To The Moon

Q&A（Question-and-Answer Session）is a session after the company's prepared remarks where institutional investors and analysts ask management questions. In this dialogue, you may find some valuable information that might affect the stock price in the following weeks.

Now let's look at some key points from XPeng Q3 2022 Q&A Session Transcript $XPeng Inc.(XPEV)$ $XPENG-W(09868)$

Q:Now Chairman just mentioned that you are going to change a lot of strategy regarding the management, including branding
and marketing team and can you elaborate more what are going to change in terms of branding strategy and marketing campaign? And what – when can we expect those changes having an impact on underlying demand or volume?

A:We’re actually conducting or in the midst of doing this organizational adjustment with focus on our branding and marketing. Looking back, I mean in the past, our branding and sales and marketing mainly focused on sales with more focus on boosting the sales of our products, but going into the future, we are going to balance different aspects of our branding, marketing and sales with innovative measures, and we plan to actually reduce our spending to boost in the sales, while increasing our spending in marketing. Now, the second thing that is regarding the organization adjustment is that we plan to – we expect to integrate our organization to make it more efficient and effective. And we plan to recruit very high-quality talent from different industries in order to boost our sales and marketing efficiency and we aim to launch a series of measures in order to tackle different challenges as well as boost our effectiveness in order to align our product portfolio as well as to achieve higher customer satisfaction rate, while adjusting the customer demand.

Now, we are talking about our near-term strategy for these organizational changes in the coming 15 months, but we believe that in the long run, we will continue such adjustment in order to achieve our mid to long-term goal. Thank you. And just allow me to add several key points. The first one is that we will have a clearer positioning of our brands and products. And the second thing is that we are aiming for the long game. We are not doing this for the short-term. And the third point is that we are going to be more aggressive and more proactive in our sales and marketing campaigns rather than being rather passive just like in the past. And the fourth and the last point is that we will remain a very customer-oriented and focused. Thank you.

Q:My question is about how to be demand-oriented? And specifically, the first one is what is the real customers’ demand? And secondly, how do we find them? And what will we do in terms of our structure? Yes, that’s my question.

A:Now, there are two basic logics behind the industry of auto-making, especially for our OEMs. The first one is to adopt the theory of bucket, which means that you have to identify your weakest links and also identify your strengths as well. Now, in the past several years, I think not just ourselves, but a lot of our peers have been doing their best to actually identify and also improve their weak links in terms of, for example, safety, product quality, service quality and also cost control as well. We are also doing our best. We are striving to further perfect our service quality as well as our – the design of our products, interior design as well as smart cockpit and other space design as well. So, in the long-term, one of the key competitive strengths is to really identify your goal, I am talking about short-term as well as the long-term goal as well. You have to make sure that you understand the current focus, whether you aim for the short-term or the long run. And the second logic behind our auto-making industry is to define your customer portfolio or your targeted customer goal as well as your original target as well. Now, for the past 2 years to 3 years, XPeng has identified ourselves as a global company in the long run, and we really want to build scale as well. And that is why in the coming 3 years, well, based on which we have made our 3-year plan in the future. And I apologize that today, I won’t be able to disclose further information regarding our future lineup or the market demand in regards to specific car models. However, what I would like to mention is that in the future, autonomous driving or ADAS technology will be the standard configuration in our future products lineup with very consistent performance and very high-quality capabilities across our product. And also that’s our long-term goal to – based on which we will further enhance our technological capability and also do better in cost control so that we can deliver truly cost-competitive, high-quality products to our customers and that will be something that we embody in our next generations of products. Thank you. Regarding the second part of your question, now our current organizational changes is mainly conducted to fulfill two goals or mainly focus on two areas. The first one is to do changes in terms of our product planning, product development and also to have a higher efficiency and effectiveness in implementing our technology in our future products and also to control – well, first of all, to be able to identify true demand and to control our investment in the month that has less value. And that is why we have been invested so heavily in perfecting our, for example, electrical and electronic architecture, our whole vehicle architecture as well as our powertrain and other systems. With those systems and those integrations, we will be able to truly offer end-to-end solutions that are able to deliver high-quality products to our customers. Thank you.

Q:In 2023, we will have launched a new P7 with better configurations. And I think it would cause a rise in the BOM cost. And will we maintain relatively stable GP margin and drives our MSRP, or we want to boost our sales and maybe maintain our price or even lower our price?

A:On P7 next year, yes, we aim to launch the upgraded model to reflect the technology advancements, particularly the ones that you saw already on G9. So, the P7 will have equally advanced autonomous driving architecture, will also have the faster charging capabilities and higher voltage capabilities as well as a number of other upgrades and fixes that will address the – some of the shortcomings people have – we received the feedback on. Benefiting from the platform development actually, since a lot of these advancements are just sharing the modular and platform development, we actually are able to control the cost of the new P7, so to maintain the similar margins of the current version. And also the current – some models of the current version P7 will continue to be selling along with the updated P7. So, it’s actually I would say, the high end or upgraded version of the P7. So, with that, I think we believe we can introduced a much more competitive P7 reflecting the top-of-the-line capabilities that we have in technology, while maintaining the segment price and profitability on the series – the P7 series.

The above Q&A are highlights that are edited for brevity. Click here for the full XPeng Q3 2022 Earnings Call Transcript.​​​​​​​​​

If you want to know more details, you can click here to re-watch the XPeng Q3 2022 Earnings Conference Call