Producer | He Xi Typesetting | Ye Yuan
Xpeng Motors is becoming more and more popular.
Not long ago, Xpeng Motors announced that it has reached a strategic cooperation with Didi Chuxing and will use additional stock issuance to acquire Didi’s smart electric vehicle project.
It is expected that by 2024, Xpeng Motors will rely on the technology and assets acquired from this acquisition to launch the A-class model "Mona" with fully autonomous driving functions to the market.
01
Xpeng announces acquisition of Didi car manufacturing project
Xpeng Motors’ strategic cooperation with Didi is not without warning. The author noticed that as early as more than a week ago, Xpeng had already announced in its second quarter earnings call that CEO He Xiaopeng would launch its own "fully autonomous driving" model in the most mainstream A-class market. Now after the agreement was announced, the market realized that the new model in Xpeng’s mind was the Mona, and the technology, production lines and other resources for the new car came from its strategic partner Didi. At the media communication meeting held for this agreement, Xpeng gave a detailed introduction to the new model. Mona is expected to be launched in 2024. Its market positioning is to target both ordinary consumers on the C side and online booking on the B side. Fleet and other operating entities.
The price of the Mona model is set at around 150,000 yuan. It is a purely electric-driven A-class car. At the same time, Mona will be equipped with Xpeng's high-end autonomous driving system, and at an affordable price, it will become an important carrier for Xpeng to fully promote autonomous driving technology to the market. The announcement of this strategic cooperation agreement comes just one month after Xpeng reached a strategic cooperation agreement with Volkswagen Group on July 26. The intensive actions in a short period of time show that Xpeng is no longer satisfied with its existing product matrix and market share, but has begun to seek rapid scale expansion through cross-brand and even cross-business cooperation.
There are many key points for cooperation between the two parties. First of all, in terms of products and technology, the Didi car-making project acquired by Xpeng is actually the D2, a customized car that Didi has been developing independently since 2 years ago. Judging from Didi’s internal product history timeline, D2 is the successor of Didi’s last jointly developed model, D1. The strategic cooperation agreement just reached shows that Didi no longer pursues independent development in car manufacturing, but instead cooperates with new forces such as Xpeng in car manufacturing to achieve both a reduction in the proportion of heavy assets and a Goals to increase sales and efficiency. In terms of the form of cooperation, Xpeng did not use cash payment for this acquisition, but used a two-stage issuance of additional shares to exchange resources with Didi.
In the first stage, Xpeng issued more than 58 million additional Class A ordinary shares to Didi on the day the deal was concluded, with a total value of HK$3.724 billion (approximately RMB 3.462 billion). In the second phase of the cooperation, Xpeng also plans to issue an additional 32.96 million shares to Didi. According to the double agreement, when the acquisition project reaches the SOP (small batch production stage) milestone within the specified period, then Peng will need to issue 4.63 million shares to Didi; when the new car delivery reaches 180,000 units, Xiaopeng will need to issue up to 4.63 million shares to Didi. The party issued approximately 14.0546 million shares; and when the total number of new car deliveries reaches 360,000 units, Xpeng will need to issue a maximum of approximately 14.2765 million shares to the seller. In short, the cooperation between Xpeng and Didi is essentially an annual sales betting agreement based on the issuance of additional shares. The lower limit of new car delivery within two years is 100,000 units and the upper limit is 360,000 units.
02
Why did Didi sell its car-making project?
From an industry perspective, this cooperation is also the process of Didi transferring its R&D and car manufacturing assets to Xpeng. As a company whose main business is Internet travel, Didi has actually been involved in building cars for a long time. Going back to 2018, when Didi joined 31 automobile industry chain companies to jointly establish the "Torrent Alliance", it had already created a strong atmosphere for participation in car manufacturing. By 2020, Didi and BYD established a joint venture to focus on the design and research and development of online ride-hailing. At the end of that year, they launched the first online ride-hailing D1. BYD was responsible for the OEM, while Didi was responsible for the car-hailing service. A complete design and engineering system from chairs to car networking architecture. Although Didi has devoted a lot of resources to the development of D1, its sales are not ideal. After its delivery volume reached a peak of about 10,000 units in 2021, it quickly fell to a mere 994 units in 2022, which is even lower than the 1,000-unit threshold. Not passed.
Around the same time, Didi also tried to cooperate with Li Auto to launch an electric MPV. However, due to different views on the market prospects of both parties, the mass production plan of the model was shelved. However, Didi has never given up on its dream of building cars. Since 2020, the company has not only established an autonomous driving technology research and development team, but also upgraded it to an independent team, and has obtained road test qualifications in Beijing, Shanghai, and California, USA. . As of April 13 this year, Didi publicly stated its ambition to popularize autonomous vehicles, and also stated that it would actively promote the large-scale production of L4 driverless new energy vehicles. However, from 2021 to the present, under the trend of major professional automobile manufacturers deploying in the new energy market, Didi, as a non-host manufacturer, has never been able to come up with competitive products to compete with Tesla, BYD, " Competing with mainstream brands such as "Wei Xiaoli" and Nezha, they are unable to gain a foothold in the automobile market in the new energy era, both in terms of sales and reputation.
After D1 was launched to compete under the impact of cruel market conditions, Didi concentrated most of its car-making team and resources on the newly established "Da Vinci" project. This project encompasses Didi’s R&D assets in model platforms, cockpits, and intelligent driving systems. The operational goal is to launch the next-generation model of D1 and the more intelligent D2. However, at this time, Didi is already suffering from high investment and high costs, and it is difficult to provide sufficient support for the goal of independent car manufacturing---although Didi Chuxing achieved a quarterly profit of up to 5.5 billion yuan in the first quarter of 2021 , but then encountered a "security incident" in July of that year, and the APP was removed from the shelves, causing the company's business to be stranded across the board.
Looking back at the period from 2018 to 2020, Didi's revenue was 135.3 billion yuan, 154.8 billion yuan and 141.7 billion yuan respectively, of which domestic travel business accounted for more than 90%, and its net losses were 15 billion yuan, 9.7 billion yuan and 106 billion yuan respectively. billion. By 2022, although Didi has adopted a variety of means to reduce costs and increase efficiency, its operating income for that year will still only reach 140.8 billion yuan, a year-on-year decrease of 19%, and its net loss will reach 23.8 billion yuan. At this point, Didi has accumulated losses of more than 100 billion yuan in the ten years since its establishment in 2012.
In the absence of obvious profit points overall, Didi is actually unable to continue investing in the hugely expensive new energy vehicle manufacturing field, and is even in danger of being eliminated from the new energy vehicle manufacturing track. Therefore, Didi decisively gave up its obsession with independent car manufacturing this time, and instead exchanged technology and R&D resources for stock prices, replacing its expensive car manufacturing system with Xpeng, an established car manufacturer. This move, on the one hand, allows Didi to maintain its participation and influence in the field of new energy vehicle manufacturing with the support of the strategic cooperation agreement. On the other hand, it allows Didi to put down the heavy asset burden of the car-making system and leverage its own marketing advantages to obtain profit distribution rights through the new car channel marketing rights confirmed in the cooperation agreement. It is a wise decision.
03
Xpeng Motors looks into the distance
For Xpeng Motors, this cooperation has also benefited a lot in terms of technology and products. First of all, from a product perspective, Xpeng’s current mainstream models are either pure electric family cars like the P5 or large-size SUVs like the G9. They are all relatively high-end models, at least quasi-B-class or above. Sales volume Prices are generally above 150,000 yuan, or even as high as 300,000 yuan. Such a product matrix structure allows the Xpeng brand to gain a mid-to-high-end market positioning, but it also limits its market size. In order to get rid of the current situation where the brand's sales volume in "Wei Xiaoli" often lags behind and the monthly delivery volume hovers at 10,000 units or even less as soon as possible, the brand must quickly seek to expand the product matrix to increase its user base and achieve sales increases.
It is against this background that Didi has set up a system and improved the basic model structure of Mona in the past year or two, and it has become the target of Xpeng Motors---according to data from the China Federation of Automobile Manufacturers. , in the domestic auto market in 2022, A-class sedans priced in the 100,000 to 150,000 yuan range have accounted for 50% of the total annual sales in the auto market, making them the veritable mainstream sales king. The Mona is precisely a model positioned as an A-class sedan and priced at 150,000 yuan. It is expected that with Mona’s highly complete technical architecture and the blessing of the Xpeng brand, it will not be difficult to achieve great sales after it is launched on the market in 2024. Considering that Didi also promised in this strategic cooperation agreement that it will actively recommend new cars to B-end and C-end user groups through the sales channels it has accumulated in its long-term online ride-hailing operations, Mona’s sales prospects are indeed worthwhile. Be optimistic. In short, in this strategic cooperation, Didi gained the benefits of reducing its asset burden and maintaining its influence in the car manufacturing field, while Xpeng gained the expansion of its product matrix and the effective extension of its market coverage. It is a win-win situation.
Of course, in the author's opinion, Xpeng's decision to acquire Didi's car-making project this time was not just focused on model expansion and market sales. Its more far-reaching goal is to accelerate the promotion of its own intelligent driving technology. As we all know, the Xiaopeng brand has always regarded intelligence as the main selling point and core competitiveness of the brand and products since its establishment. Looking back on the past, Xpeng was also one of the first car companies in the industry to deploy full-stack self-research on intelligent driving. Through continuous investment and accumulation, by the beginning of 2023, Xiaopeng has iterated the intelligent assisted driving system to XPliot, realizing support for high-speed NGP, parking lot memory parking and other functions.
By April 2023, Xiaopeng announced that the new generation of intelligent driving system XNGP (Xiaopeng Navigation Guided Pilo, automatic navigation assisted driving) will be officially launched. In the next step, when XNGP reaches its full form, Xiaopeng’s smart driving system will not rely on high-precision maps, and can seamlessly connect to various scenarios such as highways, cities, and underground parking lots in various cities across the country, realizing parking spaces from the starting point. Assisted driving experience with no breakpoints throughout the journey to the final parking space. In Xiaopeng’s view, XNGP is the ultimate product form for assisted driving before realizing autonomous driving. In order to promote its own advantageous intelligent driving technology in the market as soon as possible, Xiaopeng urgently needs a mainstream model with a wide audience and huge sales volume as a carrier.
The Mona, an A-class model priced at 150,000 yuan, provides Xpeng with the best platform to promote intelligent driving technology in an inclusive manner. From a hardware perspective, Mona is a highly completed, quasi-mass-produced A-class smart electric vehicle sedan model. Through a strategic cooperation agreement, Mona has also brought relevant R&D equipment and other assets to Xiaopeng, as well as some core Team members are fully prepared for the next step of operations; from a system level, Mona, with the support of Didi’s cooperation, will quickly enter the online ride-hailing market, bringing a large amount of data with complex architecture and actual operation to the company , providing a solid foundation for Xiaopeng’s more in-depth research and development of intelligent driving technology. Obviously, Mona is a good choice for Xpeng from both a market and a technical perspective. Xiaopeng will also use this strategic cooperation with Didi to achieve scale expansion and technology iteration, and then stand on a higher starting point.