Hello, ladies and gentlemen. Thank you for standing by for the Q1 2022 earnings conference call for XPeng Inc. At this time, all participants are in listen only mode. After the management's remarks, there will be a question and answer session. Today's conference call is being recorded. I will now turn the call over to your host, Mr. Alex Xie, Head of Investor Relations of the company. Please go ahead, Alex.
Thank you. Hello, everyone, and welcome to XPeng's Q1 2022 earnings conference call. Our financial and operating results were issued by our newswire services earlier today and available online. You can also view the earnings press release by visiting the IR section of our website at ir.xiaopeng.com. Participants on today's call from our management will include Co-founder, Chairman and CEO, Mr. He Xiaopeng; Vice Chairman and President, Dr. Brian Gu; Vice President of Finance, Mr. Dennis Lu; Vice President of Corporate Finance and Investments, Mr. Charles Zhang; and myself. Management will begin with the prepared remarks and the call will conclude with a Q&A session. A webcast replay of this conference call will be available on the IR section of our website.
Before we continue, please note that today's discussion will contain forward-looking statements made under the Safe Harbor provisions of the US Private Securities Litigation Reform Act of 1995. Forward-looking statements involve inherent risks and uncertainties. As such, the company's results may be materially different from the views expressed today. Further information regarding these and other risks and uncertainties is included in the relevant public filings of the company as filed with the US Securities and Exchange Commission. The company does not assume any obligation to update any forward-looking statements except as required under the applicable law. Please also note that XPeng's earnings press release and this conference call include disclosure of unaudited financial measures as well as unaudited non-GAAP financial measures. XPeng's earnings press release contains a reconciliation of the unaudited non-GAAP financial measures to the unaudited GAAP measures.
I will now turn the call over to our Co-founder, Chairman and CEO, Mr. He Xiaopeng. Please go ahead.
Hi, everyone. In the Q1 of 2022, XPeng delivered 34,561 vehicles, representing 159% year-over-year growth. We continued to rank number one among emerging EV makers in China, as measured by vehicle insurance registration volume. Notably, our monthly deliveries once again exceeded 15,000 units in March, demonstrating a return to the same robust level as the peak season last year, despite the impact of the COVID-19. Heading into 2022, our products and technologies competitive edge, as well as our brand awareness, continued to improve. The demand for our products was strong. In March, our monthly volume of new orders reached a new high. Meanwhile, our order backlog also hit historically high levels.
From March 21st, we raised the price across our models by CNY 10,000-20,000 in order to cover the cost increase of batteries and raw materials and chips. Following the price increase, consumer demand for the mid to high-end BEV segment has remained resilient. We expect our new orders in May, excluding some cities impacted by the COVID-19, will return to the levels before the rise in price. According to the data released on Chinese passenger vehicle insurance registrations, the BEV penetration rate in March reached over 24% and, in particular, exceeded 30% in Shenzhen and Shanghai. While the industry is strained under the current impact of COVID-19 related restrictions and raw material price surges, the long term trend of increasing BEV adoption and the strong growth trajectory will continue.
I believe our relentless efforts to advance our product's competitiveness, technological advancement, intelligent capabilities and quality, in addition to the ever-growing brand awareness position us well as we work to gain market share in the mid- to high-end BEV market segment and pursue our strong growth strategy. Now turn to supply chain management given the COVID-19 resurgence. Starting in early April, COVID-19 infections spiked in certain cities, and related lockdown policies have led to serious challenges to the auto supply chain. Based on our earlier judgment of the supply chain risk in 2022, we have stepped up our preparation for our supply chain and built inventory for some key components. During such challenging periods, we heightened our focus on strengthening our core capabilities.
We work to reinforce our supply chain system and R&D capability, advancing our core competencies to better position our company amid the ongoing challenges of industry-wide auto parts shortage and cost inflation. For example, we have established partnerships with a number of industry-leading battery suppliers since 2021 in order to diversify our battery supply, which we are on track to accomplish such diversification in the Q2 of 2022. This will help reduce the risk of supply location and supplier concentration, serving to directly boost our future delivery efficiency, including in the Q2 of 2022 on and the BOM cost optimization in the long run. The chip supply challenge may persist longer.
In terms of our chip-related supply chain management, we have started to gradually develop our in-house R&D capabilities for our powerful embedded systems hardware and underlying software platform since 2015, and we expect to deploy such advanced platform in a broader scale across our new models from this year. Our pursuit of developing such technologies in-house enables us to quickly address chip supply shortage and enhance verification, integration and implementation of alternative chips much more efficiently. It also provides a highly flexible infrastructure technology platform for us to tackle the semiconductor chip shortage challenges and strengthen our cost control capability. XPeng's manufacturing is mainly based in Guangdong. Thanks to the successful containment of the resurging COVID-19 outbreaks in the Guangdong Province and government support from central and local authorities, the supply chain in key areas is gradually recovering.
We have resumed double-shift production at our Zhaoqing plant since mid-May and are making every endeavor to accelerate vehicle delivery to better serve our customers. I would also like to highlight that our long-term investment in smart EV technology supports our ability to build up customer trust and loyalty, as well as distinctive smart technology brand equity. Our Highway NGP mileage penetration rate in the Q1 was nearly 70%, and by the end of the Q1 , our Highway NGP had assisted our customers in driving for more than 24 million kilometers. These achievements will allow us to pave the way to make our next-generation full-scenario advanced driver assistance system available to a broader customer base.
在下一步OTA行业首个量产的应用激光雷达感知能力的自适应巡航及车道居中的辅助功能。那么这个功能是基于视觉并融合了激光雷达的感知能力，更好地识别车辆行驶区域跟周边的交通参与者进行最优化的决策，使整个的驾乘体验更安全和舒适。
In February, we OTA released our LiDAR-enabled valet parking assist function that offers automated parking across different floors in multi-story parking lots, marking the industry's first mass-produced solution ever. In the near future, we plan to OTA release the industry's first mass-produced LiDAR-enabled adaptive cruise control and lane centering control function. It is built on augmented perception capabilities by adopting camera and LiDAR fusion, which enables better detection of drivable areas and surrounding traffic participants, making optimal decisions to ensure a safer and more comfortable driving experience.
在五月中旬，我们在广州成功地进行了城市NGP工程版的测试。那么面对广州中心复杂多变的路况，城市NGP在确保安全情况下，从局部使用已经进入到大范围的使用，运行整体流畅，远远超出期望。那么当前正在不断优化用户体验。那么相信在我们获得有关城市高精地图等相关的审批之后，我们会推送城市NGP，并逐步地覆盖这个相关的城市数量。
In mid-May, we successfully completed tests of the latest engineering version of our City NGP in Guangzhou, navigating through the very complex driving scenarios across a broader area of downtown Guangzhou. Our City NGP demonstrated a smooth driving experience with high safety standard. We will continue to improve the customer experience of our City NGP through fast iteration of the software. As soon as we obtain the related approval for high definition maps of city roads, we plan to launch the City NGP and progressively roll out to more cities.
我们认为只有当城市NGP到达完善的阶段，形成智能辅助驾驶能力，端到端的一个闭环才会根本上改变用户驾驶的体验，进入到真正的人机共驾时代。那么小鹏汽车会基于Highway NGP、City NGP、VPA-L、LCC-L等多项技术，会把它整合在一起进行积累跟迭代。那么我们会计划从G9车型开始推出下一代的智能辅助驾驶系统，在安全、性能、成本、使用场景的范围上明显超出当前行业内的所有产品。
Once the City NGP is capable of handling end-to-end driving scenario, we believe there will be fundamental change to customers' driving experience, bringing it to a man-machine co-pilot stage. Leveraging our proprietary technologies of Highway NGP, VPA-L, LCC-L, and City NGP, along with our unique closed loop of data capabilities, I'm confident that our next generation advanced driver-assistance system from G9 will be superior to solutions offered by our peers in terms of safety, performance, cost, and generalization.
小鹏汽车在智能化的目标是普及智能辅助驾驶，最终实现无人驾驶这一出行的巨大的颠覆跟变革。我们不会仅仅追求智能硬件配置上的堆叠，我们目标是在合适的BOM成本上能够达到技术能力和安全能力的最优解，从而实现在接近全域的场景更强大、安全的自动驾驶能力，创造更大的用户价值跟企业价值。
Our vision is to make the advanced driver-assistance system available to a much broader customers, ultimately transitioning to a full autonomous driving. We'll never simply stack up smart hardware components. We resolve to develop robust, full-scenario autonomous driving system with strong performance and a high level of safety at affordable cost, therefore creating greater value for our customers and our company.
因为软件方面我们进行全栈自研，在硬件方面我们自主设计并深度集成。所以下面一步我们会基于自研的智能辅助驾驶，会深度地将智能座舱、智能底盘、新一代电气架构以及整个动力等系统进行横向的跨域技术跟能力整合，这会大幅度提高将来智能电动汽车的综合能力，给客户提供全新的智能体验，并且还可以有效地降低成本。
With our in-house developed full-stack software and core hardware at EVT level, our next step is to deeply integrate ADAS, smart cockpit, smart chassis, next-generation electronic and electrical architecture, and powertrain systems, lifting comprehensive capabilities of our future smart EV products while allowing us to provide brand-new smart product experience with lower cost.
因此，从5月9日起，我们开始在中高端配置车型上整合销售和智能辅助驾驶相关的硬件、软件和运营的服务。那么这将进一步推动我们行业领先的智能辅助驾驶系统的普及，并提供跨域的整合能力。那么同时在提高用户体验的同时，还能够有效地规模降本。随着我们在智能辅助驾驶软件的大规模普及，以及2026年向L4级别的自动驾驶技术的过渡，我们相信在将来这个体系上面还有更多的新的软件或者新的生态下面的一些商业模式会出现。
On May 9th, we made our XPILOT software a standard configuration on mid and high-end versions of our existing EV models. This will allow us to accelerate the penetration of XPILOT software, strengthen our capabilities to provide innovative functions through cross-domain integration, and make our XPILOT more affordable through economies of scale. With the upcoming mass adoption of our XPILOT, as well as our advancement towards level four autonomous driving technology in 2026, we believe more business models to monetize new software and new ecosystem will emerge. Moving on to our product pipeline. Given the fact that the COVID situation is well contained in the Guangdong province, where our headquarters is located, the R&D of all new models is progressing well. In March, the P7 became the first BEV model among emerging Chinese EV makers to reach the benchmark production volume of 100,000 units.
Meanwhile, its monthly delivery exceeded 9,000 units. The G9 is our flagship SUV model. We plan to officially launch G9 in the Q3 , followed by mass deliveries in the Q4 . The G9 is powered by industry-leading 800V high-voltage powertrain platform, next generation advanced driver assistance platform, and electronic and electric architecture. We hope the G9 will become a benchmark model in its segment, boasting comfort and luxury in addition to those industry-leading technologies. We also expect G9 to become a blockbuster model in the medium to large size smart electric SUV market. In 2023, we plan to introduce two new models. One is based on our new B-class platform, and the other is built on our new C-class platform. We expect these two new models to feature several industry-first technology innovations in addition to their superior design.
In combination with the existing models, our product portfolio will strengthen our presence and leadership in each of the sub-segments of the CNY 150,000-CNY 400,000 price range. In addition, the development of our flying vehicle is well on track with XPeng AeroHT, a portfolio company in our ecosystem. According to its latest product design, the two-seat flying vehicle's core is still a car that mainly drives on the road, while users may conduct safe flights with vertical takeoff and landing when road conditions are open and appropriate. It will deliver a brand-new mobility experience for our customers from 2026 or in a near future in suburban areas of cities where people can actually experience a new combination of mobility experience.
We'll focus on the platform-based architecture and apply modular design and next-gen manufacturing processes when designing our new models to allow more models to share the same powertrain platform, ADAS, and electronic and electric architecture, et cetera. I believe drawing on the success of the P7, we'll be able to achieve structural growth margin improvement from the G9 and subsequent new models to be unveiled. Our medium and long-term goal is to increase our company-level growth margin to above 25%.
随着G9大规模交付，我们计划从今年的四季度开始大规模部署下一代480千瓦的超充。那么这个将实现充电五分钟续航两百公里的更极致补能体验。
Now, on the supercharging network front, XPeng's self-operated charging stations featuring a wide geographic coverage and a better user experience have already become one of XPeng's core competitive advantages. As of April the 30th, 2022, the number of XPeng's self-operated charging stations increased to 954, including 774 self-operated supercharging stations and 180 destination charging stations. With the G9's mass delivery, we'll deploy next-generation 480 kW supercharging piles in the Q4 to provide a superior charging experience, enabling 200 km range after a five-minute charge.
坦率地说，今年的宏观环境充满了各种挑战，但是我们也可以看到，这些挑战并没有改变智能电动汽车长期发展、高速发展的大趋势。纯电渗透率正在不断提升，国内自主品牌占领消费者的心智，并开始向中高端市场快速挺进，智能化以及相关的技术创新势不可挡。那么在这种情况下，行业竞争格局将会加速洗牌，并且有利于我们这些竞争力突出的龙头公司扩大领先优势。小鹏汽车将通过产品技术的优势跟更强大的组织能力跟执行力，我们将会抓住市场重塑的这个机遇，巩固我们的领先地位，并取得更大的市场份额。
Frankly, the macro environment this year is fraught with challenges, but it is clear that these challenges do not change the long-term fast growth trends in the smart EV market. As BEV penetration rate continues to ramp up, independent domestic EV brands are gaining consumers' mindshare and making their foray in the mid to high-end market segments. Smart technology and innovation are here to stay, accelerating the pace of the disruption of those incumbents and presenting an opportunity for industry leaders armed with outstanding competitive edges to shine. Leveraging our leading-edge R&D technology and strong optimization and execution capabilities, XPeng is well-poised to capitalize on the opportunities to reshape the market, cementing our leadership position with growing market share.
我们会在第二季度努力克服疫情以及供应链所带来的不利影响。我们预期在2022年第二季度，我们的总交付数量约为3.1至3.4万辆，那么收入预计约为人民币68至75亿人民币。
For the rest of the Q2 , we'll continue to work hard to overcome the negative impact of the ongoing COVID-19 outbreaks and the supply chain pressures. For the Q2 of 2022, deliveries of vehicles are expected to be between 31,000 and 34,000, and the total revenues in the Q2 is expected to be between CNY 6.8 billion and CNY 7.5 billion RMB.
谢谢大家。接下来请我们的财务VP Dennis为大家介绍一下公司第一季度财务表现。
Thank you, everyone. With that, I'll now turn the call over to our VP of Finance, Mr. Dennis Lu, to discuss our financial performance for the Q1 of 2022.
Thank you, Mr. He, and hello, everyone. Now I would like to provide a brief overview of our financial results for the Q1 of 2022. I will reference to RMB only in my discussion today, unless otherwise stated. Our total revenues were CNY 7.5 billion for the Q1 of 2022, an increase of 153% year-over-year and a decrease of 13% quarter-over-quarter. Revenues from vehicle sales were CNY 7 billion for the Q1 of 2022, an increase of 149% year-over-year and a decrease of 14.5% from the last quarter.
The year-over-year increase was mainly attributable to higher vehicles deliveries, especially for the P7 and P5, while the quarter-over-quarter decrease was associated with the less vehicle deliveries affected by the seasonal factors relating to the Chinese New Year holiday. Gross margin was 12.2% for the Q1 of 2022, compared with 11.2% for the same period of 2021 and 12% for the last quarter. Vehicle margin reached 10.4% for the Q1 of 2022, compared with 10.1% for the same period of 2021 and 10.9% for the last quarter. The quarter-over-quarter decrease was primarily attributable to increase in raw material costs.
R&D expenses were CNY 1.2 billion for the Q1 of 2022, an increase of 128% year-over-year and a decrease of 15.9% quarter-over-quarter. The year-over-year increase were mainly due to, number one, the increase in employee compensation as a result of expanded research and development staff, and number two, higher expenses relating to the development of new vehicle models to support future growth. The quarter-over-quarter decrease was mainly explained by less design and development expenses, which were affected by the seasonal factor relating to the Chinese New Year holiday. SG&A expenses were CNY 1.6 billion for the Q1 of 2022, an increase of 128% year-over-year and a decrease of 18.5% quarter-over-quarter.
The year-over-year increase was mainly due to, number one, higher marketing, promotional, and advertising expenses to support vehicle sales. Number two, the expansion of our sales network and associated personnel cost and commission paid to the franchise store sales. The quarter-over-quarter decrease was mainly associated with the seasonal factors mentioned above. As a result of the foregoing, loss from operations were CNY 1.9 billion for the Q1 of 2022, compared with CNY 0.1 billion for the same period of 2021, and CNY 2.4 billion for the last quarter. Net loss was CNY 1.7 billion for the Q1 , compared with CNY 0.8 billion for the same period a year ago, and CNY 1.3 billion for the last quarter.
As of March 31, 2022, our company had cash and cash equivalents, restricted cash, short-term deposits, short-term investments and long-term deposits in total of CNY 41.7 billion. To be mindful of the length of the earnings call, I will encourage listeners to refer to our earnings press release for more details on our Q1 financial results. This concludes our prepared remarks. We will now open the call to questions. Operator, please go ahead.
Thank you. As a reminder, to ask a question, please press star one on your telephone keypad. To withdraw your question, press the pound key. For the benefit of all participants on today's call, if you wish to ask your question to the management in Chinese, please immediately repeat your question in English. For the sake of clarity and order, please ask one question at a time. Management will respond, and then feel free to follow up with your next question. Your first question comes from Tim Hsiao from Morgan Stanley.
Uh,
I've got two questions. The first question, just want to quickly follow up on XPeng's previous spec change. I think the company now makes the XPILOT standard features for some P5 and P7 models, which will surely build out to the user experience and the adoption rate. But could you share a little bit about the company's new software strategy and when we plan to restart charging users for the XPILOT software in the future? Will it be from, like, XPILOT 4.0? And is that gonna be a bit challenging to resume the fee collection if most peers appear to follow us to launch free software ecosystem business model? My second question is about the margin trajectory.
Could you please update when the contribution from the orders with new prices will kick in? I recall management mentioned it might be late June, but not sure if there is any further changes amid recent supply chain disruption. As battery costs would likely be further climbing in Q2 , do you have enough low-cost inventory for component and battery to cover the low price orders delivered in both April and May, or we can leverage our more diversified battery supply chain? Those are my two questions. Thank you.
这个中等级的智能服务加持体系到下面一步很快进入的高等级智能服务价值，也就是我们内部所讲人机共驾的这个时代的时候，我们认为硬件和相关支持这个硬件相关的软件服务和OTA的能力放在一起，打包一次性开始在这个收费，我们认为无论是对于企业，对于客户的体验，包括对企业的这个毛利都是有更直接更正面的价值的。那么我们相信在后面我们会衍生出来不少新的软件或者服务收费方式。例如当高等级的智能服务价值再往前走，因为有足够的数据提高之后，我们可能会推出，例如按照时长或者按照里程的收费方式。另外，我们现在也正在看到一些新的以服务，以软件包加场景为组合的新的服务的一些收费方式，这些都是会在我们在更之后会来去考虑或推出。
Thank you. Very good question. Currently speaking in terms of our pricing on top of our ADAS technology as well as our software, I believe that amongst all of the emerging EV makers in China, we are doing the best in terms of our penetration rate, adoption rate as well as the final results. However, we did notice a trend in the market, which is that if you separate the charging for the software as well as the hardware from the perspective of the customers or the consumers, it is actually better to do a combined or a bulk charging package that combines the usage or the adoption of the hardware together with the software rather than doing it separately.
If we can do this kind of integrated pricing model for both the software and the hardware, it would be actually very beneficial for our future upgrade of the software in terms of the adoption of the ADAS technology, the upgrading of smart cockpit, smart chassis, as well as the overall software performance together combined with the hardware performance.
Right now, we are in the mid-level of ADAS technology application, and in the future, I believe in the near future, when we are able to really move towards a higher level of ADAS technology application, which we internally call the man-machine co-driving experience, we believe at that point in time, we should be able to do a lot more OTA upgrades of our software with this kind of integrated pricing model that combines both the hardware and software so that we can increase and enhance the overall experience for our products, for our overall user experience, as well as be very beneficial for the overall company-level gross margin as well. We believe this kind of integrated pricing model for both the hardware and software together will be more beneficial and sustainable for the long run.
In the future, we believe that more monetization or capitalization that based on the software usage or adoption will emerge as we continue to accumulate more data and more user experience based on the launch of our software and hardware together. For example, there are different kinds of monetization that can be based on the time spent with our software or based on the mileage that our consumers or our customers use on our products or services. Overall speaking, we believe that this kind of integrated pricing model will actually be more beneficial and sustainable in the long run that allow us to further optimize our user experience.
Hey, Tim, this is Brian. Let me just to add a couple comments. First of all, you know, we have been witnessing, you know, the various software monetization has been implemented by various companies in China. So far, I think, it is quite clear that the separate charge and also subscription-based models has not been very prevalent in China market. In some ways, I think it's limited the broader penetration of the utilization of these technologies. We believe that, you know, at this stage of the market, our core focus is to make sure that we provide optimal service package that can be widely used, that increasing the penetration and coverage and witnessing the stickiness of our technology is probably the first priority before we actually implement various different monetization strategies.
That's why I think we are adopting the current standardized charging model. But I think in the long run when we actually see advancement in technology, see more broader utilization and also stickiness and dependence of this technology, I'm sure we'll be able to have much more robust monetization and variations that we can use for the Chinese market. I'll hand over to Dennis for the second question.
Tim, this is Dennis. In the previous earnings call, you mentioned we will be able to deliver most of the new priced orders probably sometime in June, maybe in the H2 of June. Because of the COVID impact, especially in the Shanghai area, now we are looking to deliver the lowest price protected orders until June. Most of the new price order will be delivered probably starting in very late June and some starting in July. That's the current assessment of the delivery.
Next question, please.
Thank you. Your next question comes from Nick Lai from JP Morgan.
管理层大家好，我是摩根大通的Nick。我想问两个简单的问题，我先用中文问，再用简单的英文翻译一下。第一个问题就是，小鹏总刚说到说二季度的销量三万一到三万四千台左右，换算每个月在一万一到一万两千五，那这个跟我们的这个产能是可以理解说我们现在因为受到这个芯片制约等等原因，那损失的production在五六月份制约的这个影响大概是20%~30%，这样理解对吗？然后这个是20%~30%这个production loss是不是在三季度可以把它渐渐补回来。然后刚刚有提到说芯片这个制约的影响似乎比预期的长，那我们现在的芯片的这个supply，就是供应产能是什么样，可以给我们简单介绍一下。这是第一个问题。那第二个问题是有关电池价格，因为电池价格上次也是在业绩的电话会议有提到，然后电池价格其实现在的这个上游的厂商，不管是这个CATL还是宁德时代都有提到说有可能是这个半年或每季度甚至这个有价格联动的调整，那不晓得可以跟咱们分享一下我们现在跟电池厂家的这个价格调整的一些策略。My two simple questions.
First is on monthly production. Yeah, management guiding Q2 production of 31,000-34,000 units. That translate into roughly about 11,000-12,500 units per month. Does that mean potentially we have production loss somewhere about 12.5% in the rest of 2Q? Is it possible that this production loss can be recovered in Q3 r? Latest update on chip supply. Second question is really on battery supply, pricing mechanism with the supplier. Thank you.
Hey, Nick. It's Brian. Let me answer your first question. First of all, you're correct. Our quarterly guidance for the delivery this quarter reflects a bottleneck in the supply chain, which has been impacted in April as well as May and likely in June as well. This is actually a number that reflects that we cannot, you know, obviously, have the full output even with the capacity of the factory running at the full capacity. It's still limited by the supply chain constraints. We envision that if the supply chain resumes normally, we'll be able to catch up with the volume in the Q3 because we have sufficient capacity to ramp up production at a time.
I think, you know, I think we're confident that, as soon as the impact in Shanghai area and some other area that resumes normally, we'll be able to produce enough output to accelerate the delivery, and to meet the customer demand, which we're seeing is very robust.
我来补充回答第一个问题，有关这个芯片的能见度问题。我相信如果没有疫情的影响，基本上大部分的这个新能源的智能汽车的生产厂商，它的主要的产能我相信会受限于芯片。这一个，我们最新的统计，一台智能汽车的芯片的绝对数量甚至达到了五千颗，当然它的这个，很多的时候，有时候同一个地方用了数十颗甚至或者十几颗这样的一模一样的芯片。那么从现在来看的话，一个主要的芯片大概有几颗的，这个三到几颗的这样的一个芯片，我们发现能看到它的产能的问题不太大，但是很多时候的一些产能的问题受限于一些特别小且便宜的芯片，那么这些芯片现在来说非常不确定，在整个的这个中国的市场，我们都看到非常不确定。基本上如果能够看到当月能够看到次月就已经非常好了，很多的时候甚至当周只能看到下一周的这样的一个产能。所以芯片的挑战我相信从在二零...
二零年我们开始关注，到我们认为二零二一年底可以缓解，到我们去年的时候，我们认为二零二二年底可以缓解，我们仍然认为芯片的挑战会持续到今年甚至到明年的更往后的时间。原因我们认为多样，但是我觉得有一个非常之重要的点，就是说谁在芯片领域这个里面，第一，通过一些长期且有包括甚至长期的战略合作，我相信可以解决一部分。但另外一部分最重要的也就是刚刚我所说的，如何建立一个强大的跟芯片跟嵌入式相关的一个技术团队，它能够在数个月内根据芯片的动态的变化而随机而将整个车的这个相关的技术平台进行变化，是非常之重要的。所以我们对于芯片的当前的挑战，相对我们认为会比我们在之前要做得更好。谢谢。
OK.
Yeah. Let me just address the question regarding the chip visibility. If there were any COVID resurgence in China right now, I think the majority of our peers or all of the new EV makers in China right now will be actually restricted by the capacity or the supply of the chips in general. According to our latest calculation, every single unit or every single product of ours will need an average of 5,000 chips. For some parts of the car that will require about a dozen or several dozen of the same chips for just one part of the car. For some of the main chips, actually, for example, 3-5 kinds of the main chips, their capacity is actually okay, and their suppliers actually okay.
The main shortage actually comes from some of the smallest and the cheapest ones, the chips, and their capacity is very very limited and the visibility is also very limited in China as well. April, I would say we were performing actually quite well in terms of the capacity and the supply of the chips in this regard. However, we believe that in China, I mean the visibility to chips in general going forward is still very very limited and how its impact on our capacity is also going to last for a while. Now from 2020 on, we begin to notice the crisis in shortage of chip supplies in general. By 2021, we thought that maybe the crisis can be resolved or at least alleviated to some extent by the end of 2022.
Now our latest judgment is that the situation is going to I mean, the crisis is going to still last for a while, maybe ahead into 2023 or even longer. Now there are several resolutions there. For example, signing long-term contract with our chip supplier can be one of them. The other is really, as I mentioned in my previous remarks, that we need to build a very capable team, a technological team that has very strong capability in building embedded architecture that allow our platform to be very very flexible in adapting to the supply shortage of chips. For example, we should be able to adapt to for example, the shortage in chips in some part of the platform or some part of our product, and we can change flexibly according to the supply of different chips and different part of the unit.
As I mentioned earlier in April, we did actually quite okay in terms of the visibility of the chips. Sometimes, you know, we only have one week visibility into the future in terms of our chip and how it affects our capacity. Overall, I would say the situation is still not very positive at the moment. Thank you.
好，我来描述一下关于您的第二个问题，有关电池。从去年开始，小鹏已经在非常关注关于电池的有关产能、有关电池的价格的一个波动性的问题。所以我们都知道在整个的2021年，实际上电池最难的是没有供应量，所以产能是严重不足的。我们相信在2022年的年底，或者说2023年的上半年，我相信在行业里面电池的整个的供应的能力都会大幅度提高。那么在这个情况下，在去年的第四季度和今年的前面的五个月，我们看到电池的受限于部分的原材料，特别是锂矿的大范围大幅度的增长，价格导致了电池的价格有很大的波动。但是我们也看到一些变化，第一个就是说，中国的锂矿的价格上涨了非常多，但是在海外并没有同样的上涨，海外基本上保持和去年在上半年的相同的水准。第二个，在最近的这个整个的疫情，以及整个的这样的一个锂矿的快速上涨的情况下，在二季度我们已经看到了锂矿的价格在适度的下行。我们实际上非常高兴的就是说，小鹏在从去年的下半年开始，我们一直在引入更多的电池的合作伙伴，我们期望有更多电池合作伙伴能够去解决小鹏在之前所碰到的这一个，能够卖得出去，但是没有足够的电池，导致产能不足的这个原因，我们在今年二季度已经开始一定程度扭转，并且我们相信在后面就会完全的扭转，这是我们非常开心的事情。第二点，我们会看到这样一个新的重要的电池的多家的合作伙伴，我们可以在整个的成本上面有比之前有更好的这样的一个价格，虽然在联动的这个体系的情况下，从长期来看，我实际上认为这一个电池的价格会比当前的高峰会有相当比例的下降，但是有可能不会降低到这一个，在前几年能够持续下降的这样一个低点。但是换一个角度，我们非常有信心在新的电池平台技术上，包括了CTP，包括了我们的新的超充的能力，包括我们新的用碳化硅的解决方案，包括我们新的汽车的封阻的和减重上面做得更好的这个情况，以及包括新的在电芯材料跟电芯技术上的提高。实际上从今年下半年开始的后面的车型里面，我们会认为，在纯电的电池，包括补能，包括动力上的组合的情况下，会导致了我们在这块的能力会更强。好，谢谢。
All right. Let me address the H2 of your question, which regards the capacity and the pricing of our battery supplies. Now in 2021 our battery supply was greatly restrained, and that resulted in a lot of issues for us in terms of our deliveries as well as our overall capacity of production. From 2020 on, and also, I think, from this year and all the way to the H1 of 2023, I think the battery supply situation will actually become better.
From Q4 last year all the way to the first months into 2022, we begin to notice that there are a lot of pricing increase in terms of the supply of battery, mainly due to the increase of raw materials as making those new energy batteries, which include a lot of price increase in lithium materials. We noticed that kind of price increase in China domestically speaking, but not so much in the overseas market. We believe that the pricing of lithium as a raw material overall remained the same as the situation back in 2021, the H1 of 2021.
Because of the current COVID resurgence as well as the price increase in lithium materials, I think overall the situation remains very hard for the whole industry, not just for ourselves, but the situation can begin to resolve or the pricing of batteries will continue to reduce slightly from the Q2 of this year on. Now, I mean, for the H2 of 2022, we should be able to see some adjustment or some optimization of our battery supply because we are able to adopt multiple suppliers of our batteries, which really can be beneficial in resolving some of the issues that resulted from a lack of battery supply from previous quarters.
From Q2 on, we believe that we would begin to actually see a lot of progress in this regard. The second thing is, with multiple suppliers of batteries, we can do better cost optimization of our products as well. I think in the midterm, the battery pricing will continue to actually reduce, you know, from the current high level, but probably they won't be able to reduce to the low level as we saw in previous years.
However, we are very confident that, you know, XPeng benefiting from our supercharging technology as our SiC charging materials adoption, also some of the optimization in our technology advancement, in reducing the wind resistance, in reducing the overall weight of our product, as well as to overall have a high efficiency of utilizing the batteries, as well as adopting multiple supply of batteries can benefit us in the long run and can allow us to continue to serve our customers with enough, actually production of our products going into the H2 of this year. We believe that, from the H2 of 2022 on, we should be able to continue to boost ourselves of new products benefiting from the above factors that I just mentioned. Thank you.
Next question, please.
Thank you. Your next question comes from Bin Wang from Credit Suisse.
My question is about the margin outlook in the Q2 or the H2 this year because we see some different factors. It seems that the higher price products can only kick in in the Q3 , that's why Q2 may be some decline compared to SiC in the cost margin. The Q3 can or H2 can assume the cost margin can reach all-time high when the high pricing products start to help. The second part that you recently changed the software pricing, what's the impact for cost margin in the Q2 and Q3 ? That's number one question. Number two is about the new products. As you mentioned, there will be a large size products and the ultra large products in 2023. What's the pricing range? What's the margin?
Can they above the 20% gross margin because you are guiding that you target 25% margin in 2025 or midterm? Thank you.
Yeah. Bin Wang, this is Dennis. Let me address your first question. Yes, you're right. Because of the COVID impact, our Q2 volume was impacted, compared with our original projection. Our Q2 gross margin will be impacted as well. We will further investigate the impact, and also take some action to recover the margin in the Q2 . Going to the Q3 , yes, we will deliver new price orders. Our margin in the Q3 will rebound, will improve. However, we are seeing we will have further margin improvement in the quarter four when we have new model delivery to the market.
Our margin in Q2 will be slightly impacted by the delivery, the new price order. Q3 will improve, and then Q1 will further improve. That's our present projection.
Yeah. Bin-
Hey, hey, Bin. Let me finish. Just to answer your second question. Yes, the products that we're gonna introduce next year, which will include a product coming from a C-class platform, will be at a premium to the current portfolio products that we have, including the G9. You can expect that will be close to or even exceeding the CNY 400,000 price range, and for such a product that we certainly hope it will have high gross margin. 20% will be a very important benchmark for us to target our product design. For that product, I think, assuming a 20% or above product margin is actually reasonable.
Okay. Can I ask?
Also internally speaking, our expectation for these two new products is that their capability or their overall performance combined will be actually more superior than two P7s combined.
Right now, we're not giving guidance given the lack of visibility of the, I would say, material prices as well as the overall environment. We are hopeful that the rebound will be pretty robust from certain quarter levels.
Thank you.
Okay, next question.
Thank you. Your next question comes from Jeff Chung from Citibank.
Okay, I have three questions. One is due to the carryover backlog rolling from the Q1 , how many in the Q2 will be without the MSRP price hike? This is number one. Number two is the newly generated order backlog since the first of May. Could you tell us the trend of the newly generated order backlog? The final question is about the Q1 vehicle margins. Could you break down the vehicle margins without the software? Also separately, could you tell us the Q1 software margin? For an apples-to-apples comparison, if we strip off the raw material price hike, what should the Q1 vehicle margin have been? Thank you.
Jeff, this is Brian. Let me answer your second question first, which is the new order trend, and then I'll leave the number question to Dennis. First of all, as we said in our CEO presentation that we actually saw the new order recovery in May in areas that's not affected by COVID lockdown in certain cities is already near the pre-price increase levels. Which is a very encouraging sign because obviously we see that demand is genuine and also it's actually rebounding pretty nicely. It took us probably a little bit over a month to build up that demand pool. Obviously you saw the month of April, we saw slow demand recovery, but in May, actually the order level is actually quite robust.
I would think with increasing relaxation of COVID measures in large markets that we target, which are important markets to us, we see the overall order momentum will be quite strong. I'll hand over to Dennis on the other two.
Yeah. Hi, Jeff. Let me address your first question. We don't provide very precise, for example, the new price order deliveries, the old price order deliveries. In April, majority of deliveries were the old price protected. Also in May, in June, majority would be the old price, especially for the P7. Majority of P7 would be the price protection because the backlog is. We need some time to deliver those orders. For your third question, yes, the Q1 , the reason why we can maintain the same gross margin level as quarter four last year was because number one, we have mixed improvement. Our P7, the product mix in the Q1 was about 56%.
In the quarter four last year, it was about 50%, so that's a mixed improvement. Next one is the variable marketing kind of rationalization. We technically reduce our variable marketing spending to increase the overall margin. Having said that, we were also impacted by two key factors. Number one is the NEV reduction, the new energy vehicle reduction, which is about 20%, the subsidy level about 20% compared with the 2021. The other one, the other big challenge would be the battery cost. I cannot provide the detail number, but that is a big offset of our, like the mix improvement and also the variable marketing reduction.
All in all, we were able to maintain the quarter four margin level for the moment.
Next question, please.
Thank you. Your next question comes from Ming Lee from Bank of America.
Regarding your autonomous driving software, so in the future, will the sales of the software be included in the car price, or you will still consider to charging the consumer on a one-off or a monthly installment basis? Because this time, you give the software as a standard configuration, but in the meantime, you also cancel free charging and also cancel the subsidy for installing the charging pile. Is it a margin-neutral event for your business? Second question, regarding the supercharging technology.
Is the 480 kW charging pile and also 800V battery the ultimate battery technology charging technology, or in the future, will you expect an even further advanced charging technology? Thank you.
Hi Ming. Let me address your first question. Yes, when we build those software into the vehicle together with the price, at the same time, we get rid of the supercharging, free supercharging and also the kind of the destination charge, the home charge, and including the installation. At the same time, we also adjust the price a little bit to cover some of the cost. Overall, the margin impact will be neutral. More importantly, with more customer using the software, we will be able to increase the scale and also to dilute the some kind of on the expense. Overall, that's a good strategy for us.
In terms of the next product G9 and also the future product, we haven't really decided yet. That will be subject to a further internal discussion, whether we'll continue such practice or we will have another arrangement. That's subject to our internal discussion. When we introduce the product, we will also mention that. Your second question.
十分钟或者十五分钟能够充电很多的里程。但是我们现在没有最终的测试结果，所以我们并没有对外界宣布。先帮我翻译第一段，谢谢。
All right, let me address the second question of yours. Actually, this year, we have made this plan to launch the 480 kW charging facility by the Q4 . Originally, you know, before heading into 2022, we had planned to actually launch two kinds of charging facilities. One is 260 kW, the other is 480 kW. After evaluating the macro environment of this year, we make the final decision of launching 480 kW by Q4 this year. That allows for charging for five minutes that lasts for 200 km of driving experience. However, if you actually charge for 10 to 15 minutes, it can give you even a longer driving range. We haven't had the final testing results yet. That's why we are not releasing the number.
在未来的一年里面，也就是当这个480千瓦的超充，以及我们的这个70千瓦的目的地快速充电出来之后，我们会进行更大范围的部署。我们相信在明年下半年，在电动化和智能化都会形成一个突出的拐点。那么这个拐点首先说一下电动化，电动化在随着新的汽车的风阻更低，动力转化能力更强，以及在电池的跟整车的结构体系进行变化，以及在超充体系的效率化跟规模化之后，整个电动化相比现在的汽油或者相比现在的混动的优势会有比较明显的增强，这会极大地推动新一代电动化汽车的销售跟装化的增长。也就是说对于客户来看的话，用更少的钱，更低的电池的度数能够形成更好的续航，以及更好的这个补充能量的体系。
For the upcoming year, we believe that with our building of the 480 kW supercharging facility as well as our 70 kW destination charging, we should be able to actually launch quite a powerful charging network that's going to cover a wider geographical area in China. In the coming year, we believe that we are going to welcome in a new kind of era of optimization as well as electrification.
Now, in terms of the improvement of electrification, we believe that as our technology continues to develop in terms of reducing wind resistance, including enhancing the efficiency of the electric system, the powertrain, as well as our battery, with also the further enhancement of the supercharging infrastructure, we will be able to welcome in an era where we actually have a higher charging efficiency or effectiveness compared to the traditional gas stations for ICE vehicles.
Which means that in the future, the market adoption rate for a new EV will actually be higher because consumers will begin to actually see a great enhancement in using every single dollar for charging their electric vehicles with less usage of power consumption.
第二个就是我们也相信这个在大概2023年下半年会形成智能化的拐点。这个因为这个全车的高等级的自动辅助驾驶出现，会让整个全场景的体验都可以走到一个很好的、很舒适以及全面的这个用户认知体验跟安全的能力增强。并且当这个功能一旦实现了标准的硬件、软件打包的销售跟预置了之后，我们在之前提到的看到的很多的有趣的功能，包括主被动安全的极大的增强等各种跟智能化或者安全化相关的功能，都可以在同样的硬件体系里面全部内置，实际上等于是节约了更多的硬件。所以在这个我们非常坚信这个智能化、电动化在明年会导致新的平台会形成拐点。刚刚您还有一个问题，就是说会不会未来有更快的超充体系。对的，我们也正在去设计再下一代的这个超充体系，我们希望能够在五分钟能够充电更多公里，能够去让它接近像加油的这样的一个体系的逻辑。谢谢。
The second part of my answer is actually by the H2 of 2023, we expect to see a new development that is revolutionary for optimization of our technology. Which means that by that time, we should be able to cover the full scenarios of driving and overall, we can enhance the user experience and also the safety standards for using our products as well. By that time, which means that we should be able to integrate the installation of our latest technology in the hardware as well as our software together with our combined installation or prefiguration of both the hardware and software together as a standard configuration of our products.
When we reach the stage of consistent sales of those kind of pre-install configuration, we should be able to actually optimize the overall standards for safety as well as our driving experience, because we will be able to put in a lot of the embedded functions that we want to install in our products to optimize the user experience. Overall, that can save a lot of the usage of our hardware and overall to increase the usage efficiency and effectiveness of our hardware in general. Yeah, just to summarize, by the end of this year or by the H2 of next year, we should be able to welcome in lots of revolutionary changes in terms of the electrification as well as optimization in our industry.
The second part of your question is also about the next generation of our charging facility. Yes, we are still in the R&D process. We are constantly developing our technology in order to develop the next generation of supercharging facility that can allow for fast charging of five minutes and that support a even longer range of driving. Yes, that's all for my answer. Thank you.
Hi, operator. We will take the last question.
Thank you. Your next question comes from Chang Xing from CICC.
好的，各位领导好，我是中金汽车分析师常青。那之前的话，前面那些提问基本上也覆盖了我大部分的问题。我这边可能追问两个小的、简单的问题。首先第一个，还是基于我们权益和软件结合收费的一个调整。那，想问一下就是，基于我们现在整体的新车型的软硬一体化这样的一个定价策略，我们前期也是梳理一下现在的车型，以P5为例的话，那不同的版本像P版和E版，相对这个裸配的基版可能定价是高了可能三万、三万二和一万八，可能这个价格的一个差异更多的是覆盖硬件成本的一个增加，我理解。那么在这个新的车型上，例如像G9，或者是明年的新的车型，我们是否会基于软硬一体化的考虑，把软件的相关的一个收益或者是margin也考虑进定价中，也就是说相关的可能不同配置车型之间的价差会拉大。这是第一个问题。然后第二个问题的话，我们也是看到今年的话，可能尤其是在二十万到二十五万左右定价的新的车型供给，有比较明显的一个增加，那部分的品牌车型也强调了在电动化一些新的技术的应用，比方说像这个CTB、CTC这样的一些技术。我们也是听到刚刚那个小鹏总包括领导讲，我们会在G9，或者是更多的新车型上，应用更先进的一个电动化的技术，明年可能也是这个拐点。那，相对短期来看，尤其是在今年和明年的上半年，是否会担心更多的竞品车型对像我们的现有的P5和P7，相对这个技术相对比较老一点的车型产生较大的一个销量冲击和影响。主要是这两个问题，然后我翻译一下。So my follow-up questions are regarding the company's adjustment to charging and software activation charges.
The first is regarding to the pricing strategy of new model after the integration of software and hardware. We have found out that the price difference of different versions of our current model, taking P5 as an example, the price of P version and E version is 32,000 RMB and 18,000 RMB higher than the key version. About to cover the increase in the hardware cost. On our new models, such as G9, will we take the benefits of software into account in the pricing strategy? That is, the price difference between different versions of the model will be widened.
My second question about this year, we can see the supply of new models priced at CNY 200 thousand-CNY 250 thousand has increased significantly, and some models have emphasized their new electrification technologies, such as CTC and CTB. We have also heard that more advanced technology will be applied to your new models such as G9 and next year's new model. In the short term, especially in this year and the H1 of next year, do you worry about that competing products will have a great impact on your sales of P5 and G9, P7? Thank you.
关于第一个问题，我觉得可以简单来解释，在我们后面的G9以及后面新的未来的多款车里面，我们的确会把这个带智能辅助驾驶的、高端的自动辅助驾驶的能力，有软硬件架构跟不带的话，价位会拉大。那么在这个里面，我们当然还有其他的方式，我们可以还有一些方式，比如说随着我们技术的成熟，我们在同样能力的智能辅助驾驶，我们可以用更低的硬件的BOM，我们有能力把它集成得更好。实际上在这个里面我们也在做大量的工作，而这些工作对于最终的客户是有利，对于我们企业也是非常的有利。所以从我们现在来看，我可以跟您分享一个数据，当我们五月份调整的这个软硬件配置之后，我们在P5的高配、中高配的选者的比例都大幅度往上提高了。像我们这个从现在的这个看是相当有信心，在能力上，在毛利上，以及在最终的这个比如说举例，我们将在智能辅助驾驶的扩展上面，我们都能够做到把这做到三者合一的这个价值。这是关于您的第一个问题。关于——
Sir, about the first question of yours. Yes, in the future upcoming models of ours, including G9 and other new models, we plan to enhance the price gaps between different configurations. For example, for higher end products or higher end configurations, the price will be a higher because they embed or incorporated a lot of our ADAS function as well as the high or advanced software.
On the other side of the coin is that for lower configuration products, we are actually able to sort of lower the pricing because we will use better BOM cost optimization for the adoption of lesser ADAS kind of hardware for those kind of low configuration, which can be very beneficial for individual consumers as well as for us as a company. In May, after the adjustment of our pricing that include both the software and hardware, we actually have seen a spike in orders for mid to higher end configurations for P5.
That gives us a lot of confidence in going forward, because in the future, with this kind of new pricing strategy or incorporation of both hardware and software into the one configuration, we should be able to further enhance our overall capability in optimizing the user experience, the driving experience, as well as optimizing our gross margin and in adopting more high level ADAS technologies into our future products.
For your second question, actually, I'm not worried about P7. For example, I believe P7 after this City NGP is launched, it is in this CNY 20,000, this level of cars is in automatic driving function. Made the best seven cars. Even in the next few years, we believe this most want to achieve such an ability of automatic driving equipped with two internal combustion engine cars, its actual price is also needed to be significantly more than this price. On this line. After P7, we will also have some new thoughts on this automation. We'll share with you our new actions on P7 at that time. We don't think including we can see a figure is in P7 in July 2020, just after the launch, we saw this in March 2021.
We launched this Highway NGP and the number of P7s in Highway NGP, the number of sales has risen sharply, all the way to this one this year. We also created this highest number of 9,000 delivered monthly. In fact, our products compared to our other friends, we can see as our quality improves, as our market share scale increases, as we OTA constantly forward, our competitiveness improves. We're at this point, from the data so far, still the same, maintaining the previous judgment. Thank you.
Regarding P7 or P5, actually ever since the launch of City NGP on G9 on P5, we've been able to actually recognize our leadership position of this model in the market because if our peers were to develop similar products with the same sort of performance configuration in the coming several years, the pricing of their product will be much higher than ours for P5. We are going to release more information regarding our automation and smart designs for the upcoming products and the current product portfolio in the future when we have them ready.
Actually reviewing the sales performance of P7 when we first launched it in July back in 2020, all the way to in March 2021, when we launched Highway NGP for P7, we were able to see a strong growth in the total sales or the order number of this particular model with the adoption of NGP. Also for Q1 this year, we were able to record a historically high level of 9,000 units of monthly sales for this particular product.
I would say that overall we are very confident about our judgment of this, the positioning of these kind of products in the market in terms of its own positioning in terms of the product quality, our market share, as well as for the OTA release in the future that will strengthen our leadership position of these products. Thank you.
Okay. Good. Thank you. We have no further questions.
Operator, we are ready to conclude this call.
Thank you. This concludes the Q&A session. I would now like to turn the call over back to the management for closing remarks.
Thank you once again for joining us today. If you have further questions, please feel free to contact XPeng's investor relations through the contact information provided on our website or The Piacente Group Investor Relations.
Thank you. This concludes today's conference call. You may now disconnect your lines.