00:00There was a very tough price war that's still going on right now, but Xpon still turned a net profit
00:07in the fourth quarter.
00:09As you're going to be spending more money, I anticipate, to roll out robotics, flying car, and, of course, all
00:18the other ventures that you're looking at,
00:21how do you pay for that, and how do you maintain profitability beyond just one quarter?
00:27When will you be profitable for a full year?
00:31I think we've observed a phenomenon here.
00:37As a technology and manufacturing company, Xpeng's R&D expenses are increasing very rapidly year by year.
00:44We're currently doing several interesting things.
00:47First, we're modularizing all our hardware and AI.
00:51Second, we're opening up our modular capabilities.
00:54For example, we're sharing hardware and software with our partners, such as Volkswagen, and we're already in talks with more
01:02partners.
01:03Third, on April 1st this year, Xpeng actually raised the prices of our high-level autonomous driving models.
01:10We firmly believe in this, and we'll share some data tomorrow.
01:15In early April of this year, the China Passenger Car Association released data showing that passenger car sales in China
01:22declined by 26% year-on-year.
01:25I can share some data from Xpeng with you.
01:29Following the launch of our new generation of autonomous driving technology, on March 31st of this year,
01:35Xpeng's sales increased by over 70% month-on-month and over 50% year-on-year.
01:43Well, let's talk about those international partnerships.
01:47I do know that you'll be unveiling your second car that you helped engineer with Volkswagen.
01:52Volkswagen has a very ambitious goal of unveiling more than 20 new EVs, including in China.
02:00So you're a key partner with Volkswagen.
02:03We're also hearing from media in Korea that Hyundai is possibly trying to seek a partnership with you for self
02:11-driving as well.
02:12So how do you see those partnerships increasing?
02:16Volkswagen has 5% stake in Xpeng now, 4.9%.
02:20Do you see that increasing as your partnership expands?
02:24Talk about that.
02:26Yes, our cooperation with Volkswagen has been very successful over the past three years.
02:32Our first collaborative vehicle, the Volkswagen ID Unix 08, has already been launched this month.
02:38We are also working with Volkswagen on the next generation of vehicles based on the VEA architecture,
02:45which will soon be available for Volkswagen China and other sectors.
02:49In fact, the cooperation between Xpeng and Volkswagen is deepening further.
02:54When we have more information to share, we will provide more details.
02:58How important to your strategy is the humanoid robotics?
03:02It's a very hot topic right now.
03:05Do you think it's a core part of your strategy?
03:09Because iron, that's your optimist equivalent, if you will, the humanoid robot,
03:15is expected to be in mass production by the fourth quarter of this year.
03:20How are you going to pay for that, and how promising is it as a business?
03:27From my perspective, I believe that high-level humanoid robots may begin mass production globally around 2026.
03:34But the true commercialization year may be 2027.
03:39I compare this to Xpeng's 2020, because in 2020, Xpeng began large-scale deliveries of its first car.
03:48I believe that the decade following 2027, the decade of commercialization for robots,
03:54will see far exceeding that of new energy vehicles in China and globally.
03:59Therefore, from another perspective, I believe Xpeng's core growth trajectory lies in two products,
04:05intelligent vehicles and high-level humanoid robots.
04:13Again, I come back to capital raising.
04:15Where will you get the capital needed for these different ventures?
04:19Are you open to possible IPOs for A-Ridge, which I guess is your flying car,
04:26or iron division with your humanoid robots?
04:29Even your AI touring chip business?
04:33Is that something that you would look at spin-offs?
04:38Many of you know that flying car is part of Xpeng's ecosystem, and it's true.
04:43They're considering IPO-related matters.
04:46I think that within Xpeng's other systems, we should maintain the status quo and continue our internal development.
04:52How do you see the domestic industry in EVs right now shaking out?
04:56You said there's going to be hyper-competition, maybe consolidation in the next four years by 2030.
05:05How does that make overseas exports more important?
05:10Have you seen an increase in demand, especially in the last few months,
05:16because of the high price of oil, because of the war in the Middle East?
05:21Yes. In the last quarter, actually, Xpeng's overseas sales increased by more than 100% year-on-year.
05:27And we are particularly pleased that our sales in France and Germany far exceeded our original expectations.
05:34In fact, unlike many companies' global sales, our sales far exceed our local production capacity.
05:39You should know that we currently have three factories globally in Europe and Southeast Asia.
05:45And even though these three factories are operating at full capacity,
05:49they are still unable to supply orders exceeding our sales capacity.
05:55Therefore, in 2026, we will continue to expand our local production capacity overseas to meet sales demand.
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