Last night, Xiaopeng Motors (09868) announced the listing price of its latest model, Xiaopeng P7+(186800 to 218800 yuan), and investors gave a strong response. On November 8th, Xiaopeng Motors' Hong Kong stock opened with a sharp increase of 18%.
On the evening of November 7th, consumers' rush buying caused the servers of Xiaopeng Motors to crash. Xiaopeng Motors Chairman He Xiaopeng stated that the server traffic that night was 20 times that of the same period as the listing of MONA M03. As of 24:00 that evening, Xiaopeng officially announced that the P7+bulk order volume had reached 31528 units, breaking all records in Xiaopeng Motors' history.
Interestingly, on November 6th, Xiaopeng Motors showcased the latest technological achievements in multiple fields such as AI intelligent driving, Turing chips, and robotics at its annual AI Technology Day. Xiaopeng claimed that its cloud computing power would reach 10 EFLOPS by 2025, but the servers couldn't even withstand the rush of consumers a day later and crashed.
Previously, the MONA M03, which was launched on August 27th, was also a popular model. According to official data from Xiaopeng, the large order volume exceeded 10000 units in just 52 minutes of its launch. Within 48 hours of listing, the number of orders exceeded 30000 units.
With the release of two explosive car models, Xiaopeng Motors has ushered in a shining moment. However, six months ago, Xiaopeng Motors was still a car company in various crises.
On March 20th, the second largest shareholder Alibaba (09988) further reduced its holdings of 33 million American Depositary Shares (ADS) of Xiaopeng Motors after a reduction in December 2023. The transaction price was between $9.6 and $9.75 per share, lower than the market price and even lower than Volkswagen's offer of approximately $15 per share to acquire 4.99% equity of Xiaopeng Motors in July 2023.
In March, according to the official website of Xiaopeng Motors, the company's two co founders, Xia Heng and He Tao, resigned at the same time and were appointed as lifetime honorary consultants. Xiaopeng Motors has undergone a major internal organizational restructuring since the failure of its G9 debut in 2022, resulting in a loss of 10.38 billion yuan in 2023. Since its listing on the New York Stock Exchange in August 2020, the losses have continued to expand.
Before the launch of MONA M03, Xiaopeng Motors delivered a total of 63173 vehicles from January to July, a year-on-year increase of 20%, but only achieved 23% of the annual delivery target of 280000 vehicles. During the same period, Ideal (02015) delivered 240000 vehicles and NIO (09866) delivered 108000 vehicles, achieving 42.9% and 46.9% of the annual targets respectively, far exceeding Xiaopeng Motors' data.
This once triggered pessimistic expectations in the market for the development prospects of Xiaopeng Motors.
The popularity of MONA M03 saved Xiaopeng Motors' decline in one fell swoop, but for Xiaopeng Motors, this is not a model that can save the company. On the one hand, as an entry-level model, the discounted price of MONA M03 is in the 100000 yuan range, which may be the most fiercely competitive segment of the domestic new energy market with low profit margins. For Xiaopeng, which will lose 10 billion yuan in 2023, it cannot effectively make up for the losses. On the other hand, the models delivered by MONA M03 do not have the high-end intelligent driving function of Xiaopeng Motors, which cannot consolidate the company's core competitiveness for Xiaopeng Motors, which focuses on technology.
The popularity of MONA M03 also highlights a long-standing weakness of Xiaopeng Motors: the supply chain. Amidst the popularity of MONA M03 and the favorable situation that drove other car models during the same period, Xiaopeng delivered a total of 21352 new cars in September, a year-on-year increase of 39% and a month on month increase of 52%. In October, it delivered 23917 new cars, a year-on-year increase of 20% and a month on month increase of 12%.
During interviews, He Xiaopeng consistently stated that the popularity of M03 far exceeded expectations, and the company's delivery has already set records in monthly speed. But as a decade old automotive company, a supply chain that delivers 20000 units per month is not up to par.
A comparable data is the delivery volume of Xiaomi (01810) SU7. In September 2024, the delivery volume of Xiaomi SU7 exceeded 10000 units; In October, the delivery volume of Xiaomi SU7 exceeded 20000 units. And this is just the first model of Xiaomi Auto, which is a new company established for three years.
Xiaopeng Motors is now facing a situation similar to Tesla's: holding a large number of orders while suffering severe losses, and urgently needing a large-scale popular car model to save the company.
The model that saved Tesla back then was the Model 3, and now the model that can completely change Xiaopeng Motors may be the P7+- a model that can only succeed and cannot fail.
Compared to Tesla in the past, Xiaopeng Motors now faces a more hostile market competition environment, with not only new competitors such as NIO and Ideal, but also pressure from traditional automotive giants such as BYD and Geely that have successfully transformed.
Taking Geely's Extreme Krypton brand as an example, the delivery volume of Extreme Krypton with an average price of over 200000 yuan in October was 25049 units, a year-on-year increase of 92%. However, if the M03 priced at 100000 yuan is removed during the same period, the delivery volume of Xiaopeng is only over 10000 units.
Perhaps realizing the supply chain issues of Xiaopeng Motors, He Xiaopeng stated at the P7+press conference that the P7+will be delivered upon its launch. However, on the second day of the official announcement of its listing (November 8th), the latest delivery cycle for P7+has been shown to be 7-10 weeks.
In addition to the supply chain, Xiaopeng actually had many internal problems that needed to be solved and sorted out in the past. These problems cannot be completely solved by just one or two popular products, even though the emergence of popular products provides the best opportunity and buffer for solving these problems.
As a technology focused automotive company, Xiaopeng Motors has always given consumers a lot of expectations in terms of technology, especially in terms of assisted driving technology, which has always been in the first tier in China. Even He Xiaopeng once publicly said, "Xiaopeng crosses the river by feeling the stones, while others touch Xiaopeng.
However, the ultimate criterion for the success of a product and a company is not just technology, but more comprehensive factors. Xiaopeng Motors may be one or two positions ahead of some domestic peers in technology, but its own scale is not large enough.
In a recent interview, He Xiaopeng stated that the logic of relying solely on good scale to achieve higher profits may have been valid in the past, but it is not currently valid. The larger the scale, the better your gross profit margin.
But for Xiaopeng Motors at the current stage, scale is crucial. Xiaopeng Motors must leverage the scale of P7+to solve supply chain problems, address large-scale losses, and solve a wider range of user mental problems. It also needs to truly establish its leading position in assisted driving technology through scale.
Can P7+fulfill the most important mission in the history of Xiaopeng Motors?