Xpeng set to enter ‘strong production cycle’, says CEO of Chinese startup NEV

(Yicai) Aug. 21 — Xpeng Motors is set to enter a “strong production cycle” with the launch of its first mid-range model under the Mona brand, according to the president and CEO of the Chinese new-energy vehicle start-up.

“With a powerful product cycle and more effective marketing, the technological advantages we have accumulated over a long period of time and the breakthroughs we have achieved in artificial intelligence will be transformed into sales growth in China and the international market,” He Xiaopeng said in the Guangzhou-based company’s half-year profit report released yesterday.

The Mona M03 sedan, which starts at CNY135,900 ($19,050), will hit the Chinese market later this month. According to He, Xpeng has received more pre-orders for the M03 than expected. In addition, Xpeng will also release a series of upgraded versions of existing vehicle models, starting with the P7 Plus.

As he noted during the financial results conference call, the new models will be sold in China and overseas through a stronger market system and will bring sustainable sales growth.

Xpeng delivered 30,207 vehicles in the second quarter, up more than 30 percent from a year earlier. The automaker expects deliveries of 41,000 to 45,000 in the third quarter, up 2.5 percent to 12.5 percent from a year earlier, He predicted.

He added that he is confident that Xpeng will see shipments grow in the third and fourth quarters on a quarterly basis, and expects to achieve a new record in the last quarter of the year.

Xpeng’s net loss more than halved to CNY1.3 billion ($179.5 million) in the three months ended June 30 from a year earlier, and its gross profit margin widened to 14 percent from minus 3.9 percent in the period, according to an earnings report. Revenue rose 60 percent to CNY8.1 billion ($1.1 billion).

“Thanks to cost reductions through technical improvements and revenue from technical cooperation under our strategic partnership with Volkswagen, our gross profit margin further improved in the second quarter,” said Brian Gu, honorary vice president and co-president of Xpeng.

On July 22, Xpeng announced that it had signed an agreement with Volkswagen to jointly develop an industry-leading electrical/electronic architecture for the German automotive giant’s China Main Platform and Modular Electric Drive Matrix.

Overseas sales began to contribute to Xpeng’s growth as they accounted for more than 10 percent of total sales from January to July for the first time in history.

Xpeng, which is already present in 30 countries and regions through local dealers and more than 70 stand-alone sales outlets, plans to enter many right-hand drive markets such as Australia, the UK and other Southeast Asian countries, and double the number of its overseas sales outlets by the end of the year, according to He.

Editors: Tang Shihua, Futura Costaglione