The new offroad vehicle is capable of 670 hp and has a 1,200 km battery range.
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Monthly Archive: March 2023
XPeng revs up for comeback after ending 2022 in the slow lane
XPeng forecast its deliveries would drop about 46% in the first quarter, but expects to rebound in the second half with a steady stream of new product launches. | XPeng US | XPeng HK
(Image credit: CnEVPost)
This article by Trevor Mo was first published in The Bamboo Works, which provides news on Chinese companies listed in Hong Kong and the United States, with a strong focus on mid-cap and also pre-IPO companies.
Key Takeaways:
- Former highflyer XPeng's electric vehicle deliveries grew just 23% last year, down from the triple-digit growth in the previous two years
- Management says things will improve this year, but first the company must survive a bloody price war throttling China's EV sector
Last year was a tough one for former electric vehicle (EV) highflyer XPeng Inc. (XPEV.US, 9868.HK), which stumbled badly in the second half of the year on a series of major missteps. But investors seem to be buying into the company's newly detailed comeback story, driving up its valuation ratios past its top two rivals in the days after its latest results announcement.
Only time will tell if the rally is justified, following a dismal 2022 that XPeng would probably rather forget. In the race for buyers in China's ultra-competitive electric vehicle (EV) market, XPeng spent last year falling further behind its two main rivals, Li Auto (LI.US; 2015.HK) and NIO (NIO.US; 9866.HK), as its losses also ballooned.
XPeng's revenue rose by a modest 28% to 27 billion yuan ($3.9 billion) for all 2022, according to its latest earnings report issued earlier this month. Its vehicle deliveries for the year rose by a similar 23% to 120,757 units, slowing sharply from the triple-digit growth in the previous two years. The company's net loss nearly doubled to 9 billion yuan, despite a drop in both sales and marketing and R&D expenses.
The annual slowdown covered up fourth-quarter results that looked far worse as the company rapidly lost momentum in the second half of the year. Its revenue fell 40% year-on-year during the quarter to 5.14 billion yuan, as its vehicle sales tumbled by an even larger 47%.
XPeng's vehicle deliveries for the year put it behind Li Auto and NIO, which delivered 133,246 and 122,486 units in 2022, respectively, according to their latest annual reports. XPeng fell to third in the race among that trio, all venture-funded startups, after leading the other two in 2021 with 98,155 EV deliveries, versus 90,500 for Li Auto and 91,400 for NIO.
XPeng's reversal of fortune owed to a series of missteps. The biggest was a sort of “identity crisis” for its flagship product, its midsize G9 SUV, which launched last September. The G9 was sold as a series with a range of prices from as little as 309,900 yuan to as much as 469,999 yuan, based on different configurations, such as driving range and software capability.
Such a strategy was meant to impress customers by offering a wide range of options. But it failed to make a splash, and the G9 sold a dismal 6,189 units in the final quarter of last year – a far cry from the 35,000 units XPeng had aimed to deliver by the end of 2022.
XPeng is grappling with a lack of consistency in its marketing strategy, said Wang Cun, an analyst with the China Automobile Dealers Association (CADA). "Its G9 models seek to target high-end customers with two of its largest competitors – NIO and Li Auto – in mind. But it definitely has yet to build up a high-end brand awareness among customers," said Wang.
Comeback brewing?
Despite the poor performance, investors greeted XPeng's latest earnings with enthusiasm. The company's shares ended up 6% the day of the announcement, and continued gaining in the following days. Its Hong Kong close of HK$9.62 last Friday was 15% higher than where it traded before its earnings release on March 17.
That rally lifted XPeng's shares to a price to sales (P/S) ratio to just over 4 times, ahead of NIO and Li Auto, at 2 and 3.37 times, respectively. Investors may have been encouraged by XPeng Chairman and CEO He Xiaopeng's positive outlook for 2023 after the difficulties in 2022.
"I believe XPeng is approaching an inflection point," said He, predicting a comeback for the company this year. "As we have clearly identified what our goals are and what our strengths and weaknesses are, we're now building recovery momentum in our sales and market share expansion."
He said XPeng had implemented a series of strategy adjustments to help regain its previous momentum. Central to that is an ongoing company restructuring, which began last October after the disappointing G9 rollout.
The restructuring aims to give XPeng a "flatter and more concentrated structure," He said, using a term that often implies layoffs through elimination of middle-management jobs.
But even if it can create a leaner, more efficient company, XPeng's road to recovery will be pocked with obstacles created by external market factors.
Most notably, China's EV market has started to slow considerably after several years of rapid expansion. New-energy vehicle (NEV) sales in China reached 933,000 units in the first two months this year.
That was up just 20.8% year-on-year, marking a sharp slowdown from a near doubling in sales for all of last year, after the expiration of national subsidies for NEV purchases at the end of 2022, according to the latest data from China Association of Automobile Manufactures.
The sharp slowdown touched off a price war that has rapidly heated up. It started with price cuts by Tesla (TSLA.US) late last year, which were quickly followed by nearly all major brands in China. Analysts have warned the price war could spark a long-anticipated consolidation in the Chinese EV industry, wiping out less competitive and smaller players.
XPeng hasn't been spared from the price war's effects, announcing discounts of up to 36,000 yuan for some of its models in late January. But those cuts have yet to translate to greater sales.
The company expects its vehicle deliveries to plummet 45% to 47.9% year-on-year during the current quarter to around 18,000 to 19,000 units, similar to the fourth-quarter decline rate, He said.
He added XPeng expects its deliveries to gradually pick up in the second half of the year with its launch of new models. Among those, the P7i – a new generation sedan to complement its earlier P7 model – started delivery this month. The company will also start shipping a G6 compact SUV in June, and a seven-seat multipurpose vehicle in the second half of the year.
CADA's Wang believes XPeng could stand a chance of catching its rivals, but only if it moves swiftly to rectify some of its missteps. Despite the difficult road ahead, Wang said XPeng is in a relatively good position to survive the current price war, with over 38 billion yuan in cash and short-term investments at the end of 2022.
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Denza N7 expected to get over 30,000 orders before mid-year launch, exec says
Denza will announce the appearance of another SUV N8 in the near future, and Denza D9 MPV will next be sold in other regions including Hong Kong, Macau, Europe.
(Image credit: Denza)
BYD's premium new energy vehicle (NEV) brand Denza began intensive warm-up for the Denza N7 SUV earlier this month, and now an executive has expressed optimism for the model's future sales performance.
Denza N7 has inspired much enthusiasm, and with the announcement of Denza's partnership with French high-end audio brand Devialet on March 22, there were many customers inquiring every day, Zhao Changjiang, general manager of Denza's sales division, said on Weibo yesterday.
Many people want to get the Denza N7 launched as soon as possible, and according to the inquiry volume data, the model is expected to get 30,000 orders before its launch in the middle of the year, Zhao said.
Zhao said in February that the Denza N7 would be released in the first half of this year.
On March 6, Denza unveiled official exterior images of the Denza N7 on Weibo, showing that the model restores much of the design of the brand's concept car INCEPTION, which was unveiled at the Chengdu auto show on August 26, 2022.
On March 9, the Denza N7 appeared in a regulatory filing list, and its key specifications were revealed.
The Denza N7 has a length, width and height of 4,860 mm, 1,935 mm and 1,602 mm respectively, and a wheelbase of 2,940 mm, according to the filing.
The model will be available in a single-motor version as well as a dual-motor version, with the former having a peak motor power of 230 kW and the latter having an additional motor with a peak power of 160 kW.
On December 20 last year, Zhao shared six spy photos of the SUV on Weibo, showing what the model might look like.
In the comments section of that Weibo, Zhao said the SUV aims to capture the market for traditional internal combustion engine cars priced around 400,000 yuan ($58,140).
In addition to mentioning his expectation of orders for the Denza N7 before its launch, Zhao also mentioned on Weibo yesterday that Denza will announce the look of another SUV, the N8, in the near future.
The Denza D9 has already been shown at the Thailand motor show and the MPV will be sold next in other regions including Hong Kong, Macau, and Europe for RMB 600,000-1 million, he said.
($1 = RMB 6.8801)
Regulatory filing: Here are core specs for BYD's Denza brand's new SUV, Denza N7
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Tesla Dashcam Captures Insane Accident Where A Kia Takes Flight On The Freeway
The Tesla that filmed everything was on Autopilot and automatically swerved to avoid the debris.
Tesla rumored to be pushing major Autopilot update in China soon
"Tesla China will soon push a major update to Autopilot," a well-known car blogger wrote on Weibo. | TSLA.US
Tesla's assisted driving software is seen as a mediocre performer in China. Now, a rumor that has inspired a lot of anticipation.
"Tesla China will push a major update to Autopilot soon," auto blogger Zheng Xiaokang, who has 532,000 followers on Weibo, said today.
The blogger, a longtime Tesla China follower, didn't mention any more information, and some speculated in the comments section of the Weibo post that the update might be Tesla's vision-only V11 software.
In 2021, Tesla begins the transition to a vision-only Tesla Vision by removing radar from the Model 3 and Model Y, followed by the Model S and Model X in 2022.
On the Model 3 page of its China website, Tesla says the Tesla Vision processing system detects nearby vehicles to reduce the risk of collisions and assists in parking.
With a 360-degree field of view from the vehicle's front, side and rear cameras, the system has powerful vision processing capabilities and can detect distances of up to 250 meters, according to the text on the page.
Tesla has a factory in Shanghai that produces the Model 3 and Model Y.
Today, in most parts of the world, the Model 3 and Model Y are already based on the Tesla Vision solution, which relies only on cameras. But both models currently being delivered by Tesla in China still come with radar.
Earlier this month, multiple regulatory filings revealed that Tesla declared the Model Y without radar in China, which may mean that the SUV may be the first Tesla model to remove radar in China.
Tesla is one of the world's most capable automakers in terms of autonomous driving, though its assisted driving software in China pales in comparison to some of its local peers.
Several local car companies, including XPeng (NYSE: XPEV) and NIO (NYSE: NIO), are fast-tracking testing of their advanced assisted driving software and are getting many positive reviews on social media.
On March 16, XPeng announced that its P5 sedan will receive its seventh vehicle OTA upgrade, which will make its Tesla FSD-like City Navigation Guided Pilot (City NGP) feature available in Shenzhen after Guangzhou.
City NGP can achieve up to 90 percent of the efficiency of a human driver and can easily handle heavy traffic during peak commuting hours and complex road conditions, XPeng said.
At the end of last month, NIO began allowing owners of all its NT 2.0 platform vehicles to apply for a trial of NOP (Navigate on Pilot) Plus assisted driving software, which enables a point-to-point assisted driving experience on highways and urban expressway scenarios.
NIO begins allowing all NT 2.0 models to trial NOP+ assisted driving software
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Ram Is Working On An Electric Mid-Size Pickup Truck: Report
Dealers were shown a concept vehicle similar to the Ram 1500 Revolution.
Germany–EU Spat Over E-Fuels Ends Amicably
E-fuels have been at the heart of a dispute between Germany and the European Commission but it seems the problem has been solved.
Ford Vows EV Price Competition While Cupra Ponders US Sales
Ford says it plans to bring the heat in its battle for EV dominance with Tesla while Cupra is said to be eyeing the US market.
Electric Vehicle Range Anxiety: How Much Of A Problem Is It? How To Deal With It
Most people considering an electric vehicle are most worried about running out of charge and being stranded. They are also worried about where they can charge on long trips, how long charging takes, and how much will it slow them down on those cross-country trips. Most EV owners do 95% of their charging at home […]
Chery’s NEV unit cuts vehicle prices by up to 10%
In January-February, Chery's NEV sales were 13,293 units, down 57.6 percent from 31,367 units in the same period last year.
(Image credit: Chery New Energy)
Chinese auto giant Chery's new energy vehicle (NEV) division has slashed the prices of several models, becoming the latest car company to do so.
Chery New Energy announced today that official guide prices for three of its NEV models has been cut by up to 9,000 yuan ($1,310) starting at 00:00 on March 27.
The reduction covers the QQ Ice Cream, Little Ant and Wujie Pro, with the Little Ant's 408km range seeing an RMB 9,000, or 8.74 percent, price cut.
The QQ Ice Cream priced at RMB 39,900 saw a price reduction of RMB 4,000, or 10 percent.
Following this reduction, the QQ Ice Cream's latest starting price range is RMB 35,900 to RMB 45,900, the Little Ant is RMB 64,999 to RMB 94,000, and the Wujie Pro is RMB 84,900 to RMB 110,900.
This is due to the global price correction of new energy materials and the company's cost control and supply chain management capabilities, Chery New Energy said in an announcement.
The price of lithium carbonate, a key raw material for batteries, has fallen sharply in the past few months, with the current price having dropped about 50 percent from its high point last November.
As of March 24, the average price of battery-grade lithium carbonate in China was RMB 277,500 per ton and industrial-grade lithium carbonate was RMB 235,000 per ton, according to data from Mysteel monitored by CnEVPost.
While Chery New Energy attributed the price cuts to lower raw material prices, the recent price war in the Chinese auto industry and its weak performance so far this year may be the bigger reasons.
After Tesla cut prices earlier in the year, several NEV makers followed suit. Earlier this month, multiple traditional internal combustion engine automakers launched price wars with steep discounts.
These moves have increased the consumer's wait-and-see attitude toward car purchases and disrupted the industry, and last week, the China Association of Automobile Manufacturers (CAAM) called on all parties to help return the industry to normalcy.
For Chery, its performance at the beginning of the year was weak.
In January-February, Chery's NEV sales were 13,293 units, down 57.6 percent from 31,367 units a year earlier, according to data from the China Passenger Car Association (CPCA) monitored by CnEVPost.
($1 = RMB 6.8819)
CAAM calls for return to normal order in China's auto industry as price war disrupts sector
| Model | Version | Previous Price (RMB) | Latest Price | Change | Change % |
|---|---|---|---|---|---|
| QQ Ice Cream | 120 km Milkshake | 39,900 | 35,900 | -4,000 | -10.03% |
| QQ Ice Cream | 120 km Cone | 43,900 | 39,900 | -4,000 | -9.11% |
| QQ Ice Cream | 170 km Sundae | 49,900 | 45,900 | -4000 | -8.02% |
| Little Ant | 251 km Hot Love | 69,999 | 64,999 | -5,000 | -7.14% |
| Little Ant | 301 km True Love Plus | 82,999 | 77,999 | -5,000 | -6.02% |
| Little Ant | 301 km Half Sugar | 82,900 | 76,900 | -6000 | -7.24% |
| Little Ant | 408 km Full Sugar | 103,000 | 94,000 | -9,000 | -8.74% |
| Wujie Pro | 301 km Moshou | 89,900 | 84,900 | -5,000 | -5.56% |
| Wujie Pro | 301 km Lingshou | 94,900 | 89,900 | -5,000 | -5.27% |
| Wujie Pro | 301 km Shenshou | 99,900 | 94,900 | -5000 | -5.01% |
| Wujie Pro | 408 km Moshou | 105,900 | 100,900 | -5,000 | -4.72% |
| Wujie Pro | 408 km Shenshou | 115,900 | 110,900 | -5,000 | -4.31% |
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