Written by Cláudio Afonso | info@claudio-afonso.com
XPeng Motors released on Thursday the Annual and Transition Report where it warns for the impact on the business after the increases in costs, disruption of supply, and shortage of components and materials.
Here’s what XPeng said
We incur significant costs related to procuring components and raw materials required to manufacture our Smart EVs. We may experience cost increases, supply interruption and/or shortages relating to components and raw materials, which could materially and adversely impact our business, prospects, financial condition and operating results. We use various components and raw materials in our business, such as steel, aluminum, as well as lithium battery cells, millimeter-wave radar, or mmWave radar, and semiconductors. The prices for these components and materials fluctuate, and their available supply may be unstable, depending on market conditions and global demand for these materials, including as a result of increased production of EVs by our competitors, and could adversely affect our business and operating results. In addition, as we continue to increase our production, we may experience shortage of certain components and materials or other bottlenecks in our supply chain.
For instance, we are exposed to multiple risks relating to lithium battery cells. These risks include:
- an increase in the cost, or decrease in the available supply, of materials used in the battery cells, such as lithium, nickel, cobalt and manganese, which would in turn result in an increase in the cost of lithium battery cells;
- disruption in the supply of battery cells due to quality issues or recalls by battery cell manufacturers; and
- the inability or unwillingness of our current battery cell manufacturers to build or operate battery cell manufacturing plants to supply the numbers of lithium cells required to support the growth of the EV industry as demand for such battery cells increases.
Our business is dependent on the continued supply of battery cells for the battery packs used in our Smart EVs. While we believe several sources of the battery cells are available for such battery packs, we have to date fully qualified only a very limited number of suppliers for the battery cells used in such battery packs and have very limited flexibility in changing battery cell suppliers.
Any disruption in the supply of battery cells from such suppliers could disrupt production of our Smart EVs until such time as a different supplier is fully qualified. There can be no assurance that we would be able to successfully retain alternative suppliers on a timely basis, on acceptable terms or at all. We have experienced supply shortages in mmWave radar, which has affected deliveries of the P5. In response to the supply shortages, we offered customers with the option to receive the P5 without mmWave radar first. Customers who accepted such option were offered with our ADAS software for free. Alternatively, customers can also wait for deliveries of the P5 with mmWave radar installed. If the supply shortages in mmWave radar persist, our business, results of operations and financial condition could be materially and adversely affected.
Furthermore, tariffs or shortages in petroleum and other economic conditions may result in significant increases in freight charges and material costs. In addition, a growth in popularity of EVs without a significant expansion in battery cell production capacity could result in shortages which would result in increased materials costs to us or impact our prospects. Substantial increases in the prices for our raw materials or components would increase our operating costs, and could reduce our margins if we cannot recoup the increased costs through increased vehicle prices. Any attempts to increase product prices in response to increased material costs could result in decrease in sales and therefore materially and adversely affect our brand, image, business, prospects and operating results, XPeng concluded.
According to XPeng’s PR Manager in Sweden, the electric vehicle maker started on Monday to hold press runs with the recently arrived XPeng P5 model. The model has a starting price of 550,000 SEK ($55,800 USD), as announced by the company on March 21, and can be configured here. XPENG P5 will be available in Denmark, the Netherlands, Norway, and Sweden.
On April 21, XPeng has revealed more specifications about its P5 model, in addition to the expected starting price in Denmark, the Netherlands, Norway, and Sweden. “Online XPENG P5 configuration and reservation with a deposit will be available from today for Denmark, the Netherlands, and Sweden—this will also be available in Norway later this spring.” — XPeng added.
XPeng is participating in the eCar Expo in Stockholm from 29 April to 1 May, where it will show its Flying Car XPeng X2 for the first time in Europe. XPeng Aeroht, the largest flying car company in Asia and also an affiliate of XPeng, is dedicated to producing the safest electric intelligent flying car for private use. At eCar Expo, Friends Arena in Stockholm, the company will also present its P5 and P7 models.
On Wednesday, the company announced that it has signed a strategic cooperation agreement with the Agricultural Bank of China (ABC) Guangdong Branch to secure a credit line of up to RMB7.5 billion for its subsidiaries and affiliates in China.
As firstly announced by EV on April 1, XPeng opened its first showroom in Denmark on April 9. The store is located in Axel Towers in the heart of Copenhagen, Denmark’s capital. After entering Norway and Sweden, the electric vehicle maker will make its debut in Denmark as soon as this month. The company delivered a total of 15,414 vehicles in March 2022, representing a 202% increase year-over-year and a 148% increase from the previous month.
Monthly delivery of the P7 smart sports sedan exceeded 9,000 in March 2022 for the first time, reaching 9,183. March deliveries also consisted of 4,398 P5 smart family sedans and 1,833 G3 and G3i smart compact SUVs. Total deliveries for the first quarter of 2022 reached 34,561 vehicles, a 159% increase year-over-year, consisting of 19,427 P7s, 10,486 P5s and 4,648 G3 and G3i SUVs.
Written by Cláudio Afonso | info@claudio-afonso.com