Shanghai (ZXZC)- In the fourth quarter of 2020, XPeng Inc. (XPeng) delivered 12,964 new vehicles, which not only surged 302.9% year on year, but also hit a new record high, He Xiaopeng, Co-founder, Chairman and CEO of XPeng, said at the earnings conference call after the company released its financial results for the fourth quarter (Q4) and the fiscal year of 2020.

Photo credit: XPeng

He Xiaopeng also noted vehicles deliveries for the full year of 2020 leapt by 112.5% to 27,041 units. Spurred by the robust delivery growth, the company saw its revenue in 2020 zoom up 151.8% to around 5.844 billion yuan ($895.7 million). Notably, XPeng for the first time gained a positive full year gross margin, marking a significant milestone for the company.

For the first quarter of 2021, XPeng expects its smart EV deliveries to reach roughly 12,500 units and total revenue to be around 2.6 billion yuan ($399.116 million).

One of the main contributing factors to the high growth in deliveries and revenues should be its unique strategy for auto intelligentization.

The company moves much ahead of many other startups regarding the scale application of self-developed autonomous driving technologies. XPeng released in Jan. the first OTA (over-the-air) of XPILOT 3.0, its full-stack in-house-developed automotive driving system, which has become a core selling point of XPeng's vehicles.

As a main part of the XPILOT 3.0, NGP (Navigation Guided Pilot), the company's navigation-assisted highway autonomous driving solution, has been activated in around 20% of all P7s delivered and has assisted customers in driving for more than 1.3 million kilometers by the end of February. 

XPeng's NGP; photo credit: XPeng

At the conference call, He Xiaopeng also unveiled an exciting figure as a sign that XPeng's smart software is being frequently used by consumers. In February, the NGP-powered mileage penetration rate, which refers to the mileage assisted by the NGP as a percentage of the drivable mileage of NGP, surpassed 50% amongst the P7s that have activated the NGP.

“With the continuous advancements in our autonomous driving capabilities, we're confident that autonomous driving features will be a key consideration of our customers' purchasing decisions,” said He Xiaopeng.

The EV manufacturer plans to release multiple OTA updates of XPILOT 3.0 this year, including memory parking and an improved version of the NGP, to enhance vehicles' safety, functionality and performance.

Moreover, XPeng will also begin later this month the NGP expedition from Guangzhou to Beijing to offer customers the disruptive experience of its cutting-edge autonomous driving system.

Pricing strategy will vary with the iteration and upgrades of technical products. With newer generations of XPILOT to be rolled out, XPeng will increase the prices of higher-level versions of the autopilot system, said He Xiaopeng. However, the payment method—whether subscription or one-off payment model—will depend on customers' feedback and the company's overall strategy, he added.

Another eye-catching product is XPeng's third production model to be announced in the second quarter of 2021. According to He Xiaopeng, the yet-to-be-launched model will be the world's first mass-produced smart EV armed with LIDAR. The vehicle is expected to help the auto industry speed up popularization of autonomous driving technologies in China.

In addition, leveraging the company's visual-based perception capability supported by LIDAR, XPeng is ready to launch XPILOT 3.5, which comes with NGP for major urban roads. The EV maker also plans to roll out XPILOT 4.0 that rides on its next-generation autonomous driving hardware and software platform to be deployed on XPeng's fourth model, which is expected for launch in 2022.

The aforesaid achievements and planning are just small part of XPeng's efforts to lead the technology innovation of smart EVs with its full-stack self-developed technical route. For the year of 2021, XPeng will be dedicated to providing consumers with smarter and more differentiated products through fast software and hardware iteration and technology innovation.

At the same time, XPeng expects to see more revenue from the software of XPILOT. “In the future, all new models launched by XPeng will be equipped with latest version and we plan to remove all of the older versions,” said He Xiaopeng, “With the advancement of our software and technology and the future reduction in cost of these hardware preparations, we believe that in the future all new vehicles launched by XPeng will carry not only the hardware that is able to support newer versions of XPILOT, but also foresee more income from the software of XPILOT.”

Autonomous driving is also a focus for XPeng's investment for 2021. According to He Xiaopeng, the startup is going to significantly increase R&D spending this year, mainly focusing on the fields related to autonomous driving, including the software upgrade, the data, the computing, the internationalization of autonomous driving and next-generation self-driving technologies.

To strengthen its market presence and address diversified customer demands, XPeng has prepared a slew of new products for 2021, including an all-new model, refreshed models as well as some special editions of the existing models.

The company expects to start delivering the P7 Wing edition, which made its debut at the Auto Guangzhou 2020 in last November, later this month. Targeting the premium coupe segment, the edition features wing doors that are usually seen on supercars and comes standard with the XPILOT 3.0 system.

XPeng's LFP battery-powered P7; photo credit: XPeng

XPeng announced the LFP (lithium iron phosphate) battery-powered G3 SUVs and P7 sedans on March 3, and intends to begin deliveries in April and May respectively this year. According to Brian Gu, President and Vice Chairman of XPeng, 20% of the P7 sedans orders have LFP battery version.

With the launch of LFP-powered vehicles, the battery supply is a particular concern for investors. “As for the Q2 deliveries of new versions of the P7s and G3s, I think it would be very challenging in terms of battery supplies. But I believe we will face a ramp-up in our battery supply from Q2 and see an evident capacity increase in Q3,” He Xiaopeng said during the Q/A process.

XPeng's long-anticipated third mass-produced model is expected for sale in the second quarter and for delivery in the fourth quarter of 2021. Apart from the aforementioned LIDAR, the new sedan will be fitted with an innovative third-generation smart cockpit and supports XPILOT 3.0.

What's more, the company plans to start delivering the mid-cycle facelift of the G3 SUV in the third quarter.

To increase market share and maintain a high sales growth, XPeng will strive to further expand its sales and service network. He Xiaopeng disclosed that, by the end of 2020, the company had deployed 160 sales stores and 54 service centers across 69 cities in China. Among the 160 sales outlets, 72 are operated by XPeng itself. In 2021, the EV manufacturer aims to increase the number of sales stores to 300 in 110 cities.

XPeng's supercharging station; photo credit: XPeng

To further alleviate charging anxiety and improve charging experience for consumers, XPeng will strengthen its efforts to expand its supercharging network. As of December 2020, there had been 159 XPeng-branded supercharging stations across 54 cities. The number of supercharging stations is expected to exceed 500 by the end of 2021, said He Xiaopeng. Moreover, the company will endeavor to extend its free charging service to 200 cities this year and offer users greater accessibility in a broader range of locations, including highways and airports.

The fast-growing deliveries require XPeng to ramp up its production capacity. He Xiaopeng said the company has completed the upgrade of the assembly lines at its Zhaoqing plant, which targets an annual capacity of 10,000 units this year. Besides, XPeng has started the construction of its Guangzhou manufacturing base, which is anticipated to go into production in the third quarter next year.

XPeng G3i to be exported to Norway; photo credit: XPeng

As the overseas demands for smart EVs are rapidly increasing, XPeng is vigorously advancing its deployment of global business and has made positive progress. For instance, in last December, the company delivered the first batch of the European version G3 in Norway.

In 2021, XPeng will continue to strengthen its capabilities of international operations in areas such as organization, product development, R&D, branding and distribution channels.

As for the strategy on overseas expansion, He Xiaopeng said it would be in similar to that of the domestic market so as to ensure the capabilities in product portfolio, operation and organization for domestic business can be rapidly duplicated and expanded to foreign markets.