarter of twenty twenty five compared with CNY 1,650,000,000.00 year over year and CNY 1,560,000,000.00 quarter over quarter. Net loss was 660,000,000.00 for the first quarter of twenty twenty five compared with RMB1.37 billion year over year and RMB1.33 billion quarter over quarter. As of 03/31/2025, our company had equivalents, restricted cash, short term investments and time deposits in total of billion. Jiaming WuVice President of Finance & Accounting at XPeng00:31:43To 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 first quarter twenty twenty five financial results. This concludes our prepared remarks. We'll now open the call to questions. Operator, please go ahead. Operator00:32:02Thank 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, and management will respond. Then feel free to follow-up with your next question. Your first question comes from Tim Tsao with Morgan Stanley. Tim HsiaoAnalyst at Morgan Stanley00:33:20So my first question is about the volume sales, because Xpeng has successfully kept monthly run rate about 30,000 units for six months in a row outperforming EV startup peers during the low season. Given the strong model pipelines as the CEO just mentioned, should we expect more significant sales jump in the following quarter? So I just want to get more clarity on the volume upside. That's my first question. Thank you. Moderator00:34:56Thank you so much for your question. First of all, I think it is our performance in the past quarter definitely aligns with our overall strategy of long term and steady development. And we are doing everything we can to lay good foundations very comprehensively for our future long term development. For q two, we expect to actually have five upgraded versions or improvement phase one versions, which may cause some changes in the market in the midterm or short term, but it will be very beneficial for the long term development of the country, but for the company. But I would like to actually highlight three things. Moderator00:35:29First of all, starting from q three, you're going to see our momentum of launching new models even more aggressively going into 2026, and it's going to generate more deliveries. The second aspect is our AI capability and our R and D efforts being translated into AI performance on our cars and also our robots, which will allow us to maintain a leader in the industry and really widening our generational difference between ourselves and our competitors. The last aspect, something that I want everyone to pay attention to is our Kunpong electric drive system, which also will go into is going to power our future lineup. Thank you. Brian Hongdi GuVice Chairman and Co-President at XPeng00:36:08Yes, Tim, it's Brian. Let me just add to what Xiaopo mentioned. First of all, the steady performance that we saw in the previous many months actually also reflects improved operation quality. For example, the first quarter usually are the low seasons for Chinese auto sales, and we maintain still steady growth. And also the second quarter, despite many transitions we need to handle for our refreshments of products, we still see very stable and steady delivery numbers. Brian Hongdi GuVice Chairman and Co-President at XPeng00:36:44So those actually, I would say, representative of the operation quality that we have. Looking forward, we actually have very strong confidence that with now the many new launches, for example, the Mona Max by the end of this month and also the next couple of months with G6 and G7 and P7 launches. All of them, we think, will be catalysts for further growth. So we believe that in the third quarter, we'll see continued growth in our delivery numbers and hitting historical highs again. And another thing I think I wanted to also highlight is that also you can look at the new models that we're introducing. Brian Hongdi GuVice Chairman and Co-President at XPeng00:37:28Those will represent products in higher price categories as well as with better profit gross profit margins. So this also introduced a very, I would say, favorable mix towards our overall product mix. And I'll have James comment on the yes. Okay. Just next question then. Operator00:37:58Your next question comes from Ming Li with Bank of America. Ming Hsun LeeManaging Director - Head of Greater China Auto research at Bank of America00:38:46So for your export business, could you give us the latest guidance for your growth in 2025 and among all the different regions, which area do you see a higher growth and for Europe EU EU zone because they increased the tariff for the EV betting in China since last year. So right now, what is your current strategy in this market? Thank you. Brian Hongdi GuVice Chairman and Co-President at XPeng00:39:18Min, it's Brian. Let me address your question. Yes, indeed, we have seen a very strong international growth and also contribution to our results, both on the top line as well as on the bottom line. It is actually an area we actually are increasing our efforts with investments as well as our team focuses. I would say that this year, our continued focus will be on the European, Middle East and Southeast Asia, those three core regions. Brian Hongdi GuVice Chairman and Co-President at XPeng00:39:49And also some of the regions we also have launched recently, for example, The U. K, Indonesia as well as, I think, continued growth we are seeing across a number of the markets that we entered later last year. So I would say these actually are showing pretty balanced overall growth, all reaching triple digit growth, I would say, in the last quarter year over year. Going forward, I think we are continue to kind of expand to additional markets. We're looking at also some of the other regions that we currently doesn't have a focus yet, for example, Latin America as well as some other countries in the Asian region. Brian Hongdi GuVice Chairman and Co-President at XPeng00:40:36The issue on the tariff, I think, is something that we are very, very focused on. Clearly, it's having an impact on the profitability of our business, for example, in Europe. However, I think we are committed to build for the longer term. We are also looking at ways to reduce the impact of these tariffs through more collaboration with our partners, change in product mix on the ground as well as potentially local investments that give us ability to navigate some of these tariff hits. So these are things that we are focusing at the moment. Brian Hongdi GuVice Chairman and Co-President at XPeng00:41:15And I think if there's any further progress, we'll be definitely sharing with you as well as the community. Ming Hsun LeeManaging Director - Head of Greater China Auto research at Bank of America00:42:22So my second question is related to your touring chip. So is well, g seven be the first model to use the touring chip in your your product portfolio. And going forward, where all of your XPON branded EV models use tooling chips. And by using these chips, I believe you can reduce your costs, Will you share the cost reduction benefit with your customers? Yes. Ming Hsun LeeManaging Director - Head of Greater China Auto research at Bank of America00:42:58So that's my question. Thank you. Moderator00:45:08Thank you. This is Xiaopeng. Thank you for the question. Now when it comes to our touring chip, the development of it has been going really, really well, not only when it comes to the application on our cars, but also in upgrading our autonomous driving capability in our cockpit and across a lot of our models. Currently, everything is going really well. Moderator00:45:25We have already going into we have already begun our production in second quarter this year, and we expect to mass produce some more models supported or with the touring chip in the third quarter of the year. Now when it comes to the mass production in a wider scale, we believe that it's going to happen very, very soon because with the development of our chip, we not only will be able to have a stronger and more competitive autonomous driving capability, but also stronger capabilities to support our other products. When it comes to the Turing chip itself, its AI computing power right now, the effective computing power is we are leading the industry because it's about three to seven times the chip computing power in mainstream edge side AI chips, which is very, very competitive and it's a huge step up of the game. So when it comes to the Turing chip and how it help us to go into the next level or next stage of the AI world, especially the physical AI world, we are going to leverage our physical world foundation model and also our edge side AI or in vehicle AI model, which will be very, very capable and powerful to allow us to go into higher level or more advanced level of autonomous driving. Moderator00:46:38We believe that in a very, very near future, we will be able to really showcase our generational lead in this regard. By that time, we're not gonna be talking about the human interference within the current, you know, how many miles. We're going to enter the next stage of autonomous driving. And that's when I believe we can really generate benefits and optimal optimize our user experience for our consumers. Because by that time, we not only will launch our new models with higher and advanced autonomous driving capability, but also leveraging our smart cockpits and also localized our VLA capability, X Pancars will definitely bring to you a completely new experience because our target of the company has always been democratizing high end technology. Moderator00:47:27We will bring benefits to all of the people and hope to hope that everyone can get access to this technology, one day and as soon as possible. And we believe that this new Turing chip can help us, to do that. Thank you. Ming Hsun LeeManaging Director - Head of Greater China Auto research at Bank of America00:47:42Thank you. That's all my question. Operator00:47:47Your next question comes from Pingyue Wu with SciTech Securities. Pingyue WuAnalyst at CITIC Securities Company00:48:42Thank you for taking my question. And my first question is about Mona. Mona, I'm looking forward to the release of Mona Max. And what is the rule of Mona series in our strategy? And what percentage share of Mona Max is our target? Pingyue WuAnalyst at CITIC Securities Company00:49:01Thank you. Moderator00:50:18Thank you for the question. Now this is definitely a question that we're going to explore. We're also curious about that as well because when you look at the current market, when it comes to the market segment of RMB 150,000, there is no real implementation of end to end large models or computing power of 500 tops and above. So these available cars are not the so called full performance models. So we are very excited about Mona and we are very curious about its penetration rate in the market. Moderator00:50:46I definitely have very high hopes for it because of our capability. And when you look at the across the industry, even for cars between 150,000 to 200,000, currently, there's very, very rare so called full performance version available in the market. So what is the penetration rate going to be, 50%, seventy %? We don't know. And but we are curious, and we'll try our best to achieve the maximum amount. Moderator00:51:12Thank you. And also regarding the part of your question that is about our M03 and the Mona series. Obviously, M03 was our first model of the whole Mona series. And in 2026, we can expect to see more models from this series. And Mona as a series, it really caters for young people's taste. Moderator00:52:25It needs to look cool and beautiful, provide this emotional value and connection with younger consumers. So we definitely can cater to that. We believe that after next year, you will be able to see the full potential of this series and it's going to be very impactful across the industry. Thank you. Pingyue WuAnalyst at CITIC Securities Company00:53:03And my second question is about the research and development investment. And for 2025, to what percentage of the R and D expense will be allocated to AI related areas or to what or how much to the increase of the R and D expense will be allocated to AI related areas? Thank you. Jiaming WuVice President of Finance & Accounting at XPeng00:53:35Thank you. This is James. So I'll answer your question regarding the overall R and D expenses for this year. So if you look at our total R and D expenses in 2024, it's around RMB6.5 billion. In 2025, we have guided around RMB8.5 billion of full year R and D expense, and this remains unchanged. Jiaming WuVice President of Finance & Accounting at XPeng00:53:59I would say the increased R and D expenses will a good amount of that will be spent on AI related activities, and that would primarily help us to improve our computational capability on a cloud basis. That will boast, as Xiaopeng mentioned earlier, be applied on the AI vehicle autonomous driving training as well as humanoid robot line as well. Obviously, there are other areas that we will continue to invest include smart cockpit equipped with local VLA features that will allow us to increase our capability on multi language voice command interaction function as well. And we should be able to also personalize our customer experience with more enhanced capability. Other than AI, obviously, we will continue to invest on a vehicle basis. Jiaming WuVice President of Finance & Accounting at XPeng00:54:57As you know, we will have additional vehicle models that will be launched this year and into 2026 as well to enhance our product portfolio and that will help us to complete our portfolio in the long term. Pingyue WuAnalyst at CITIC Securities Company00:55:15Your Operator00:55:22next question comes from Bin Wang with Deutsche Bank. Bin WangVP - Investment Banking at Deutsche Bank00:55:54Can you elaborate what's probably FX impact? Thank you. Jiaming WuVice President of Finance & Accounting at XPeng00:56:00Hey, Bin. This is James. So let me clarify. So in the first quarter, we did receive some level of let's say regulatory subsidies as well as tax rebates, tax handling fees, refunds things like that. The recognition of those revenues is based on the actual receipt of the cash proceeds, which occurred in the first quarter. Jiaming WuVice President of Finance & Accounting at XPeng00:56:30Now this is in the nature of, I would say, cash collections into the next couple of quarters. I'm not sure we'll continue to be benefited from this type of revenue recognitions. So that is on the other income side. You also asked a question about the FX movement in the first quarter. This is primarily driven by our business in Europe. Jiaming WuVice President of Finance & Accounting at XPeng00:56:57We have a pretty sizable, I would say, deliveries. We actually delivered more than 10,000 units in Europe over the course of last year. And we are exposed to euro from a revenue perspective. The strength in euro in the first quarter resulted in a portion of FX gain in the first quarter. But we've seen that to circle back a little bit in the recent months in April and May. Jiaming WuVice President of Finance & Accounting at XPeng00:57:26But we'll continue to monitor that exposure and be able to control our exposure to euro and not to ensure that FX impact through our exposure is not a surprise going forward. Thank you. Bin WangVP - Investment Banking at Deutsche Bank00:57:59The second question is about the second quarter ASP margin guidance. It seems that you have a better product mix in the second quarter because you have a smaller proportion from Molar M03. Can you provide guidance for the second quarter ASP and gross margin? Thank you. Jiaming WuVice President of Finance & Accounting at XPeng00:58:17Sure. This is James again. From a gross margin perspective, so first of all, I think we've observed we have achieved a seven consecutive months vehicle margin improvement. This is primarily due to our cost reduction efforts as well as achievement of certain levels of economies of scale. And then looking into Q2 and beyond, what I would say is there are still several areas we see that can help us further improve our vehicle margin. Jiaming WuVice President of Finance & Accounting at XPeng00:58:51The first is continue the product mix, as you mentioned, as we introduce new models, even with the model year changes on G6 and G9, we've seen healthier margin compared to the old models. And this in line will also help us to further higher our average sales price. What I would say is the ASP you've seen in first quarter is probably the lowest throughout the year. We will continue to sell better product mix to help us increase average sales price in the following quarters into 2025. The other thing that we continue to see is the material cost reduction through our supply chain optimization. Jiaming WuVice President of Finance & Accounting at XPeng00:59:37And then lastly, based on the volume projection and higher volume potentials in the third and fourth quarter, we should be able to achieve higher scale, which will help us to lower allocations and improve vehicle margin as well. So with all of that, we are pretty confident at this point that going into second half and into Q4, we believe that our total company gross margin should be able to get close to the high teens level to support us eventually achieve profitability in Q4 as we communicated earlier. Thank you. Bin WangVP - Investment Banking at Deutsche Bank01:00:21Thank you very much. Your Operator01:00:25next question comes from Zhao Yi Lei with Jefferies. Xiaoyi LeiAnalyst at Jefferies01:00:53My question is regarding the humanoid robots. We noticed that Iron has received a lot of attention at the Shanghai Auto Show. How are we going to leverage our existing know how from autonomous driving to robotics? What are the advantages of our products? And also, do we have a specific goal for the mass production of humanoid robot products? Xiaoyi LeiAnalyst at Jefferies01:01:22Thank you. Moderator01:02:37Thank you. So basically, robots or robotics robots development, they are operating as an independent center within the company, but it will leverage our overall in house full stack R and D capability. For example, the EEA of our robots are being developed by the EEA team of autonomous driving of our car department and also the joints within the humanoid robots are being developed by our powertrain team at XPank Motors And also the other parts, for example, the spinal cord of humanoid robot, the cerebellum, the cerebellum, which is the larger brain of the humanoid robot. I mean, everything combined is being developed by both the robotic team, but and also our autonomous driving, intelligent driving team. So I would say well, in addition to that, also our chips, you know, we leverage the chip capability when it comes to developing our iron or humanoid robots. Moderator01:03:29So I would say 70% of the development among our humanoid robots are coming from the same source as autonomous driving, our cars. Now, obviously, overall, these are two different products. They have different matrix. And so they do have different differences when it comes to their capabilities and features and form factors. So there are differences. Moderator01:04:46I think Xpeng is very different from other humanoid robots or robotics company. First of all, we are data driven. We redefine how we should build a humanoid robot. Also, have chips that we are developing in house. The operating system, we can develop in house. Moderator01:05:01And we also have full stack self development capability of our hardware and software. From that point of view, we are really guided by a super strong coupling capability to do things, especially when it comes to developing new products such as humanoid robot. So we expect to actually by 2026 going into a certain percentage of mass production capacity and can quickly going into can quickly enter a stage of OTA iteration. We also expect to actually bring forth some very surprising and brand new innovative products to the market, which will look very different from what we can see right now available in the market. Thank you. Xiaoyi LeiAnalyst at Jefferies01:05:43Thank you. That's very helpful. Operator01:05:47Your next question comes from Lu Jia with Jia LouAssociate Director at Bank of China International(BOCI)01:06:23My first question is regarding the vehicle margin in Q1. As we see that vehicle margin is negatively impacted by some inventory provision and the loss on purchase commitment related to some old models. Wondering if excluding these, what our core vehicle margin comes in, in future, if this impact will persist. Jiaming WuVice President of Finance & Accounting at XPeng01:06:59So we will answer your first question first. Thank you. Jia LouAssociate Director at Bank of China International(BOCI)01:07:03Okay. Jiaming WuVice President of Finance & Accounting at XPeng01:07:05This is James. So yes, we do recognize some level of purchase commitments as we change some of our models. One of the things you probably have from the media is that we have reviewed the very next generation of P7, which outlook design has received very well feedback from the market. So that's part of the recognition that we have done in the first quarter around the current generation of P7. We also have recently launched multi year changes for P6 and G9. Jiaming WuVice President of Finance & Accounting at XPeng01:07:47These have been included in the purchase commitments as well. Overall, I would say the impact of these in the scheme of things is relatively small. It doesn't change the overall trend of our margin improvement for the past seven consecutive months. What I would say is looking into the next couple of quarters in 2025, I wouldn't expect the purchase commitments related to our model changes is going to be significant. So you can take that as in your consideration. Jiaming WuVice President of Finance & Accounting at XPeng01:08:30What I would focus is, as mentioned earlier, our vehicle margin, given our continued cost reduction, continued climbing of higher economy of scale as well as the product mix improvement, we forecast vehicle margin to steady growth in the following quarters in 2025. Thank you. Jia LouAssociate Director at Bank of China International(BOCI)01:08:53Thank you. So my second question is that, looking forward into second half of the year, we will go upscale again by launching more high priced models. How management to get prepared for our premiumization? Thank you. Moderator01:11:47Thank you for the question. This is Xiaopeng. When it comes to our targeted market segment, I would say our current lineup basically feature around RMB 100,000 to RMB 400,000, in which Mona is around RMB 100,000 to 200,000 RMB. But basically across RMB 180,000 to RMB 500,000 will all be our target market segment. So starting from Q3 going into 2026, you can expect to actually see a lot of our new product launch that actually have brand new capabilities across not only the exterior, the design of the car, but also the smart cockpit and overall autonomous driving capability. Moderator01:12:33And people will be surprised. And I think a lot of people are going to really love our new launches. And so, for example, as you can see from our brand new P7 and also going which will be launched in q three, we are going to actually integrate new capabilities when it comes to the whole vehicle, the powertrain, architecture, the smart cockpit, and also the craftsmanship. I think all of these areas are something that we're going to focus on in the coming three years. And we believe such an improvement and overhaul of our capability being reflected in our lineup will showcase how great a company XPeng really is. Moderator01:13:18Also, from our past performance and recent months and quarters, can also see that these improvement have been well accepted by the market. And we believe that no matter what market price segments that we're targeting in, we are very confident of going into at least the top three, if not the top one, best selling models. In the future, we also are going to launch not only BEV models, but also super electric or dual energy vehicles as well. So we're very confident going into a premium market segment. Thank you. Operator01:13:56Your next question comes from Nick Lei with JPMorgan. Nick LaiAnalyst at JPMorgan Chase01:14:33My first question is pretty simple. At recent Shine Auto Show, we saw quite a few foreign brands, in particular from Japan, it's called Total Honda Nissan launching what they call in China for China with localized supplier local cost and very competitive price. And we spoke to Total Honda in the past few days and they indicated that in China in the next few years they are going to launch a few more such products. So I'm curious to understand from Xiaopeng's standpoint, how should we see the competition dynamic moving from here? Moderator01:16:37Thank you. Yes, we also observed the same trends from the market. I think competition are getting more and more aggressive from not only domestically but also internationally as well. I think this is something that we will continue to see and it's something that is destined to happen. But we're very firm on our position, which is that technology company sorry, car makers will need to have their technological capability in order to win in such a competition. Moderator01:17:05And there will be more and more impact on the market when you have a more powerful technological element, whereas your manufacturing capability or capacity will matter less and less. And also, trend that I want to highlight here is that automakers are going to sort of convert from an integrated R and D format to a model of maybe a single direction, full stack R and D of all resources to multi aspect fusion integrated r and d capability. And I think it will take time to happen, but we are pretty sure that it's going to take place. So ultimately, no matter how good your sales and marketing teams are doing, you need to be able to deliver the products that are popular and that resonates with the customers and fulfill user demands. So we're very happy to see that a lot of companies are changing their traditional way of doing things. Moderator01:18:05We are learning from them. We believe that they are learning something from us as well. And I think during this process, we also are able to change ourselves into, you know, the full stack R and D kind of way of doing research and development to a fusion integrated R and D ecosystem, entering a matrix of different R and D aspects. We believe that it will allow us to become even stronger technologically. And by that time, integrated companies with only integrated R and D capability are going to struggle, especially in the mid to long term competition? Moderator01:18:42Thank you. Nick LaiAnalyst at JPMorgan Chase01:19:06My second question is really quick update on our partnership with VW, We sold major models on VW as China auto show. And any very quick update on new milestone that Chairman can share with us? Thanks. Charles ZhangVice President of Corporate Finance & Investments at XPeng01:19:21Nick, it's Charles. I think the collaboration with Volkswagen has progressing at a very fast speed. And so far, we meet every milestone, and we are currently probably less than one year to SOP of some of our products. And yes, as you rightly pointed out, I think that our partner, Volkswagen, unveiled some of the models, for example, one model based on our G9 platform. And also there are multiple models that will be based on the EE architecture that we are jointly developing. Charles ZhangVice President of Corporate Finance & Investments at XPeng01:19:58So I think that all these models will start to come to market starting from early next year. So, so far, I think that I think the order we are meeting all the milestones. And I think looking forward, I think that we continue we'll work with our partner to jointly develop more products. And also, we are also exploring potential new opportunities that can bring win win value to our partnership. Operator01:20:33Thank you. That does conclude our question and answer session. Now I'd like to turn over the call to the company for closing remarks. Alex XieHead - IR & Capital Markets at XPeng01:20:41Thank you once again for joining us today. If you have further questions, please feel free to contact Investor Relations through the contact information provided on our website or the Pearson Financial Communications. Operator01:20:54This concludes today's conference call. You may now disconnect your line. Thank you.Read moreParticipantsExecutivesAlex XieHead - IR & Capital MarketsJiaming WuVice President of Finance & AccountingBrian Hongdi GuVice Chairman and Co-PresidentCharles ZhangVice President of Corporate Finance & InvestmentsAnalystsModeratorTim HsiaoAnalyst at Morgan StanleyMing Hsun LeeManaging Director - Head of Greater China Auto research at Bank of AmericaPingyue WuAnalyst at CITIC Securities CompanyBin WangVP - Investment Banking at Deutsche BankXiaoyi LeiAnalyst at JefferiesJia LouAssociate Director at Bank of China International(BOCI)Nick LaiAnalyst at JPMorgan ChasePowered by Key Takeaways In Q1, Xpeng delivered 94,008 units (+331% YoY), achieved a record high 15.6% gross margin and generated over RMB3 billion in free cash flow. Adopting an AI-driven full-stack strategy with Hawkeye PureVision ADAS, self-developed Turing chips and a 72 billion-parameter foundation model, targeting L3/L4 autonomy and humanoid robots by 2026. Strong 2025 product roadmap includes the Mona M03 Max (150 k-RMB segment) in May, the G7 SUV in June, next-gen P7 in Q3 and Kunpeng super electric series with dual-energy options in Q4. Rapid global expansion: Q1 overseas deliveries up 371% YoY, opening 40+ new stores in the UK, Europe and Indonesia, aiming for significant export growth over the next three years. Q2 guidance: 102k–108k vehicle deliveries (+238%–258% YoY) and revenue of RMB17.5–18.7 billion (+116%–131% YoY), with a goal to double 2025 sales and achieve Q4 profitability. AI Generated. May Contain Errors.Conference Call Audio Live Call not available Earnings Conference CallXPeng Q1 202500:00 / 00:00Speed:1x1.25x1.5x2xTranscript SectionsPresentationParticipants Earnings DocumentsPress Release(6-K) XPeng Earnings HeadlinesXPeng Inc. Reports Record EV Deliveries and Launches Innovative MONA M03 MaxJune 2 at 4:47 AM | tipranks.comXPENG Announces Vehicle Delivery Results for May 2025June 1 at 12:35 AM | gurufocus.comDo You Believe In President Trump? Answer This 1 QuestionThey said you wouldn’t last—that Bidenflation, Wall Street selloffs, and DEI funds would break your loyalty to Trump’s economic plan. But now there’s a way to protect your retirement without backing down. This free 2025 Wealth Protection Guide reveals how you can use a legal IRS loophole—nicknamed “Piggy Bank”—to shield your savings.June 2, 2025 | Colonial Metals (Ad)XPeng Inc. Achieves 33,525 Smart EV Deliveries in May 2025, Marking 230% Year-over-Year GrowthJune 1 at 12:10 AM | quiverquant.comXPENG Announces Vehicle Delivery Results for May 2025May 31 at 11:58 PM | globenewswire.comXPeng (NYSE:XPEV) Launches Next-Gen MONA M03 Max With Advanced AI Features In ChinaMay 29, 2025 | finance.yahoo.comSee More XPeng Headlines Get Earnings Announcements in your inboxWant to stay updated on the latest earnings announcements and upcoming reports for companies like XPeng? Sign up for Earnings360's daily newsletter to receive timely earnings updates on XPeng and other key companies, straight to your email. Email Address About XPengXPeng (NYSE:XPEV) designs, develops, manufactures, and markets smart electric vehicles (EVs) in the People's Republic of China. It offers SUVs under the G3, G3i, and G9 names; four-door sports sedans under the P7 and P7i names; and family sedans under the P5 name. The company also provides sales contracts, super charging, maintenance, technical support, auto financing, insurance, technology support, ride-hailing, automotive loan referral, and other services, as well as vehicle leasing and insurance agency services. In addition, it offers advanced driver-assistance system technology and in-car intelligent operating system; and vehicle systems comprising powertrains, and the electrical and electronic architecture. XPeng Inc. was founded in 2015 and is headquartered in Guangzhou, the People's Republic of China.View XPeng ProfileRead more More Earnings Resources from MarketBeat Earnings Tools Today's Earnings Tomorrow's Earnings Next Week's Earnings Upcoming Earnings Calls Earnings Newsletter Earnings Call Transcripts Earnings Beats & Misses Corporate Guidance Earnings Screener Earnings By Country U.S. Earnings Reports Canadian Earnings Reports U.K. Earnings Reports Latest Articles e.l.f. 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PresentationSkip to Participants Operator00:00:00Hello, ladies and gentlemen. Thank you for standing by for the First Quarter twenty twenty five Earnings Conference Call for Xpeng, Inc. At this time, all participants are in listen only mode. After management's remarks, there will be a question and answer session. Today's conference call is being recorded. Operator00:00:17I will now turn the call over to your host, Mr. Alex Yee, Head of Investor Relations and Capital Markets of the company. Please go ahead, Alex. Alex XieHead - IR & Capital Markets at XPeng00:00:29Thank you. Hello, everyone, and welcome to X Feng's first quarter twenty twenty five earnings conference call. Our financial and operating results were issued via newswire services earlier today and available online. You can also view the earnings press release by visiting the IR section of our website at ir.xiappeng.com. Participants on today's call from our management will include our Co Founder, Chairman and CEO, Mr. Alex XieHead - IR & Capital Markets at XPeng00:00:52He Xiaopeng Vice Chairman and President, Doctor. Brian Gu Vice President of Corporate Finance and BW Projects, 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 and A session. Alex XieHead - IR & Capital Markets at XPeng00:01:10A webcast replay of this conference call will be available on our website on IR. 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 of 1995. Forward looking statements involve inherent risks and uncertainties. Alex XieHead - IR & Capital Markets at XPeng00:01:32As such, the company's results may be materially different from 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. Alex XieHead - IR & Capital Markets at XPeng00:01:59Please also note that Xpeng's earnings press release and this conference call will 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 Xiaoping. Please go ahead. Moderator00:03:18Hello, everyone. The first quarter of twenty twenty five marked a promising start for Xpeng as the company successfully navigated the traditional off season in the automotive market. Our Q1 deliveries totaled 94,008 units, marking a 331% year over year increase and establishing a new historical record for quarterly deliveries. We secured the top position in sales among emerging EV brands, both domestically and internationally. During this quarter, our vehicle gross margin has improved for seven consecutive quarters, propelling the company's overall gross margin to a record high of 15.6% in Q1 twenty twenty five, with net loss narrowing significantly compared to the previous quarter. Moderator00:04:03Free cash flow exceeded 3,000,000,000 in Q1. Many are curious about our impressive performance in Q1. I believe it stems from Xpeng's systemic enhancement across our capabilities in organization, product development, marketing, technology operations, along with a consistent commitment to AI driven tech innovation and steady and long term sustainable growth. The Mona M03, introduced eight months ago, has surpassed 100,000 deliveries, securing its place as the best selling A Class pure electric sedan. The P7 plus achieved its fifty thousandth unit production just twelve months after its launch. Moderator00:05:37And the twenty twenty five g six and g nine models delivered over 7,500 units in total in their April debut. Our monthly deliveries have exceeded 30,000 units for six consecutive months. I'm most excited by the fact that our growth potential is just starting to emerge. We are spearheading integrated innovations powered by AI in various fields, including AI chassis, touring AI assisted driving, smart cabins, Turing tips chips, embodied intelligent robots, and enterprise productivity tools. In q two, we achieved significant progress in several areas, reinforcing our conviction that XBANK's comprehensive transformation toward AI has begun to achieve initial success across the full technology stack. Moderator00:07:35Some of our key AI capabilities are poised to create generational leadership within the industry in 2026. I'm confident that through the extensive application of our physical world foundation model and Turing chips and vehicles, the global deployment of AI powered vehicles and related policies along with the innovative advancement of humanoid robots, Xpeng will lead three growth curves and attain sustainable long term high growth. Xpeng has actively embraced a strategy of democratizing technology aimed at reducing barriers to advanced technology through innovative r and d and crafting products that resonate with users. These efforts makes premium technology accessible to all. On May, we will launch the Mona m zero three Max. Moderator00:09:33The full performance edition will debut touring AI assisted driving in the 150,000 RMB price sector for the first time. This innovation enables tech savvy young consumers to experience top tier intelligent features once exclusive to luxury vehicles without compromise, ensuring safe and smooth AI assisted driving. This launch represents a pivotal moment for AI democratization within the automotive sector, shaping up the current landscape where smart urban driving and highway driving is limited to high end models at premium price points and showcasing Chinese automakers' groundbreaking innovations in physical world AI. In June, the G7 will make its debut to the public, and I'm confident that it will stand out as a highly competitive new product in the RMB 250,000 class SUV market. In Q3, we'll launch the new generation P7, a luxury sports coupe in the RMB 300,000 segment. Moderator00:11:14In Q4, our Kunpeng super electric models will gradually begin mass production, realizing the one vehicle dual energy options approach. The Kunpeng series aims to expand our reach to a wider consumer base, both domestically and internationally, unlocking substantial sales growth potential. Xpeng's global expansion represents our second growth curve. We anticipate that our overseas business will experience rapid growth over the next three years, becoming a significant contributor to our sales and profit increase. In Q1 twenty twenty five, overseas deliveries soared by more than 371,700 year over year, solidifying our status as China's leading exporter of mid to high end new energy vehicles. Moderator00:12:53During Q1, we opened over 40 new stores abroad, entering key markets such as The UK and Europe and Indonesia in Southeast Asia. As a global technology company, we strive to enhance localized R and D, manufacturing and services globally, establishing a unique mid to high end brand rooted in technological innovation. Let me now give you an update on AI development. 2025 signifies the launch of Xpeng's full scale implementation of the physical world foundation model in AI powered vehicles, further extending our generational advantage. We have developed the most comprehensive and sophisticated full stack in house r and d system with the highest potential in the industry, which includes the Hawkeye PureVision ADAS solution, self developed high performance Turing chips, ultra large scale cloud based foundation model, fully localized VIA models, vehicle EEA architecture, and physical simulation systems. Moderator00:14:59This strengthens our strategy for advanced autonomous driving, establishing formidable competitive barriers. Moving forward, we'll expedite R and D efforts from L2 plus assisted driving to L3 and L4 autonomous driving technologies, widening our generational lead. Xpeng is the pioneer in China's automotive sector for implementing urban smart driving without depending on LiDAR. Our Hawkeye PureVision ADAS solution, although difficult to develop, greatly enhances the upper limit of safety and user experience. We improved the capacity, parameters and inference frequency of our visual perception models, significantly reducing end to end latency for quicker and safer assisted driving. Moderator00:16:45Our enhanced three sixty degree environmental perception performs exceptionally well in intricate urban environments, including turns, U turns, and under adverse weather conditions, as rain, snow or fog, enhancing both safety and driving experience. Furthermore, Xpeng Hawkeye Pure Vision ADAS solution is ideally positioned for the global rollout of high end autonomous driving and the shift from AI cars to advanced intelligent robots. In my view, the crown of physical world AI lies in chips, models, data and infrastructure with chips as the dual. Xpeng has been committed to in house chip development since 2021. In 2024, our self developed chip succeeded in its first tape out. Moderator00:18:37The Turing chip delivers three to seven times the effective confused power of mainstream automotive chips. Through a full stack in house development and close loop integration of hardware, software, compilers and model architecture, we maximize synergy between chips and AI models. Our dedication to chip R and D will not only deliver industry leading in vehicle computing power and models, but also elevate the efficiency and overall experience of Xpeng's edge side AI models. In the ecosystem of the Physical World AI model, the benefits of the scaling law are becoming clear. Xpeng is working on larger scale cloud based foundation models and edge side models. Moderator00:20:45Our physical world foundation model is the cloud that in the cloud has achieved 72,000,000,000 parameters. To facilitate its training, we established the first ten thousand GPU AI computing cluster in the Chinese automotive industry, maintaining an operational efficiency of over 90% throughout the year. By the end of the year, our high quality training data will expand to 200,000,000 video clips that depicts various driving scenarios across the country. Powered by large computing resources and extensive data, our foundation model can understand the real world and execute complex reasoning similar to human capabilities. It will evolve through reinforcement learning to outperform seasoned human drivers, laying the groundwork for L3, L4 autonomy and autonomous driving, and eventually acting as a universal model for all XPENS physical AI terminals. Moderator00:21:37We create edge models via knowledge distillation and pruning to align with in vehicle computing power, leveraging the foundation model's capabilities as much as possible to enable industry leading inference on devices. To truly outperform traditional vehicles, AI powered cars must possess true intelligence, integrating its three core capabilities of the brain, cerebrum, and the spinal cord. For XBANK's Smart Cockpit, we're currently developing a multi model large model that entirely functions locally on Turing chips. This advancement facilitates smarter voice interactions and a more personalized user experience and ensures smooth operation even in office conditions, significantly enhancing safety and global scalability. This will be China's First large model capable of fully localized multilingual interaction and VLA features in a cockpit, paving the way for rapid improvement in the vehicle's intelligence. Moderator00:24:48Our investments in AI vehicles also provide distinct advantages in humanoid robot R and D in China's Robotics industry. The Iron, our fourth generation robots celebrated at the Shanghai Auto Show will soon be followed by a fifth generation model powered by Turing chips, significantly enhancing on device computing capabilities. Xpeng's robot models will surpass traditional industry technological approaches such as small reinforcement learning models and fragmented systems by utilizing the VLA architecture of our physical world foundation model and taking advantage of our existing cloud AI infrastructure to improve robotic intelligence. As a type of embodied intelligence, humanoid robots will represent Xpeng's third growth curve. We aim to launch industry leading humanoid robots for industrial and commercial applications in 2026 and evolve rapidly through data from mass production scenarios. Moderator00:26:47I'm optimistic that the robust growth momentum will carry on into 2025. In the second quarter, we'll finalize annual upgrades or configuration improvements for five models with two brand new major models set to begin deliveries in the third quarter. For the second quarter, we estimate total vehicle deliveries to range from 102,000 to 108,000 units, reflecting a year over year increase of 237.7 to 257.5%. Revenue is expected to be between RMB17.5 billion to RMB18.7 billion, representing a year over year growth of 115.7% to 130.5%. I believe we'll not only meet our goal of more than doubling sales growth this year, but we'll also achieve profitability in Q4 and generate substantial free cash flow for the entire year. Moderator00:27:40With enhanced self sustaining capabilities, we'll drive ongoing breakthroughs in AI technology and product development. Thank you, everyone. With that, I'll now turn the call over to our VP of Finance, Mr. James, who will discuss our financial performance for the first quarter of twenty twenty five. Jiaming WuVice President of Finance & Accounting at XPeng00:28:06Thank you, Xiaopeng. Now let me provide a brief overview of our financial results for the first quarter of twenty twenty five. I'll reference RMB only in my discussion today, unless otherwise stated. Our total revenues were billion for the first quarter of twenty twenty five, an increase of 141.5% year over year and a decrease of 1.8% quarter over quarter. Revenues from vehicle sales were CNY14.37 billion for the first quarter of twenty twenty five, an increase of 159.2% year over year and a decrease of 2.1% quarter over quarter. Jiaming WuVice President of Finance & Accounting at XPeng00:28:46The year over year increase was mainly attributable to higher deliveries. Revenues from services and others were CNY 1,440,000,000.00 for the first quarter of twenty twenty five, representing an increase of 43.6% year over year and an increase of 0.5% quarter over quarter. The year over year increase was mainly attributable to the increased revenues from technical R and D services related to the Volkswagen Group, repair and maintenance services and auto financing services. Services. Gross margin was 15.6% for the first quarter of twenty twenty five compared with 12.9% for the same period of 2024 and fourteen point four percent for the fourth quarter of twenty twenty four. Jiaming WuVice President of Finance & Accounting at XPeng00:29:34Vehicle margin was 10.5% for the first quarter of twenty twenty five compared with 5.5% for the same period of 2024 and ten percent for the fourth quarter of twenty twenty four. The year over year and quarter over quarter increases were primarily attributable to the ongoing cost reduction and economies of scale driven by the increase in sales volume, partially offset by the inventory provision and losses on purchase commitment related to the upgrade of certain vehicle models. R and D expenses were billion for the first quarter of twenty twenty five, representing an increase of 46.7% year over year and a decrease of 1.3% quarter over quarter. The year over year increase was mainly due to higher expenses related to the development of new vehicle models and technologies as the company expanded its product portfolio to support future growth. SG and A expenses were RMB1.95 billion for the first quarter of twenty twenty five, representing an increase of 40.2% year over year and a decrease of 14.5% quarter over quarter. Jiaming WuVice President of Finance & Accounting at XPeng00:30:48The year over year increase was primarily attributable to the higher commissions paid to the franchise stores, driven by higher sales volume. The quarter over quarter decrease was mainly due to lower marketing and advertising expenses. As a result of the foregoing, loss from operations was 1,040,000,000.00 for the first quarter of twenty twenty five compared with CNY 1,650,000,000.00 year over year and CNY 1,560,000,000.00 quarter over quarter. Net loss was 660,000,000.00 for the first quarter of twenty twenty five compared with RMB1.37 billion year over year and RMB1.33 billion quarter over quarter. As of 03/31/2025, our company had equivalents, restricted cash, short term investments and time deposits in total of billion. Jiaming WuVice President of Finance & Accounting at XPeng00:31:43To 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 first quarter twenty twenty five financial results. This concludes our prepared remarks. We'll now open the call to questions. Operator, please go ahead. Operator00:32:02Thank 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, and management will respond. Then feel free to follow-up with your next question. Your first question comes from Tim Tsao with Morgan Stanley. Tim HsiaoAnalyst at Morgan Stanley00:33:20So my first question is about the volume sales, because Xpeng has successfully kept monthly run rate about 30,000 units for six months in a row outperforming EV startup peers during the low season. Given the strong model pipelines as the CEO just mentioned, should we expect more significant sales jump in the following quarter? So I just want to get more clarity on the volume upside. That's my first question. Thank you. Moderator00:34:56Thank you so much for your question. First of all, I think it is our performance in the past quarter definitely aligns with our overall strategy of long term and steady development. And we are doing everything we can to lay good foundations very comprehensively for our future long term development. For q two, we expect to actually have five upgraded versions or improvement phase one versions, which may cause some changes in the market in the midterm or short term, but it will be very beneficial for the long term development of the country, but for the company. But I would like to actually highlight three things. Moderator00:35:29First of all, starting from q three, you're going to see our momentum of launching new models even more aggressively going into 2026, and it's going to generate more deliveries. The second aspect is our AI capability and our R and D efforts being translated into AI performance on our cars and also our robots, which will allow us to maintain a leader in the industry and really widening our generational difference between ourselves and our competitors. The last aspect, something that I want everyone to pay attention to is our Kunpong electric drive system, which also will go into is going to power our future lineup. Thank you. Brian Hongdi GuVice Chairman and Co-President at XPeng00:36:08Yes, Tim, it's Brian. Let me just add to what Xiaopo mentioned. First of all, the steady performance that we saw in the previous many months actually also reflects improved operation quality. For example, the first quarter usually are the low seasons for Chinese auto sales, and we maintain still steady growth. And also the second quarter, despite many transitions we need to handle for our refreshments of products, we still see very stable and steady delivery numbers. Brian Hongdi GuVice Chairman and Co-President at XPeng00:36:44So those actually, I would say, representative of the operation quality that we have. Looking forward, we actually have very strong confidence that with now the many new launches, for example, the Mona Max by the end of this month and also the next couple of months with G6 and G7 and P7 launches. All of them, we think, will be catalysts for further growth. So we believe that in the third quarter, we'll see continued growth in our delivery numbers and hitting historical highs again. And another thing I think I wanted to also highlight is that also you can look at the new models that we're introducing. Brian Hongdi GuVice Chairman and Co-President at XPeng00:37:28Those will represent products in higher price categories as well as with better profit gross profit margins. So this also introduced a very, I would say, favorable mix towards our overall product mix. And I'll have James comment on the yes. Okay. Just next question then. Operator00:37:58Your next question comes from Ming Li with Bank of America. Ming Hsun LeeManaging Director - Head of Greater China Auto research at Bank of America00:38:46So for your export business, could you give us the latest guidance for your growth in 2025 and among all the different regions, which area do you see a higher growth and for Europe EU EU zone because they increased the tariff for the EV betting in China since last year. So right now, what is your current strategy in this market? Thank you. Brian Hongdi GuVice Chairman and Co-President at XPeng00:39:18Min, it's Brian. Let me address your question. Yes, indeed, we have seen a very strong international growth and also contribution to our results, both on the top line as well as on the bottom line. It is actually an area we actually are increasing our efforts with investments as well as our team focuses. I would say that this year, our continued focus will be on the European, Middle East and Southeast Asia, those three core regions. Brian Hongdi GuVice Chairman and Co-President at XPeng00:39:49And also some of the regions we also have launched recently, for example, The U. K, Indonesia as well as, I think, continued growth we are seeing across a number of the markets that we entered later last year. So I would say these actually are showing pretty balanced overall growth, all reaching triple digit growth, I would say, in the last quarter year over year. Going forward, I think we are continue to kind of expand to additional markets. We're looking at also some of the other regions that we currently doesn't have a focus yet, for example, Latin America as well as some other countries in the Asian region. Brian Hongdi GuVice Chairman and Co-President at XPeng00:40:36The issue on the tariff, I think, is something that we are very, very focused on. Clearly, it's having an impact on the profitability of our business, for example, in Europe. However, I think we are committed to build for the longer term. We are also looking at ways to reduce the impact of these tariffs through more collaboration with our partners, change in product mix on the ground as well as potentially local investments that give us ability to navigate some of these tariff hits. So these are things that we are focusing at the moment. Brian Hongdi GuVice Chairman and Co-President at XPeng00:41:15And I think if there's any further progress, we'll be definitely sharing with you as well as the community. Ming Hsun LeeManaging Director - Head of Greater China Auto research at Bank of America00:42:22So my second question is related to your touring chip. So is well, g seven be the first model to use the touring chip in your your product portfolio. And going forward, where all of your XPON branded EV models use tooling chips. And by using these chips, I believe you can reduce your costs, Will you share the cost reduction benefit with your customers? Yes. Ming Hsun LeeManaging Director - Head of Greater China Auto research at Bank of America00:42:58So that's my question. Thank you. Moderator00:45:08Thank you. This is Xiaopeng. Thank you for the question. Now when it comes to our touring chip, the development of it has been going really, really well, not only when it comes to the application on our cars, but also in upgrading our autonomous driving capability in our cockpit and across a lot of our models. Currently, everything is going really well. Moderator00:45:25We have already going into we have already begun our production in second quarter this year, and we expect to mass produce some more models supported or with the touring chip in the third quarter of the year. Now when it comes to the mass production in a wider scale, we believe that it's going to happen very, very soon because with the development of our chip, we not only will be able to have a stronger and more competitive autonomous driving capability, but also stronger capabilities to support our other products. When it comes to the Turing chip itself, its AI computing power right now, the effective computing power is we are leading the industry because it's about three to seven times the chip computing power in mainstream edge side AI chips, which is very, very competitive and it's a huge step up of the game. So when it comes to the Turing chip and how it help us to go into the next level or next stage of the AI world, especially the physical AI world, we are going to leverage our physical world foundation model and also our edge side AI or in vehicle AI model, which will be very, very capable and powerful to allow us to go into higher level or more advanced level of autonomous driving. Moderator00:46:38We believe that in a very, very near future, we will be able to really showcase our generational lead in this regard. By that time, we're not gonna be talking about the human interference within the current, you know, how many miles. We're going to enter the next stage of autonomous driving. And that's when I believe we can really generate benefits and optimal optimize our user experience for our consumers. Because by that time, we not only will launch our new models with higher and advanced autonomous driving capability, but also leveraging our smart cockpits and also localized our VLA capability, X Pancars will definitely bring to you a completely new experience because our target of the company has always been democratizing high end technology. Moderator00:47:27We will bring benefits to all of the people and hope to hope that everyone can get access to this technology, one day and as soon as possible. And we believe that this new Turing chip can help us, to do that. Thank you. Ming Hsun LeeManaging Director - Head of Greater China Auto research at Bank of America00:47:42Thank you. That's all my question. Operator00:47:47Your next question comes from Pingyue Wu with SciTech Securities. Pingyue WuAnalyst at CITIC Securities Company00:48:42Thank you for taking my question. And my first question is about Mona. Mona, I'm looking forward to the release of Mona Max. And what is the rule of Mona series in our strategy? And what percentage share of Mona Max is our target? Pingyue WuAnalyst at CITIC Securities Company00:49:01Thank you. Moderator00:50:18Thank you for the question. Now this is definitely a question that we're going to explore. We're also curious about that as well because when you look at the current market, when it comes to the market segment of RMB 150,000, there is no real implementation of end to end large models or computing power of 500 tops and above. So these available cars are not the so called full performance models. So we are very excited about Mona and we are very curious about its penetration rate in the market. Moderator00:50:46I definitely have very high hopes for it because of our capability. And when you look at the across the industry, even for cars between 150,000 to 200,000, currently, there's very, very rare so called full performance version available in the market. So what is the penetration rate going to be, 50%, seventy %? We don't know. And but we are curious, and we'll try our best to achieve the maximum amount. Moderator00:51:12Thank you. And also regarding the part of your question that is about our M03 and the Mona series. Obviously, M03 was our first model of the whole Mona series. And in 2026, we can expect to see more models from this series. And Mona as a series, it really caters for young people's taste. Moderator00:52:25It needs to look cool and beautiful, provide this emotional value and connection with younger consumers. So we definitely can cater to that. We believe that after next year, you will be able to see the full potential of this series and it's going to be very impactful across the industry. Thank you. Pingyue WuAnalyst at CITIC Securities Company00:53:03And my second question is about the research and development investment. And for 2025, to what percentage of the R and D expense will be allocated to AI related areas or to what or how much to the increase of the R and D expense will be allocated to AI related areas? Thank you. Jiaming WuVice President of Finance & Accounting at XPeng00:53:35Thank you. This is James. So I'll answer your question regarding the overall R and D expenses for this year. So if you look at our total R and D expenses in 2024, it's around RMB6.5 billion. In 2025, we have guided around RMB8.5 billion of full year R and D expense, and this remains unchanged. Jiaming WuVice President of Finance & Accounting at XPeng00:53:59I would say the increased R and D expenses will a good amount of that will be spent on AI related activities, and that would primarily help us to improve our computational capability on a cloud basis. That will boast, as Xiaopeng mentioned earlier, be applied on the AI vehicle autonomous driving training as well as humanoid robot line as well. Obviously, there are other areas that we will continue to invest include smart cockpit equipped with local VLA features that will allow us to increase our capability on multi language voice command interaction function as well. And we should be able to also personalize our customer experience with more enhanced capability. Other than AI, obviously, we will continue to invest on a vehicle basis. Jiaming WuVice President of Finance & Accounting at XPeng00:54:57As you know, we will have additional vehicle models that will be launched this year and into 2026 as well to enhance our product portfolio and that will help us to complete our portfolio in the long term. Pingyue WuAnalyst at CITIC Securities Company00:55:15Your Operator00:55:22next question comes from Bin Wang with Deutsche Bank. Bin WangVP - Investment Banking at Deutsche Bank00:55:54Can you elaborate what's probably FX impact? Thank you. Jiaming WuVice President of Finance & Accounting at XPeng00:56:00Hey, Bin. This is James. So let me clarify. So in the first quarter, we did receive some level of let's say regulatory subsidies as well as tax rebates, tax handling fees, refunds things like that. The recognition of those revenues is based on the actual receipt of the cash proceeds, which occurred in the first quarter. Jiaming WuVice President of Finance & Accounting at XPeng00:56:30Now this is in the nature of, I would say, cash collections into the next couple of quarters. I'm not sure we'll continue to be benefited from this type of revenue recognitions. So that is on the other income side. You also asked a question about the FX movement in the first quarter. This is primarily driven by our business in Europe. Jiaming WuVice President of Finance & Accounting at XPeng00:56:57We have a pretty sizable, I would say, deliveries. We actually delivered more than 10,000 units in Europe over the course of last year. And we are exposed to euro from a revenue perspective. The strength in euro in the first quarter resulted in a portion of FX gain in the first quarter. But we've seen that to circle back a little bit in the recent months in April and May. Jiaming WuVice President of Finance & Accounting at XPeng00:57:26But we'll continue to monitor that exposure and be able to control our exposure to euro and not to ensure that FX impact through our exposure is not a surprise going forward. Thank you. Bin WangVP - Investment Banking at Deutsche Bank00:57:59The second question is about the second quarter ASP margin guidance. It seems that you have a better product mix in the second quarter because you have a smaller proportion from Molar M03. Can you provide guidance for the second quarter ASP and gross margin? Thank you. Jiaming WuVice President of Finance & Accounting at XPeng00:58:17Sure. This is James again. From a gross margin perspective, so first of all, I think we've observed we have achieved a seven consecutive months vehicle margin improvement. This is primarily due to our cost reduction efforts as well as achievement of certain levels of economies of scale. And then looking into Q2 and beyond, what I would say is there are still several areas we see that can help us further improve our vehicle margin. Jiaming WuVice President of Finance & Accounting at XPeng00:58:51The first is continue the product mix, as you mentioned, as we introduce new models, even with the model year changes on G6 and G9, we've seen healthier margin compared to the old models. And this in line will also help us to further higher our average sales price. What I would say is the ASP you've seen in first quarter is probably the lowest throughout the year. We will continue to sell better product mix to help us increase average sales price in the following quarters into 2025. The other thing that we continue to see is the material cost reduction through our supply chain optimization. Jiaming WuVice President of Finance & Accounting at XPeng00:59:37And then lastly, based on the volume projection and higher volume potentials in the third and fourth quarter, we should be able to achieve higher scale, which will help us to lower allocations and improve vehicle margin as well. So with all of that, we are pretty confident at this point that going into second half and into Q4, we believe that our total company gross margin should be able to get close to the high teens level to support us eventually achieve profitability in Q4 as we communicated earlier. Thank you. Bin WangVP - Investment Banking at Deutsche Bank01:00:21Thank you very much. Your Operator01:00:25next question comes from Zhao Yi Lei with Jefferies. Xiaoyi LeiAnalyst at Jefferies01:00:53My question is regarding the humanoid robots. We noticed that Iron has received a lot of attention at the Shanghai Auto Show. How are we going to leverage our existing know how from autonomous driving to robotics? What are the advantages of our products? And also, do we have a specific goal for the mass production of humanoid robot products? Xiaoyi LeiAnalyst at Jefferies01:01:22Thank you. Moderator01:02:37Thank you. So basically, robots or robotics robots development, they are operating as an independent center within the company, but it will leverage our overall in house full stack R and D capability. For example, the EEA of our robots are being developed by the EEA team of autonomous driving of our car department and also the joints within the humanoid robots are being developed by our powertrain team at XPank Motors And also the other parts, for example, the spinal cord of humanoid robot, the cerebellum, the cerebellum, which is the larger brain of the humanoid robot. I mean, everything combined is being developed by both the robotic team, but and also our autonomous driving, intelligent driving team. So I would say well, in addition to that, also our chips, you know, we leverage the chip capability when it comes to developing our iron or humanoid robots. Moderator01:03:29So I would say 70% of the development among our humanoid robots are coming from the same source as autonomous driving, our cars. Now, obviously, overall, these are two different products. They have different matrix. And so they do have different differences when it comes to their capabilities and features and form factors. So there are differences. Moderator01:04:46I think Xpeng is very different from other humanoid robots or robotics company. First of all, we are data driven. We redefine how we should build a humanoid robot. Also, have chips that we are developing in house. The operating system, we can develop in house. Moderator01:05:01And we also have full stack self development capability of our hardware and software. From that point of view, we are really guided by a super strong coupling capability to do things, especially when it comes to developing new products such as humanoid robot. So we expect to actually by 2026 going into a certain percentage of mass production capacity and can quickly going into can quickly enter a stage of OTA iteration. We also expect to actually bring forth some very surprising and brand new innovative products to the market, which will look very different from what we can see right now available in the market. Thank you. Xiaoyi LeiAnalyst at Jefferies01:05:43Thank you. That's very helpful. Operator01:05:47Your next question comes from Lu Jia with Jia LouAssociate Director at Bank of China International(BOCI)01:06:23My first question is regarding the vehicle margin in Q1. As we see that vehicle margin is negatively impacted by some inventory provision and the loss on purchase commitment related to some old models. Wondering if excluding these, what our core vehicle margin comes in, in future, if this impact will persist. Jiaming WuVice President of Finance & Accounting at XPeng01:06:59So we will answer your first question first. Thank you. Jia LouAssociate Director at Bank of China International(BOCI)01:07:03Okay. Jiaming WuVice President of Finance & Accounting at XPeng01:07:05This is James. So yes, we do recognize some level of purchase commitments as we change some of our models. One of the things you probably have from the media is that we have reviewed the very next generation of P7, which outlook design has received very well feedback from the market. So that's part of the recognition that we have done in the first quarter around the current generation of P7. We also have recently launched multi year changes for P6 and G9. Jiaming WuVice President of Finance & Accounting at XPeng01:07:47These have been included in the purchase commitments as well. Overall, I would say the impact of these in the scheme of things is relatively small. It doesn't change the overall trend of our margin improvement for the past seven consecutive months. What I would say is looking into the next couple of quarters in 2025, I wouldn't expect the purchase commitments related to our model changes is going to be significant. So you can take that as in your consideration. Jiaming WuVice President of Finance & Accounting at XPeng01:08:30What I would focus is, as mentioned earlier, our vehicle margin, given our continued cost reduction, continued climbing of higher economy of scale as well as the product mix improvement, we forecast vehicle margin to steady growth in the following quarters in 2025. Thank you. Jia LouAssociate Director at Bank of China International(BOCI)01:08:53Thank you. So my second question is that, looking forward into second half of the year, we will go upscale again by launching more high priced models. How management to get prepared for our premiumization? Thank you. Moderator01:11:47Thank you for the question. This is Xiaopeng. When it comes to our targeted market segment, I would say our current lineup basically feature around RMB 100,000 to RMB 400,000, in which Mona is around RMB 100,000 to 200,000 RMB. But basically across RMB 180,000 to RMB 500,000 will all be our target market segment. So starting from Q3 going into 2026, you can expect to actually see a lot of our new product launch that actually have brand new capabilities across not only the exterior, the design of the car, but also the smart cockpit and overall autonomous driving capability. Moderator01:12:33And people will be surprised. And I think a lot of people are going to really love our new launches. And so, for example, as you can see from our brand new P7 and also going which will be launched in q three, we are going to actually integrate new capabilities when it comes to the whole vehicle, the powertrain, architecture, the smart cockpit, and also the craftsmanship. I think all of these areas are something that we're going to focus on in the coming three years. And we believe such an improvement and overhaul of our capability being reflected in our lineup will showcase how great a company XPeng really is. Moderator01:13:18Also, from our past performance and recent months and quarters, can also see that these improvement have been well accepted by the market. And we believe that no matter what market price segments that we're targeting in, we are very confident of going into at least the top three, if not the top one, best selling models. In the future, we also are going to launch not only BEV models, but also super electric or dual energy vehicles as well. So we're very confident going into a premium market segment. Thank you. Operator01:13:56Your next question comes from Nick Lei with JPMorgan. Nick LaiAnalyst at JPMorgan Chase01:14:33My first question is pretty simple. At recent Shine Auto Show, we saw quite a few foreign brands, in particular from Japan, it's called Total Honda Nissan launching what they call in China for China with localized supplier local cost and very competitive price. And we spoke to Total Honda in the past few days and they indicated that in China in the next few years they are going to launch a few more such products. So I'm curious to understand from Xiaopeng's standpoint, how should we see the competition dynamic moving from here? Moderator01:16:37Thank you. Yes, we also observed the same trends from the market. I think competition are getting more and more aggressive from not only domestically but also internationally as well. I think this is something that we will continue to see and it's something that is destined to happen. But we're very firm on our position, which is that technology company sorry, car makers will need to have their technological capability in order to win in such a competition. Moderator01:17:05And there will be more and more impact on the market when you have a more powerful technological element, whereas your manufacturing capability or capacity will matter less and less. And also, trend that I want to highlight here is that automakers are going to sort of convert from an integrated R and D format to a model of maybe a single direction, full stack R and D of all resources to multi aspect fusion integrated r and d capability. And I think it will take time to happen, but we are pretty sure that it's going to take place. So ultimately, no matter how good your sales and marketing teams are doing, you need to be able to deliver the products that are popular and that resonates with the customers and fulfill user demands. So we're very happy to see that a lot of companies are changing their traditional way of doing things. Moderator01:18:05We are learning from them. We believe that they are learning something from us as well. And I think during this process, we also are able to change ourselves into, you know, the full stack R and D kind of way of doing research and development to a fusion integrated R and D ecosystem, entering a matrix of different R and D aspects. We believe that it will allow us to become even stronger technologically. And by that time, integrated companies with only integrated R and D capability are going to struggle, especially in the mid to long term competition? Moderator01:18:42Thank you. Nick LaiAnalyst at JPMorgan Chase01:19:06My second question is really quick update on our partnership with VW, We sold major models on VW as China auto show. And any very quick update on new milestone that Chairman can share with us? Thanks. Charles ZhangVice President of Corporate Finance & Investments at XPeng01:19:21Nick, it's Charles. I think the collaboration with Volkswagen has progressing at a very fast speed. And so far, we meet every milestone, and we are currently probably less than one year to SOP of some of our products. And yes, as you rightly pointed out, I think that our partner, Volkswagen, unveiled some of the models, for example, one model based on our G9 platform. And also there are multiple models that will be based on the EE architecture that we are jointly developing. Charles ZhangVice President of Corporate Finance & Investments at XPeng01:19:58So I think that all these models will start to come to market starting from early next year. So, so far, I think that I think the order we are meeting all the milestones. And I think looking forward, I think that we continue we'll work with our partner to jointly develop more products. And also, we are also exploring potential new opportunities that can bring win win value to our partnership. Operator01:20:33Thank you. That does conclude our question and answer session. Now I'd like to turn over the call to the company for closing remarks. Alex XieHead - IR & Capital Markets at XPeng01:20:41Thank you once again for joining us today. If you have further questions, please feel free to contact Investor Relations through the contact information provided on our website or the Pearson Financial Communications. Operator01:20:54This concludes today's conference call. You may now disconnect your line. Thank you.Read moreParticipantsExecutivesAlex XieHead - IR & Capital MarketsJiaming WuVice President of Finance & AccountingBrian Hongdi GuVice Chairman and Co-PresidentCharles ZhangVice President of Corporate Finance & InvestmentsAnalystsModeratorTim HsiaoAnalyst at Morgan StanleyMing Hsun LeeManaging Director - Head of Greater China Auto research at Bank of AmericaPingyue WuAnalyst at CITIC Securities CompanyBin WangVP - Investment Banking at Deutsche BankXiaoyi LeiAnalyst at JefferiesJia LouAssociate Director at Bank of China International(BOCI)Nick LaiAnalyst at JPMorgan ChasePowered by