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Wang Fengying's resignation rumors were dispelled, but it will be difficult for Xiaopeng Motors to return to the top

After 20 months of organizational reform, Xpeng Motors has not seen a business boom, but continues to look for a way out amid various rumors and gradually lagging sales.

On June 17, it was reported online that Wang Fengying, the second-in-command of Xpeng Motors, had submitted a letter of resignation to He Xiaopeng. Subsequently, Wang Fengying and He Xiaopeng refuted the rumor.

He Xiaopeng responded to the media, saying: "Nonsense, I was just talking about this joke with Fengying in the United States."

Wang Fengying said in her WeChat Moments: "The Chinese auto industry is becoming more and more competitive, from technology, configuration, and price to today's 'competitive public opinion'. There are all kinds of chaos and rumors. As a 30-year veteran in the auto industry, I feel particularly sad. We at Xpeng Motors firmly believe that AI will define cars and strive to lead the innovation of China's smart cars."

Since the failure of the Xpeng G9 to be launched in September 2022, Xpeng Motors has gradually been left behind by the first echelon of new forces in terms of sales. In October of that year, He Xiaopeng "scraped his bones to heal his wounds" and started a drastic organizational reform. The introduction of Wang Fengying, the former vice chairman of Great Wall Motors, a traditional automotive talent, was seen by the outside world as one of the biggest reform moves.

Since joining Xpeng Motors in early 2023, Wang Fengying has been highly regarded and given very high authority. Xpeng Motors' marketing, supply chain, product planning, sales channels and other businesses are all handled by Wang Fengying. By the end of 2022, Xpeng Motors' 12 executives were reduced to only two - He Xiaopeng and Wang Fengying.

Wang Fengying's reforms were also significant, such as the major changes in sales channels, anti-corruption in procurement, and the Jupiter Project. In addition, she also recruited Yu Tao, the former head of OPPO marketing, and Zhang Li, the former general manager of Great Wall Manufacturing, to join Xiaopeng, responsible for core departments such as sales and production.

Wang Fengying is impetuous and aggressive, and there is nothing wrong with that. But if the results are not satisfactory, then she will undoubtedly bear the responsibility.

Judging from the current market performance, Xpeng Motors has not yet regained its position as a first-tier new force. In 2023, Xpeng Motors' cumulative sales will be 141,600 vehicles, completing 70.8% of its annual target.

In 2024, Xpeng Motors' sales target is 280,000 vehicles, and its cumulative sales in the first five months were 41,360 vehicles, with a completion rate of 14.7%. If Xpeng Motors can sell 35,000 vehicles per month in the next seven months, it will be able to achieve its annual target - but this is obviously very difficult.

In contrast, Ideal and NIO, two former competitors, are still active at the top.

In May 2024, Ideal Auto delivered 35,020 new cars, a year-on-year increase of 23.8%. In the first five months, Ideal Auto delivered a total of 140,000 vehicles; NIO delivered 20,544 vehicles in May, a significant year-on-year increase of 233.8%, and delivered 66,217 vehicles in the first five months.

In addition, new forces such as Leapmotor, Zeekr, DeepBlue, and Nezha have surpassed Xpeng Motors in sales.

On the other hand, in the field of intelligent driving, which is an important moat of Xpeng Motors, the company has not demonstrated its ability to crush its competitors.

According to the 2024 China Automotive Consumer Insights Report released by McKinsey, Chinese consumers are becoming more receptive to intelligent driving systems, but their willingness to spend money on intelligent driving functions has dropped from 44% in 2022 to 36% in 2023. This means that Xpeng Motors' prospects for business expansion and monetization based on its technological accumulation in the field of intelligent driving are unclear.

From the perspective of financial performance, one of the few good news for Xpeng Motors is that its gross profit margin increased to 12.89% in the first quarter and its net loss narrowed by 41.5%.

Next, the fate of Xpeng Motors will probably depend on whether the newly launched MONA series can sell well.


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