In the face of the current financial strategic environment, how does Xpeng Motors think?

Mondo Cars Updated on 2024-01-28

Xpeng Motors was established in Guangzhou in 2015 with a registered capital of 612,631580,000 yuan, which is fully controlled by Guangzhou Orange Line Intelligent Automobile Technology Co., Ltd. In May 2016, Guangzhou Xiaopeng Motors Technology Co., Ltd. was establishedIn 2018, Xpeng Motors was established, and with the company as the main body, it was successfully listed on the New York Stock Exchange and the Hong Kong Stock Exchange in the United States.

As one of China's leading designers and manufacturers of smart electric vehicles, Xpeng Motors integrates cutting-edge Internet and artificial intelligence innovation, and is the only automotive company in China that has independently developed full-stack autonomous driving technology including positioning and high-precision map fusion, sensor fusion, behavior planning, and motion planning, and should use the software in mass-produced vehicles.

Xpeng Motors adheres to full-stack independent research and development of software and core hardware, with a cumulative R&D investment of more than 10 billion yuan and a total of more than 4,000 patent applicationsThis makes Xpeng Motors one of the leading companies in China's new energy vehicle manufacturing, and in December 2022, it became the only new car company selected for the strong foundation project of Chinese auto brands.

In order to optimize operational efficiency and improve product quality, Xpeng Motors has laid out intelligent manufacturing production bases in Zhaoqing, Guangdong and Guangzhou, and Wuhan, Hubei, with a peak annual production capacity of 500,000 vehicles.

In terms of products, Xpeng Motors has delivered nearly 250,000 vehicles since its delivery. Xpeng Motors has a complete product line, covering high, medium and low-end, mainly including pure electric sedans and pure electric SUVsIncluding the ultra-long-range smart coupe Xpeng P7, the versatile and comfortable smart family sedan Xpeng P5, the smart tide urban SUV Xpeng G3i, and the ultra-fast charging full smart SUV Xpeng G9, the cumulative delivery volume exceeded 200,000 units.

1. Analysis of the external environment

Market size China has the world's largest new energy vehicle market, "double carbon" background, low-carbon, environmentally friendly new energy vehicles are very popular, with the formulation of a series of new energy vehicle subsidy policies in China, to a large extent to promote the development of the new energy vehicle industry, China's current new energy vehicle industry has entered a new stage of large-scale and rapid development.

The national subsidy policy for the purchase of new energy vehicles was terminated on December 31, 2022, and the subsidy will no longer be given to vehicles licensed after that. With the cancellation of state subsidies, the purchase cost of new energy vehicles is bound to increase, and as a new energy vehicle company, through price increases to allow consumers to increase the cost of car purchases, or by bearing the subsidy price difference to attract consumers, will have a certain impact on the sales of enterprises.

In addition, although the national subsidy policy has been cancelled, the new energy vehicle purchase tax reduction and exemption policy and parking preferential policies will continue to continue to promote the development of the new energy vehicle industry, which also marks the maturity of the new energy vehicle consumer market and the eventual realization of market-oriented pricing, therefore, the quality and service of products will become an important direction for the future strategic development of new energy vehicle companies.

The existing competitors in the industry are gradually forming the pattern of the new energy vehicle industry, and BYD has maintained a leading position in the industry for many yearsIn 2022, the retail sales of BYD's new energy passenger car manufacturers will reach 1.8 million units, an increase of 208 year-on-year2%, with a market share of 317%, and the second place SAIC-GM-Wuling has a market share of only 78% is the same as the market share of the third-place Tesla China.

The development and growth rate of the new energy vehicle industry is accelerating, the penetration rate is also increasing year by year, the industry competition is intensifying, traditional car companies, new forces in car manufacturing, and cross-border technology companies have participated in the competition, and the profitability of enterprises has been further squeezed, and Xpeng Motors will face more challenges in the future.

The threat of substitutions: currently in terms of substitutes, within the new energy industryXpeng's main threat comes from three routes of mainstream NEV technology: EV (pure electric), PHEV (plug-in hybrid), and EEV (extended range electric).

Xpeng Motors is a pure electric vehicle, which has the advantages of simple structure and low maintenance cost, but has the problem of range anxiety caused by inconvenient charging. The range-extender electric and plug-in hybrids, on the other hand, combine fuel and electric features, so drivers don't have to worry about long-distance travel.

Outside the industry, Xpeng's main customers are young peopleWith the change of consumption concept and the improvement of urban construction, public transportation and car sharing will become an alternative threat to Xpeng Motors in terms of travel mode.

Affected by the epidemic, in the fourth quarter of 2021 and the first half of 2022, there were sharp fluctuations in batteries, and the production capacity of lithium battery chips was limited.

In addition, the continuous change of the first chain in the subdivided field, the list of major automobile companies is also diversifying, in the field of battery business, Xiaopeng Motors is also diversifying the battery businessThe existence of a number of first-class merchants has improved the bargaining power of Xpeng Motors to first-class merchants, which is conducive to Xiaopeng Motors to better optimize product costs.

In the new energy vehicle industry, there are more buyers and pay more attention to product performance, service and quality, and the number of new energy vehicle companies is large, and the products are diversified, and buyers can choose at will. The main range of Xiaopeng Motors is 200,000 yuan, and the competition in this range is rich, and the preferential strength will greatly affect the choice of consumers, and the buyer will be more sensitive to the first, so the buyer's bargaining power is relatively strong.

The explosive growth of the new energy vehicle industry has attracted major brands to join, but due to the unified industry standards set by the country, the entry of potential competitors is highly restrictedAt present, it is mainly divided into the following models: traditional car companies spin off or set up new brands separately, such as Geely's Zeekr Sedan and SAIC's Zhiji Automobile.

New power car companies represented by Weilai, Li and Xiaopeng have risen brands such as Nezha and LeapTechnology companies represented by Huawei participate in brands, such as Wenjie Automobile. Among the above models, traditional car companies have relatively complete industries and sales chains, strong strength, and natural advantages in product cost control.

New power car companies focus on differentiation and attract customers with more flexible selling points and sales methodsTechnology companies have more loyal user fans, and their technology and sales channels are more mature, and the market acceptance is relatively high.

At present, there are not a few potential competitors in China who can participate in the new energy industry through the above models, therefore, Xiaopeng Motors should maintain the existing market share, and strive to increase the market share, and formulate long-term goals and plans.

2. Analysis of internal environment

Solvency is the ability of a company to use its assets to repay long-term and short-term debtsThe analysis of Xpeng Motors' solvency selects three indicators: current ratio, quick ratio and asset-liability ratio.

From a longitudinal analysis of the solvency of Xpeng Motors, the current ratio of Xpeng Motors shows a fluctuating downward trend, and it is generally believed that it is better to maintain the current ratio of a reasonable manufacturer at about 2, and the current ratio in 2018 and 2020 is relatively high, and it has stabilized at about 2 in the past two years.

Xpeng's quick ratio is also generally higher than the stable value of 1, and its short-term solvency is relatively strong, but it is also showing a downward trendThe liquidity of assets has gradually weakened in the short term, and current assets and liquid assets have not been better utilized.

It is generally believed that the asset-liability ratio is between 40% and 60%, and although the asset-liability ratio of Xpeng Motors fluctuates, the value fluctuates in a reasonable range, and the debt repayment ability is strong. From 2020 to September 2022, Xpeng's current ratio and quick ratio are similar to those of NIO, and there is still a gap between Xpeng and Li Auto in terms of solvency.

In terms of debt-to-asset ratioCompared with NIO and Li Auto, Xpeng Motors fluctuates basically the same, and the ratio is slightly lower than that of NIOBut this is less risky for Xpeng's creditors and has a strong ability to pay debts.

The ability of a business to operate refers to the ability of a business to make a profit using all of it. Xpeng Motors analyzes the company's operating capacity through three indicators: accounts receivable turnover ratio, inventory turnover ratio and total asset turnover ratio. A longitudinal analysis of Xpeng's operating capacity shows a fluctuating upward trend in the three indicators of accounts receivable turnover, inventory turnover, and total asset turnover.

The increase in the turnover rate of accounts receivable indicates that the speed of conversion of accounts receivable to current cash is accelerating, and the efficiency of capital use is improvingThe increase in inventory turnover indicates that the inventory management level of Xpeng Motors has improved, and the inventory turnover rate has decreased in the first half of 2022, due to the impact of the epidemic environment on sales.

The total asset turnover ratio fluctuated slightly from 2019 to the first half of 2022 but remained low, indicating that Xpeng Motors' use of all assets for operations was relatively modest. Xpeng Motors' operating capacity has improved steadily.

Horizontal analysis of the operating capabilities of Xpeng MotorsThe accounts receivable turnover rate of Xpeng Motors is much lower than that of Li Auto, and it is also lower than that of NIO, which collects accounts receivable faster and has lower bad debt losses, which is worth learning from Xpeng Motors.

In terms of inventory turnover and total asset turnover, Xpeng Motors is also lower than NIO and Li Auto, but the gap is not too big. Overall, Xpeng's operating capacity is relatively weak among new car companies of the same level, and Xpeng Motors needs to adjust its own operating capacity to improve the company's operating capacity.

Profitability is an important indicator for judging the overall operation of an enterprise. The gross profit margin of sales, net profit margin of sales and net profit margin of total assets are selected to analyze the profitability of Xpeng Motors. A longitudinal analysis of the gross profit margin of Xpeng Motors shows that the gross profit margin will turn from negative to positive in 2020, showing a good upward trend.

In terms of net sales profit, although the gross profit of sales has turned positive, the net profit of sales has been negative, mainly due to the high investment in research and development of Xpeng Motors, and the profit margin of its flagship products is small, and there is a phenomenon of increasing revenue but not increasing profits. Xpeng Motors' net profit margin on total assets has been negative since 2019, although the overall trend has been upward, and Xpeng's profitability is poor.

Horizontal analysis of the profitability of Xpeng Motors, the gross profit of NIO and Li Auto, both new power car companies, is greater than that of Xpeng Motors, mainly because the initial product positioning of Xpeng Motors is a cost-effective model, and the profitability is relatively lowThe main profit** is the Xpeng P7, and the newly launched G9 is expanding into the high-end market, which is conducive to increasing its gross sales margin.

Conclusion

In terms of net sales profit, NIO and XPeng have a large gap compared with Li Auto, due to the high R&D investment of NIO and XPeng. Xpeng Motors should speed up the product layout and improve the profitability of the enterprise.

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