To The Moon

The following $XPeng Inc.(XPEV)$ earnings conference notes by AI tool.

vehicles, electric, charging

vehicles, electric, charging

1. Basic information about the cooperation between Xpeng Motors and Volkswagen

(1) Cooperation mode

Xpeng Motors and Volkswagen jointly build two B-class SUV models based on the Xpeng platform and software. Xpeng provides the platform and software technology, and VW is responsible for the overall engineering R&D, design and manufacturing.

(2) Complementary advantages

The cooperation between the two parties is based on complementary advantages. Volkswagen is very strong in the overall station software and hardware technology and supply chain. Xiaopeng recognizes this and believes that this is a technical cooperation model.

(3) Recognition of technical value

Xiaopeng Motors has the ability to independently develop a total station platform plus software technology, which is very rare in Chinese car factories, and its cooperation with Volkswagen has been recognized by the international market.

(4) Benefits of the cooperation model

Under the whole-site software and hardware cooperation mode, Xiaopeng's platform, electronic and electrical architecture, and upper-layer software interfaces are all unified, and the vehicle interface is also unified, which can improve efficiency and avoid adaptation work and software modification .

(5) Willingness for long-term cooperation

Volkswagen’s investment shows its recognition of the technological value of Xiaopeng Motors. The two parties have found other cooperation opportunities in the G9 development cooperation, and believe that this is a very long-term, complementary and mutually beneficial cooperative relationship.

2. Technology realization and turning point

It is expected that from 2024, Xiaopeng Motors will be able to obtain income from technical services through cooperation with Volkswagen, which is an important turning point for Xiaopeng.

3. Technological belief and speed of qualitative change

Xiaopeng Motors has always adhered to the belief in technology, and the strategic cooperation with Volkswagen is regarded as a turning point in the realization of technology, and the speed of quantitative change to qualitative change is much faster than expected.

Q&A Part：

Q: What benefits and rewards did Xiaopeng Motors obtain in the cooperation? Can you talk about what you have learned in terms of supply chain management? And how to cooperate with the mass and supply chain management capabilities of the public?

A: Xiaopeng Motors said that the cooperation with Volkswagen has brought great benefits to it in terms of supply chain management. Volkswagen is stronger than Xiaopeng in terms of supply chain capabilities, so Xiaopeng can enjoy the cost reduction benefits of Volkswagen's supply chain, and this is a win-win strategy. In addition, Xiaopeng Motors will also share its own technical cost reduction experience with the public to improve the business level of both parties. Through this cooperation, Xpeng Motors believes that it can realize the income from technical services and build it into a sustainable model. Xiaopeng Motors believes that this technology monetization model is different from the traditional platform model, and the value of software is greater. Generally speaking, this kind of cooperation is of great commercial value to Xpeng Motors, and will also bring good benefits to the company and shareholders.

Q: In the cooperation, how much human resources and energy is expected to be invested by Xpeng Motors? In terms of engineering design and manufacturing, Volkswagen is responsible, and Xiaopeng mainly provides technical and platform support, right?

A: Xpeng Motors said that in cooperation with Volkswagen, they are mainly providers of technology and platforms, while Volkswagen is responsible for engineering design and manufacturing. Since the platform software of Xiaopeng Motors has already been mass-produced and can be provided to partners through OTA, Xiaopeng has relatively light investment. Therefore, they do not expect to invest too much human resources and energy in the cooperation in 2024 and 2025. At the same time, Xiaopeng Motors emphasized that their technical service income is very profitable.

Q: In cooperating with Volkswagen, is Xpeng Motors worried about product overlap and competition with Volkswagen? How do you view this issue?

A: Xpeng Motors said that although there may be a certain degree of product overlap and potential competition in the cooperation, they believe that long-term strategic cooperation and commercial value far outweigh these potential competition and overlapping issues. In addition, Xiaopeng pointed out that as one of the largest automobile companies in the world, Volkswagen has rich experience and differentiated design capabilities in electric platforms and multi-brand shared platforms. Therefore, the car models designed by Volkswagen on the basic platform of Xiaopeng will have sufficient differentiation.

Q: As for the business model and pricing, can you introduce the business model and pricing of Xpeng Motors’ recurring technology service in detail, and how the hardware sales service fee of the platform reporter platform and the software sales service fee of Super GP are separated? Priced?

A: I can talk about the business model and pricing. The business model of recurring technical services is based on the different pricing of software and hardware, and it is inconvenient to disclose the magnitude of the corresponding unit. The pricing of the hardware sales service fee of the platform reporter platform and the software sales service fee of Super GP is determined according to the scale and quantity of the entire platform, and the specific number cannot be disclosed.

Q: What is the core difference between Xpeng Motors' latest platform G6 and G9? Will there be a similar cooperation model with other carmakers in the future to share data?

A: The platforms of G6 and G9 are consistent in code and architecture. Compared with G9, G6 optimizes the 3-electric system and improves efficiency. Regarding the data sharing cooperation model, if other entire vehicles use our software system and hardware platform, including the data of the vehicles they sell, we can obtain closed-loop data, which is consistent with the data on our own vehicles. This is a win-win cooperation model, of course we will conduct evaluation and research according to regulatory and privacy regulations.

Q: Regarding the public supply chain project, can you introduce the specific content? In addition, who is in charge of the procurement of parts and components for the two vehicles on the Volkswagen 19 platform?

A: Regarding the Volkswagen supply chain project, it mainly provides procurement of general parts and components, and can also purchase platform-based parts with Volkswagen. As for the purchasing power of the two vehicles of the Volkswagen 19 platform, Volkswagen is responsible for the leading power, including chassis and intelligent driving, and Volkswagen has strong procurement capabilities.

Q: Volkswagen has a strong ability to control and optimize costs. Will it help Xpeng Motors to optimize costs? Is Volkswagen's right to purchase parts and components for the two vehicles on the 19 platform dominant or is Xiaopeng Automobile's own decision-making?

A: Volkswagen has a strong ability in cost control and optimization. After they enter, they will help us optimize the cost of the entire G9 platform. As for the parts procurement rights for the two vehicles of the 19 platform, Volkswagen is responsible for the leading right. They have global procurement capabilities in general parts and components, and we can also enjoy their cost optimization measures.

Q: Regarding the engineering capabilities and differentiation of chassis and brackets, is it provided by Xpeng Motors or by Volkswagen?

A: In terms of engineering capabilities and differentiation in terms of chassis and brackets, we will provide support if changes are required. We hope to improve efficiency and speed to market, and try to avoid major modifications to the chassis and communication electrical interfaces.

Q: Can Xiaopeng Motor adopt the caliber of letting the public endorse in the future, and let consumers increase their attention to g9 products?

A: I think we Chinese people. But I think the g9 platform will be used this time. In fact, it gave us a huge amount of traffic domestically and internationally, I think. It's a very strong boost to our brand. Actually yesterday. After the announcement yesterday, I also held a meeting with our p2 team to talk about how to build such a strong international No. 1 brand with Volkswagen in the United States and take advantage of their advantages , can help us sell the g9 better. In fact, the current sales of the g9 have not met our expectations, but we still do. There are various measures, hoping to increase the amount of g9 again.

Q: Will Volkswagen restrict Xiaopeng Motors’ publicity practices in the cooperation agreement, and will not allow endorsements and other things?

A: That's not true. This is not the case, but I think both parties are very cooperative. Sincerely, I think this is not the case, and there are no restrictions in this regard.

Q: What is the specific form of our cooperation with the public? For example, the type of cooperation, the magnitude of cooperation, etc.

A: The commercial terms are sensitive, and I can’t disclose them, but the overall technology monetization income is very considerable for us, and it will increase greatly starting next year.

Q: Volkswagen's main selling car models are 150,000 to 200,000. Our car models are of high quality. How to increase the number of people entering the store and the winning rate?

A: Volkswagen already has its own platform to support their main selling price segment, but for the B-class SUV model, they chose us. There is no specific plan for the marketing plan on the number of stores entered and the winning rate.

Q: After we cooperate with Volkswagen, will other companies adopt similar cooperation methods? How do we see these ways of collaborating evolving?

A: We are open to cooperation, but we will choose our partners very carefully. For future cooperation methods and evolution, we will choose according to the situation.

Q: The field of intelligent and autonomous driving requires vertical integration capabilities. We have demonstrated advantages in chassis platforms, electronic and electrical architectures, etc. Other suppliers are more helping vehicles adapt to existing platforms and electronic architectures . We will also be very cautious in the choice of external cooperation.

A: Vertical integration is our advantage, and we will deploy this model on our own vehicles. Other suppliers are more about helping the car adapt to existing platforms and electronic architectures.

Q: Does the decision-making power for intelligent hardware rest with the public? Is the decision of the pre-controller on our side?

A: The decision on what hardware to use is on our side, and the engineering solution design and development is on the Volkswagen side. Supply chains are their own, but we respond to their specific needs.

Q: Regarding our software, will it be applied to other vehicle models? Or is it only applied to these new cars we cooperate with?

A: It is also possible to use other vehicles.

Q: This car model is only sold in China. Is there room for expansion?

A: The scope is that these two models cannot be used on other models or JB models. And this car model is only sold in China.

Q: Is it a separate channel or placed in its original channel?

A: It must be the brand of Volkswagen, because this time it is the investment of Volkswagen China, I think. Collaboration is independent of knots. Technical considerations and relays.

Q: Regarding the climbing and delivery of our g6, has this problem been solved?

A: We still maintain the original guidance. I think the original guidance is g6, and it should be a few thousand in July. This target can be increased by several thousand in September, and the target of 15,000 in September remains unchanged.

Q: Can you say a few more words about the solution to this problem?

A: It cannot be said that it is completely solved now. I think it will definitely climb up. It is true that there may be some bottlenecks in some components, but I think. August and September will continue to increase in volume.

Q: In the process of cooperation, what kind of strength does the public contribute?

A: Volkswagen's engineering design, including our car models, are all tuned by Porsche Engineering. On some electronic interfaces, electronic circuits and device architectures are these aspects. I think we have our very strong specialty.

Q: In the cooperation, what are the parts we independently research and develop?

A: I think our current plan for autonomous driving is still the same. By the end of this year, the cost will be reduced by 50% next year. I think these are because our autonomous driving is now platformized. I think our technologies will also be shared with the next generation of our partners, such as l4. In fact, it should be 2026. I hope to realize that the l4l4 platform, I think it should be, we independently developed it. But possible. We also mentioned in the announcement that some other areas of cooperation in the future, including the next-generation electric platform, I think we all have these, and many technologies complement each other, because I think the public is in the field of engineering design. All surfaces, including our cars, are tuned by Porsche Engineering.

Q: In the cooperation, what is the main content of our cooperation with the public?

A: Collaborate on the architecture of some new electronic platforms.

Q: What is the company's future positioning or development path?

A: The positioning of our company is mainly to earn income by launching more innovative products and horizontal cooperation in technology. We believe that intelligence is our core advantage, and we will continue to accelerate the development of intelligence and maintain a leading position. In the next few years, our goal is to become bigger and stronger in the field of intelligence and achieve scale.