XPeng Reports Fourth Quarter and Fiscal Year 2021 Unaudited Financial Results

XPeng Inc. (“XPeng” or the “Company”, NYSE: XPEV and HKEX: 9868), a leading Chinese smart electric vehicle (“Smart EV”) company, today announced its unaudited financial results for the three months and fiscal year ended December 31, 2021.

Operational and Financial Highlights for the Three Months Ended December 31, 2021

Photo credit: XPeng

Total deliveries of vehicles were 41,751 in the fourth quarter of 2021, representing an increase of 222% from 12,964 in the corresponding period of 2020 and an increase of 63% from 25,666 in the third quarter of 2021. Deliveries exceeded the monthly delivery benchmark of 15,000 units for two consecutive months in November and December 2021.

Deliveries of the P7 smart sports sedan were 21,342 in the fourth quarter of 2021, representing an increase of 150% from 8,527 in the corresponding period of 2020. The order for the P7 is continuing to gain momentum.

Deliveries of the P5 smart family sedan sustained solid ramp-up momentum following its mass-delivery launch in October 2021 and reached 5,030 in December 2021. Among the total P5s delivered in the fourth quarter of 2021, over 50% can support XPILOT 3.0 or XPILOT 3.5.

Inaugural debut of the G9 flagship smart SUV, XPeng’s fourth production model, was featured at the Guangzhou International Auto Exhibition on November 19, 2021. Official launch of the G9 is expected in the third quarter of 2022.

XPeng’s physical sales network continued rapid expansion with a total of 357 stores in operation, covering 129 cities as of December 31, 2021.

XPeng-branded supercharging stations expanded to 772, covering 308 cities across China as of December 31, 2021, offering a more comprehensive charging network.

Total revenues were RMB8,556.0 million (US$1,342.6 million) for the fourth quarter of 2021, representing an increase of 200.1% from the same period of 2020, and an increase of 49.6% from the third quarter of 2021.

Revenues from vehicle sales were RMB8,187.2 million (US$1,284.7 million) for the fourth quarter of 2021, representing an increase of 199.3% from the same period of 2020, and an increase of 49.9% from the third quarter of 2021.

Gross margin was 12.0% for the fourth quarter of 2021, compared with 7.4% for the same period of 2020 and 14.4% for the third quarter of 2021.

Vehicle margin, which is gross profit of vehicle sales as a percentage of revenues from vehicle sales, was 10.9% for the fourth quarter of 2021, compared with 6.8% for the same period of 2020 and 13.6% for the third quarter of 2021.

Net loss was RMB 1,287.2 million (US$202.0 million) for the fourth quarter of 2021, compared with RMB787.4 million for the same period of 2020 and RMB1,594.8 million for the third quarter of 2021. Excluding share-based compensation expenses, non-GAAP net loss was RMB1,198.3 million (US$188.0 million) in the fourth quarter of 2021, compared with RMB712.6 million for the same period of 2020 and RMB1,492.1 million for the third quarter of 2021.

Net loss attributable to ordinary shareholders of XPeng was RMB1,287.2 million (US$ 202.0 million) for the fourth quarter of 2021, compared with RMB787.4 million for the same period of 2020 and RMB1,594.8 million in the third quarter of 2021. Excluding share-based compensation expenses, non-GAAP net loss attributable to ordinary shareholders of XPeng was RMB1,198.3 million (US$188.0 million) for the fourth quarter of 2021, compared with RMB712.6 million for the same period of 2020 and RMB1,492.1 million for the third quarter of 2021.

Basic and diluted net loss per American depositary share (ADS) were both RMB1.51 (US$0.24) for the fourth quarter of 2021. Non-GAAP basic and diluted net loss per ADS were both RMB1.41 (US$0.22) for the fourth quarter of 2021. Each ADS represents two Class A ordinary shares.

Cash and cash equivalents, restricted cash, short-term deposits, short-term investments and long-term deposits were RMB43,543.9 million (US$6,833.0 million) as of December 31, 2021, compared with RMB35,342.1 million as of December 31, 2020 and RMB45,357.9 million as of September 30, 2021.

Photo credit: XPeng

Operational and Financial Highlights for the Fiscal Year Ended December 31, 2021

Total deliveries of vehicles were 98,155 in 2021, representing an increase of 263% from 27,041 in 2020.

Deliveries of the P7 smart sports sedan were 60,569 in 2021, representing an increase of 302% from 15,062 in 2020.

Deliveries of the P5 smart family sedan were 7,865 in 2021.

Total revenues were RMB20,988.1 million (US$3,293.5 million) for the fiscal year of 2021, representing an increase of 259.1% from RMB5,844.3 million for the prior year.

Revenues from vehicle sales were RMB20,042.0 million (US$3,145.0 million) for the fiscal year of 2021, representing an increase of 261.3% from RMB5,546.8 million for the prior year.

Gross margin was 12.5% for the fiscal year of 2021, compared with 4.6% for the prior year.

Vehicle margin, which is gross profit of vehicle sales as a percentage of revenues from vehicle sales, was 11.5% for the fiscal year of 2021, compared with 3.5% for the prior year.

Net loss was RMB4,863.1 million (US$763.1 million) for the fiscal year of 2021, compared with RMB2,732.0 million for the prior year. Excluding share-based compensation expenses and fair value change on derivative liabilities related to the redemption right of preferred shares, non-GAAP net loss was RMB4,483.1 million (US$703.5 million) in the fiscal year of 2021, compared with RMB2,991.8 million for the prior year.

Net loss attributable to ordinary shareholders of XPeng was RMB4,863.1 million (US$763.1 million) for the fiscal year of 2021. Excluding share-based compensation expenses, fair value change on derivative liabilities related to the redemption right of preferred shares and accretion on preferred shares to redemption value, non-GAAP net loss attributable to ordinary shareholders of XPeng was RMB4,483.1 million (US$703.5 million) for the fiscal year of 2021, compared with RMB2,991.8 million for the prior year.

Basic and diluted net loss per American depositary share (ADS) were both RMB5.92 (US$0.93) for the fiscal year of 2021. Non-GAAP basic and diluted net loss per ADS were both RMB5.46 (US$0.86) for the fiscal year of 2021. Each ADS represents two Class A ordinary shares.

Photo credit: XPeng

Management Commentary

Mr. He Xiaopeng, Chairman and CEO of XPeng, said, “2021 was marked by impressive growth with record-breaking fourth quarter deliveries led by our blockbuster P7 model and our newly launched P5 family sedan. For both the full year and fourth quarter, our total deliveries more than tripled year-over-year, fueled by the fast-growing EV penetration in China and our competitive Smart EV products. In addition, fast expansion of our sales and services, and supercharging stations networks and the accelerated rollout of new products are paving the way for even deeper penetration into China’s mid- to high-end market segment where robust demand for our products continues to outpace supply.”

“We are also excited about our City Navigation Guided Pilot (“CNGP”), which is being developed and fast iterated. Our objective for CNGP is to achieve superior safety and user experience in complex urban driving scenarios. The upcoming OTA of CNGP will further strengthen our technology leadership and it will mark another major milestone on our journey toward achieving full scenario autonomous driving for our customers,” Mr. He concluded.

“With accelerated deliveries across our three models, our 2021 full-year revenue exceeded RMB20 billion. Notably, we delivered remarkable growth in the fourth quarter, with revenues reaching RMB8.6 billion, up 200.1% year-over-year. Fueled by our strong vehicle models on the market, planned new launches based on new platforms, and technology leadership, we are confident in our continued growth trajectory and structural improvement of gross margin.” said Dr. Hongdi Brian Gu, Honorary Vice Chairman and President of XPeng.

Recent Developments

Deliveries in January and February 2022

Total deliveries reached 12,922 vehicles in January 2022, representing a 115% increase year-over-year. The deliveries consisted of 6,707 P7 smart sports sedans, 4,029 P5 smart family sedans and 2,186 G3 and G3i compact smart SUVs.

Total deliveries reached 6,225 vehicles in February 2022, representing a 180% increase year-over-year. The deliveries consisted of 3,537 P7 smart sports sedans, 2,059 P5 smart family sedans and 629 G3 and G3i compact smart SUVs.

As of February 28, 2022, cumulative P7 deliveries exceeded 85,000 units and total cumulative Smart EV deliveries exceeded 157,000 units.

Technology upgrade for Zhaoqing manufacturing factory

During the scheduled downtime over the Chinese New Year Holiday period starting from the end of January, the Company implemented technology upgrades for the Zhaoqing manufacturing factory and production at the Zhaoqing factory resumed in mid-February as planned. The upgrade enables accelerated delivery of its significant order backlog carried over from 2021 to early 2022.

Strong coverage of XPeng-branded supercharging network

XPeng-branded supercharging network has expanded its coverage across 337 cities in China, making XPeng the first EV auto manufacturer in China’s auto industry to reach this milestone. As of January 17, 2022, the number of XPeng-branded supercharging stations increased to 813.

Expansion in Europe

XPeng continued to expand its presence in Europe. In February 2022, the Company announced its strategic partnerships with two renowned European automobile players for agency retail collaborations in the Netherlands and Sweden, respectively. At the same time, XPeng’s first branded overseas retail experience store opened in Stockholm, Sweden.

Inclusion in the Shenzhen and Shanghai-Hong Kong Stock Connect programs

XPeng’s Class A ordinary shares, which are traded on The Stock Exchange of Hong Kong Limited, were included in the Shenzhen and Shanghai-Hong Kong Stock Connect programs in February 2022.

Addition to The Hang Seng TECH Index as a constituent stock

XPeng was included in the Hang Seng TECH Index as a constituent stock, effective on March 7, 2022. The Hang Seng TECH Index represents the 30 largest technology companies listed in Hong Kong that have high business exposure to technology themes.

Unaudited Financial Results for the Three Months Ended December 31, 2021

Total revenues were RMB8,556.0 million (US$1,342.6 million) for the fourth quarter of 2021, representing an increase of 200.1% from RMB2,851.4 million for the same period of 2020 and an increase of 49.6% from RMB5,719.9 million for the third quarter of 2021.

Revenues from vehicle sales were RMB8,187.2 million (US$1,284.7 million) for the fourth quarter of 2021, representing an increase of 199.3% from RMB2,735.4 million for the same period of 2020 and an increase of 49.9% from RMB5,460.1 million for the third quarter of 2021. The year-over-year and the quarter-over-quarter increases were mainly attributable to higher vehicle deliveries, especially for the P7 and P5.

Revenues from services and others were RMB368.8 million (US$57.9 million) for the fourth quarter of 2021, representing an increase of 218.2% from RMB115.9 million for the same period of 2020 and an increase of 41.9% from RMB259.9 million for the third quarter of 2021. The year-over-year and the quarter-over-quarter increases were mainly attributed to more service, parts and accessory sales in line with higher accumulated vehicle sales.

Cost of sales was RMB7,532.7 million (US$1,182.0 million) for the fourth quarter of 2021, representing an increase of 185.2% from RMB2,640.8 million for the same period of 2020 and an increase of 53.8% from RMB4,899.1 million for the third quarter of 2021. The year-over-year and the quarter-over-quarter increases were mainly due to the increase of vehicle deliveries as described above.

Gross margin was 12.0% for the fourth quarter of 2021, compared with 7.4% and 14.4% for the fourth quarter of 2020 and the third quarter of 2021, respectively.

Vehicle margin was 10.9% for the fourth quarter of 2021, compared with 6.8% for the same period of 2020 and 13.6% for the third quarter of 2021. The quarter-over-quarter decrease was primarily attributable to the product mix change.

Research and development expenses were RMB1,451.4 million (US$227.8 million) for the fourth quarter of 2021, representing an increase of 215.6% from RMB460.0 million for the same period of 2020 and an increase of 14.8% from RMB1,264.2 million for the third quarter of 2021. The year-over-year and the quarter-over-quarter increases were mainly due to (i) the increase in employee compensation as a result of expanded research and development staff, and (ii) higher expenses relating to the development of new vehicles models to support future growth.

Selling, general and administrative expenses were RMB2,015.4 million (US$316.3 million) for the fourth quarter of 2021, representing an increase of 119.6% from RMB917.9 million for the same period of 2020 and an increase of 31.0% from RMB1,538.4 million for the third quarter of 2021. The year-over-year increase was mainly due to (i) higher marketing, promotional and advertising expenses to support vehicle sales, and (ii) the expansion of our sales network and associated personnel cost, and commission for franchised store sales. The quarter-over-quarter increase was mainly driven by the expansion of our sales network and more sale commissions in line with higher vehicle sales.

Loss from operations was RMB2,429.7 million (US$381.3 million) for the fourth quarter of 2021, compared with RMB1,121.2 million for the same period of 2020 and RMB1,802.6 million for the third quarter of 2021. The higher year-over-year and quarter-over-quarter losses were mainly attributable to higher operating expenses to support business growth as described above.

Non-GAAP loss from operations, which excludes share-based compensation expenses, was RMB2,340.8 million (US$367.3 million) for the fourth quarter of 2021, compared with RMB1,046.4 million for the same period of 2020 and RMB1,700.0 million for the third quarter of 2021.

Fair value gain on long-term investments was RMB591.5 million (US$92.8 million) for the fourth quarter of 2021 as a result of fair value assessment on our investment in HT Flying Car Inc. (“Huitian”) after its Series A capital funding. As of December 31, 2021, the Group invested approximately RMB598.7 million and owned approximately 18.82% of the equity interest in Huitian.

Net loss was RMB1,287.2 million (US$202.0 million) for the fourth quarter of 2021, compared with RMB787.4 million for the same period of 2020 and RMB1,594.8 million for the third quarter of 2021.

Non-GAAP net loss, which excludes share-based compensation expenses, was RMB1,198.3 million (US$188.0 million) for the fourth quarter of 2021, compared with RMB712.6 million for the same period of 2020 and RMB1,492.1 million for the third quarter of 2021.

Net loss attributable to ordinary shareholders of XPeng was RMB1,287.2 million (US$202.0 million) for the fourth quarter of 2021, compared with RMB787.4 million for the same period of 2020 and RMB1,594.8 million for the third quarter of 2021.

Non-GAAP net loss attributable to ordinary shareholders of XPeng, which excludes share-based compensation expenses, was RMB1,198.3 million (US$188.0 million) for the fourth quarter of 2021, compared with RMB712.6 million for the same period of 2020 and RMB1,492.1 million for the third quarter of 2021.

Basic and diluted net loss per ADS were both RMB1.51 (US$0.24) for the fourth quarter of 2021, compared with RMB1.05 for the fourth quarter of 2020 and RMB1.89 for the third quarter of 2021.

Non-GAAP basic and diluted net loss per ADS were both RMB1.41 (US$0.22) for the fourth quarter of 2021, compared with RMB0.95 for the fourth quarter of 2020 and RMB1.77 for the third quarter of 2021.

Balance Sheets

As of December 31, 2021, the Company had cash and cash equivalents, restricted cash, short-term deposits, short-term investments and long-term deposits of RMB43,543.9 million (US$6,833.0 million), compared with RMB35,342.1 million as of December 31, 2020 and RMB45,357.9 million as of September 30, 2021.

Unaudited Financial Results for the Fiscal Year Ended December 31, 2021

Total revenues were RMB20,988.1 million (US$3,293.5 million) for fiscal year 2021, representing an increase of 259.1% from RMB5,844.3 million for the prior year.

Revenues from vehicle sales were RMB20,042.0 million (US$3,145.0 million) for fiscal year 2021, representing an increase of 261.3% from RMB5,546.8 million for the prior year. The increase was mainly attributable to higher vehicle deliveries in 2021.

Revenues from services and others were RMB946.2 million (US$148.5 million) for fiscal year 2021, representing an increase of 218.0% from RMB297.6 million for the prior year. The increase was mainly attributed to more services and parts and accessory sales in line with higher accumulated vehicle sales.

Cost of sales was RMB18,365.6 million (US$2,882.0 million) for fiscal year 2021, representing an increase of 229.2% from RMB5,578.3 million for the prior year. The increase was mainly due to higher vehicle deliveries as described above.

Gross margin was 12.5% for fiscal year 2021, compared with 4.6% for the prior year.

Vehicle margin was 11.5% for fiscal year 2021, compared with 3.5% for the prior year. The year-over-year margin improvement was primarily due to material cost reduction, better product mix and manufacturing efficiency driven by economies of scale.

Research and development expenses were RMB4,114.3 million (US$645.6 million) for fiscal year 2021, representing an increase of 138.4% from RMB1,725.9 million for the prior year. The increase was mainly due to higher employee compensation as a result of expanded research and development staff, and higher expenses relating to new vehicle model development to support future growth.

Selling, general and administrative expenses were RMB5,305.4 million (US$832.5 million) for fiscal year 2021, representing an increase of 81.7% from RMB2,920.6 million for the prior year. The increase was mainly due to higher marketing, promotional and advertising expenses to support vehicle sales, the expansion of our sales network and associated personnel cost, and commission to the franchised stores.

Other income was RMB217.7 million (US$34.2million) for fiscal year 2021, compared with RMB86.8 million for the prior year. The increase was mainly attributed to higher government subsidies which the Company received in 2021.

Loss from operations was RMB6,579.4 million (US$1,032.5 million) for fiscal year 2021, compared with RMB4,293.7 million for the prior year.

Non-GAAP loss from operations, which excludes share-based compensation expenses, was RMB6,199.5 million (US$972.8 million) for fiscal year 2021, compared with RMB3,297.3 million for the prior year.

Fair value gain on long-term investments was RMB591.5 million (US$92.8 million) for fiscal year 2021 as a result of fair value assessment on the Company’s investment in Huitian after its Series A capital funding.

Net loss was RMB4,863.1 million (US$763.1 million) for fiscal year 2021, compared with RMB2,732.0 million for the prior year.

Non-GAAP net loss, which excludes share-based compensation expenses and fair value change on derivative liabilities related to the redemption right of preferred shares, was RMB4,483.1 million (US$703.5 million) for fiscal year 2021, compared with RMB2,991.8 million for the prior year.

Net loss attributable to ordinary shareholders of XPeng was RMB4,863.1 million (US$763.1 million) for fiscal year 2021, compared with RMB4,889.7 million for the prior year.

Non-GAAP net loss attributable to ordinary shareholders of XPeng, which excludes share-based compensation expenses, fair value change on derivative liabilities related to the redemption right of preferred shares and accretion on preferred shares to redemption value, was RMB4,483.1 million (US$703.5 million) for fiscal year 2021, compared with RMB2,991.8 million for the prior year.

Basic and diluted net loss per ADS were both RMB5.92 (US$0.93) for fiscal year 2021, compared with RMB12.97 for the prior year.

Non-GAAP basic and diluted net loss per ADS were both RMB5.46 (US$0.86) for fiscal year 2021, compared with RMB7.93 for the prior year.

Business Outlook

For the first quarter of 2022, the Company expects:

Deliveries of vehicles to be between 33,500 and 34,000, representing a year-over-year increase of approximately 151.1% to 154.9%.

Total revenues to be between RMB7.2 billion and RMB7.3 billion, representing a year-over-year increase of approximately 144.0% to 147.4%.

The above outlook is based on the current market conditions and reflects the Company’s preliminary estimates of market and operating conditions, and customer demand, which are all subject to change.