Investment Rating - The report maintains a "Buy" rating for the company [1] Core Views - The launch of the new model P7+ is expected to create a strong market response, with pricing set at 186,800 RMB for the long-range Max version and 198,800 RMB for the super long-range Max version [2] - The P7+ is positioned as an AI intelligent driving hatchback, featuring a spacious interior and advanced technology that aims to redefine the mainstream family sedan market [3][4] Financial Projections - Revenue forecasts for 2024 to 2026 have been revised upwards to 40.4 billion, 90.7 billion, and 152.5 billion RMB respectively, with net profit projections adjusted to -4.2 billion, 1.3 billion, and 7.4 billion RMB [5] - The report indicates a positive cycle of volume, price, and profit is beginning to accelerate [5] - The company is expected to achieve a significant increase in revenue growth rates, with projections of 31.66% in 2024 and 124.61% in 2025 [12]

Investment Rating - The report maintains a "Buy" rating for the company, with a target price of HKD 77.36, indicating a potential upside of 54.7% from the current closing price of HKD 50.00 [3][4][15]. Core Insights - The launch of the Xiaopeng P7+ at a price range of RMB 186,800 to RMB 218,800 is seen as positive, aligning with previous expectations. The P7+ is positioned as an AI vehicle, featuring advanced AI technologies and a focus on comfort and spaciousness [1][2]. - The company is expected to have a strong product year ahead, with the M03 and P7+ models likely to positively influence future releases. There is potential for upward adjustments in sales forecasts due to the market not yet pricing in the impact of range-extended vehicles [3][6]. Summary by Sections Company Overview - Xiaopeng Motors has launched the P7+ model, which is equipped with the AI Tianji 5.4.0 system and features OTA upgradeable range capabilities. The model has already seen significant demand, with over 10,000 pre-orders within 12 minutes of its launch [1]. Financial Projections - Revenue is projected to grow from RMB 26,855 million in 2022 to RMB 39,627 million in 2024, reflecting a year-on-year growth of 29.2%. However, net losses are expected to decrease from RMB 10,376 million in 2023 to RMB 4,848 million in 2024 [6][17]. - The company anticipates a significant increase in cash flow and assets, with cash and cash equivalents expected to rise from RMB 14,714 million in 2023 to RMB 24,302 million in 2024 [17]. Market Position and Strategy - Xiaopeng Motors is expanding its global presence, aiming to enter 60 countries by next year, up from 30 currently. The company has also developed the Turing AI chip, which is designed for use in AI vehicles and robots, indicating a strong focus on technological advancement [2][3].

Investment Rating - The investment rating for the company is "Buy" [2][5]. Core Insights - In October 2024, the company delivered 23,917 new vehicles, representing a year-on-year growth of 20% and a month-on-month growth of 12%. Cumulatively, from January to October 2024, the total deliveries reached 122,478 vehicles, with a year-on-year increase of 21% [2][7]. - The company expects sales for 2024, 2025, and 2026 to be 180,000, 450,000, and 670,000 vehicles respectively, with corresponding revenues of 43.6 billion, 79.3 billion, and 104.6 billion yuan, reflecting growth rates of 42%, 82%, and 32% [2][7]. - The net profit attributable to the parent company is projected to be -5.05 billion yuan in 2024, -0.5 billion yuan in 2025, and 2.3 billion yuan in 2026 [2][7]. Summary by Sections Delivery Performance - The company achieved a record high in deliveries for October 2024, with 23,917 vehicles delivered, marking a 20% increase year-on-year and a 12% increase month-on-month [2][7]. - The MONA M03 model has been well-received, with over 10,000 units delivered in its first two months [7]. Product Development - The P7+ model was launched in October 2024, with a pre-sale order exceeding 30,000 units within 1 hour and 48 minutes [7]. - The P7+ features a new pure vision solution and is equipped with end-to-end AI driving capabilities, enhancing user experience and customer retention [7]. Global Expansion - The company is accelerating its global strategy, with recent market entries in the Middle East, including the UAE, Israel, Egypt, Jordan, and Lebanon [7]. - Future plans include further expansion into Europe, ASEAN, Latin America, and Oceania [7]. Financial Projections - Revenue projections for 2024, 2025, and 2026 are 43.6 billion, 79.3 billion, and 104.6 billion yuan, with growth rates of 42%, 82%, and 32% respectively [8]. - The company anticipates a turnaround in financial performance with the launch of new models and advancements in smart driving technology [7][8].

Investment Rating - The report maintains a rating of "Buy" for XPeng Motors, indicating a positive outlook for the company's stock performance in the near term [1][5]. Core Insights - XPeng Motors achieved a record high in vehicle deliveries, with 21,352 units delivered in September 2024, representing a year-on-year increase of 39% and a quarter-on-quarter increase of 52% [1][2]. - The launch of the MONA M03 model significantly boosted sales, with over 10,000 units delivered shortly after its release, highlighting consumer demand for high-performance, cost-effective electric vehicles [4][5]. - Despite strong performance in September, XPeng Motors faces challenges in meeting its annual sales target of 280,000 units, having completed only about 35% of this goal by the end of the third quarter [2][4]. Financial Summary - Revenue is projected to grow from 30,676 million in 2023 to 51,394 million in 2024, reflecting a year-on-year growth rate of 67.54% [1][6]. - The net profit attributable to shareholders is expected to improve from a loss of 10,376 million in 2023 to a loss of 8,267 million in 2024, with a forecasted return to profitability in 2026 with a net profit of 895 million [1][6]. - The company's operating cash flow is projected to improve significantly, with a forecast of 12,567 million in 2025 and 19,721 million in 2026 [6][7]. Sales Performance - The MONA M03 model's competitive pricing and advanced features have driven its popularity, with a price range of 119,800 to 155,800 yuan and a low energy consumption rate of 11.5 kWh/100 km [4][5]. - XPeng Motors has made significant strides in international markets, particularly in Thailand and Singapore, where it has seen promising sales figures shortly after launching [4][5]. Future Outlook - The company plans to expand its product lineup with new models, including the high-end P7+, which is expected to launch in the fourth quarter of 2024, featuring advanced AI technology [5]. - XPeng Motors aims to increase its global market presence, with plans to enter at least 40 countries and regions by the end of the year, indicating a strong growth strategy [4][5].

Investment Rating - The report maintains a "Buy" rating for the company [2][8]. Core Views - The report highlights the anticipated success of the new model P7+, which is expected to continue the positive sales momentum established by the M03 model. The pricing strategy for P7+ is expected to be aggressive, with a starting price potentially below 200,000 RMB, and possibly as low as 180,000 RMB with promotional offers [1][2]. - The report projects a significant increase in sales forecasts for 2025 and 2026, raising the estimates by 35% and 27% respectively, reflecting the strong performance of M03 and the expected success of P7+ [2][6]. - The financial outlook shows a narrowing of losses due to the scale effect from increased sales and cost control measures, with revenue expected to grow significantly over the next few years [2][9]. Financial Summary - Revenue projections for the company are as follows: - 2024E: 39,627 million RMB (up 29.2% YoY) - 2025E: 61,231 million RMB (up 54.5% YoY) - 2026E: 67,665 million RMB (up 10.5% YoY) [3][9]. - Net profit forecasts indicate continued losses, but with a decreasing trend: - 2024E: (4,848) million RMB - 2025E: (2,360) million RMB - 2026E: (1,290) million RMB [3][9]. - The report also provides a detailed breakdown of the company's financial metrics, including gross profit and margins, indicating improvements in operational efficiency [6][9].

Investment Rating - The report maintains a "Buy" recommendation for Xiaopeng Motors (9868.HK) [1] Core Views - The launch of the P7+ model is crucial for the company to overcome its sales challenges, while the M03 model has already helped improve sales [7] - The P7+ model enhances the P7 family lineup, focusing on spaciousness and advanced driving capabilities, and is expected to be a significant contributor to sales [3][7] - The P7+ will feature a new generation of high-level driving assistance without additional costs, which is anticipated to reduce hardware costs by approximately 50% compared to previous models [3][7] Financial Summary - Revenue projections for 2024-2026 have been adjusted to 429 billion, 701 billion, and 950 billion CNY respectively, with net profit forecasts of -62 billion, -20 billion, and +9 billion CNY [7] - The company is expected to improve its gross margin from 1.5% in 2023 to 17.9% by 2026, indicating a positive trend in profitability [5][11] - The projected net profit margin is expected to shift from -33.8% in 2023 to 0.9% in 2026, reflecting a significant turnaround [11] Product and Market Positioning - The P7+ is positioned as a high-end electric sedan under 300,000 CNY, emphasizing family comfort and spaciousness, with a wheelbase of 3 meters and a length exceeding 5 meters [3] - The report highlights the competitive landscape, noting that Xiaopeng Motors currently lags behind competitors like Huawei, NIO, and Li Auto in terms of high-level driving assistance vehicle ownership [4][9]

Investment Rating - The investment rating for the company is "Recommended (Maintain)" [2][7]. Core Views - The launch of the new model P7+ is crucial for the company to enhance its sales and strengthen its position in the high-end electric vehicle market. The P7+ is positioned as a high-end electric sedan priced under 300,000 RMB, emphasizing spaciousness and advanced driving capabilities [4][7]. - The P7+ will feature the company's new generation of high-level driving assistance system, which is expected to reduce hardware costs significantly compared to previous models with laser radar [4][7]. - The company anticipates that the P7+ will complement the existing P7 model, targeting family users with its spacious design and comfort features [4][7]. Financial Summary - The company forecasts revenue growth from 30.68 billion RMB in 2023 to 42.93 billion RMB in 2024, and further to 70.09 billion RMB in 2025, with a projected net profit turning positive in 2026 [6][7]. - The gross margin is expected to improve from 1.5% in 2023 to 13.9% in 2024, indicating a recovery in profitability as new models are launched [6][12]. - The company’s net profit is projected to be -6.17 billion RMB in 2024, improving to -2.006 billion RMB in 2025, and reaching a profit of 898 million RMB in 2026 [6][11]. Market Position and Competition - The company currently has approximately 200,000 vehicles equipped with advanced driving systems, which is lower than competitors like Huawei and NIO, who have around 300,000 vehicles [5][9]. - The successful launch of the P7+ and the upcoming M03 Max version, both equipped with advanced AI driving systems, are expected to enhance the company's competitive edge in the smart driving segment [7][9].

Investment Rating - The report maintains a "Buy" rating for the company [1] Core Insights - In September 2024, the company delivered a record high of 21,352 vehicles, representing a year-on-year increase of 39% and a quarter-on-quarter increase of 52% [2][3] - Cumulative deliveries from January to September 2024 reached 98,561 vehicles, up 21% from 81,443 vehicles in the same period last year [3] - The company is set to launch its first AI vehicle, the P7+, on October 10, 2024, which features significant advancements in AI technology [3] - The company is expanding its presence in overseas markets, with recent launches in Spain and Portugal [3] Financial Projections - The company’s projected total revenue for 2024, 2025, and 2026 is expected to be 38.69 billion, 74.24 billion, and 109.03 billion RMB respectively, with net profits projected at -5.69 billion, -2.42 billion, and 2.72 billion RMB [2][3] - The report forecasts an EPS of 1.43 RMB for 2026, indicating a potential turnaround in profitability [3] - Key financial ratios include a projected gross margin of 13.77% in 2024 and a net profit margin of -14.70% [9]

Investment Rating - The report maintains a "Buy" rating for XPeng Inc (09868) [5] Core Views - XPeng's delivery capability is steadily improving, with September 2024 deliveries reaching a new high of 21,352 units, a 39% YoY increase and a 52% MoM increase [2][7] - The MONA M03 model, launched on August 28, 2024, exceeded expectations with over 30,000 pre-orders within 48 hours and quickly became the best-selling A-class pure electric sedan after its official launch in September [2][7] - XPeng's intelligent driving technology is progressing, with plans to achieve door-to-door autonomous driving by the end of 2024 and approach L3 autonomy by the second half of 2025 [7] - The XNGP urban autonomous driving system achieved an 83% monthly active user penetration rate in September 2024 [7] - The AI Tianji XOS 5.3.0 system was fully rolled out on September 25, 2024, bringing 32 feature updates and 38 performance upgrades [7] Financial Projections - Expected sales for 2024/2025/2026 are 180,000/450,000/670,000 units, with corresponding revenues of 43.6/79.3/104.6 billion yuan [8] - Net profit is projected to improve significantly, with estimates of -5.05/-0.5/2.3 billion yuan for 2024/2025/2026 [8] - Revenue growth rates are forecasted at 42%/82%/32% for 2024/2025/2026 [8] - The company is expected to achieve positive EBITDA of 1.9064 billion yuan in 2026, compared to -5.1072 billion yuan in 2024 [9] Market Performance - Current stock price is 55.00 HKD with a market capitalization of 104.45514 billion HKD [5] - The stock has a 52-week range of 74.30 to 25.50 HKD [5] - The company has a book value per share of 20.51 yuan and a debt-to-asset ratio of 56.04% [5] Industry Context - XPeng operates in the automotive/passenger vehicle sector [5] - The company's AI-driven strategy and new model launches are expected to drive a turnaround in financial performance [8] - Collaboration with Volkswagen could further expand XPeng's revenue and technical capabilities [8]

Vehicle Deliveries - Total vehicle deliveries for the first six months of 2024 reached 52,028 units, a 25.6% increase compared to 41,435 units in the same period of 2023[3] - Total deliveries for July 2024 were 11,145 units, bringing the cumulative total for the year to 63,173 units[5] - Total deliveries for August 2024 were 14,036 units, bringing the cumulative total for the year to 77,209 units[5] Revenue and Sales - Total revenue for the first six months of 2024 was RMB 14.66 billion, up 61.2% from RMB 9.10 billion in the same period of 2023[3] - Vehicle sales revenue for the first six months of 2024 was RMB 12.36 billion, a 55.7% increase from RMB 7.94 billion in the same period of 2023[3] - Total revenue for the first half of 2024 reached RMB 14,659,503 thousand, a 61.2% increase compared to RMB 9,096,116 thousand in the same period of 2023[34] - Automotive sales revenue increased to RMB 12,363,263 thousand in the first half of 2024, up from RMB 7,938,304 thousand in the same period of 2023[195] - The company's service and other sales revenue increased to RMB 946,026 thousand in the first half of 2024, up from RMB 730,927 thousand in the same period of 2023[195] Gross Margin and Profitability - Gross margin for the first six months of 2024 improved to 13.5%, compared to -1.4% in the same period of 2023[3] - Vehicle gross margin for the first six months of 2024 was 6.0%, compared to -5.9% in the same period of 2023[3] - Gross profit for the first half of 2024 was RMB 1,979,543 thousand, compared to a gross loss of RMB 130,359 thousand in the same period of 2023[34] Net Loss and Operating Loss - Net loss for the first six months of 2024 was RMB 2.65 billion, a significant reduction from RMB 5.14 billion in the same period of 2023[3] - Operating loss for the six months ended June 30, 2024 was RMB 3.26 billion, compared to RMB 5.68 billion for the same period in 2023[10] - Non-GAAP operating loss for the six months ended June 30, 2024 was RMB 3.23 billion, compared to RMB 5.42 billion for the same period in 2023[10] - Net loss for the six months ended June 30, 2024 was RMB 2.65 billion, compared to RMB 5.14 billion for the same period in 2023[10] - Non-GAAP net loss for the six months ended June 30, 2024 was RMB 2.63 billion, compared to RMB 4.88 billion for the same period in 2023[10] - Net loss for the first half of 2024 was RMB 2,652,571 thousand, a 48.4% decrease from RMB 5,141,610 thousand in the same period of 2023[34] - Net loss from operating activities decreased to RMB 2,652,571 thousand in 2024 from RMB 5,141,610 thousand in 2023[43] Cash and Liquidity - Cash and cash equivalents, restricted cash, short-term investments, and time deposits totaled RMB 37.33 billion as of June 30, 2024, compared to RMB 45.70 billion as of December 31, 2023[4] - Cash and cash equivalents, restricted cash, short-term investments, and time deposits totaled RMB 37.32 billion as of June 30, 2024, compared to RMB 45.69 billion as of December 31, 2023[12] - Net cash used in operating activities for the six months ended June 30, 2024 was RMB 7.39 billion, compared to RMB 6.22 billion for the same period in 2023[13] - Cash and cash equivalents decreased to RMB 14,253,645 thousand from RMB 21,127,163 thousand[30] - Net cash used in operating activities for the six months ended June 30, 2024, was RMB 7,391,612, compared to RMB 6,221,971 for the same period in 2023[62] - As of June 30, 2024, the company's cash and cash equivalents, restricted cash, short-term deposits, restricted short-term deposits, short-term investments, and the current portion of long-term deposits totaled RMB 32,118,194[63] - The company believes its current liquidity is sufficient to meet operational and contractual obligations for the next twelve months[63] Loans and Financing - Short-term bank loans in China totaled RMB 4.16 billion as of June 30, 2024, with an effective annual interest rate of 2.62%[14] - Long-term bank loans for the Wuhan manufacturing base totaled RMB 1.98 billion as of June 30, 2024, with an effective annual interest rate of 4.03%[15] - Guangzhou Pengyue Automobile Development Co., Ltd. obtained a credit line of up to RMB 2.35 billion from a group of Chinese banks for operational expenses[17] - As of June 30, 2024, the company had drawn RMB 210 million from the credit line with an actual annual interest rate of 3.61%[17] - The company completed asset-backed securitization (ABS) with proceeds of RMB 1.77 billion, with the current and non-current portions of ABS balances at RMB 580 million and RMB 220 million respectively as of June 30, 2024[17] - The company issued asset-backed notes (ABN) with proceeds of RMB 840 million, with the current and non-current portions of ABN balances at RMB 210 million and RMB 10 million respectively as of June 30, 2024[17] - The company's leverage ratio was 33.8% as of June 30, 2024, up from 30.0% as of December 31, 2023[19] - The company had capital commitments of RMB 420 million and RMB 540 million for the purchase of property, plant, and equipment for its Guangzhou, Zhaoqing, and Wuhan facilities[20] - The company had restricted cash and deposits of RMB 5.27 billion as collateral for bank loans and other obligations as of June 30, 2024[18] - The company's total assessed value of collateral for long-term bank loans was RMB 5.36 billion as of June 30, 2024[18] - The company raised net proceeds of RMB 5,019,599 from Volkswagen's strategic minority investment in December 2023[63] R&D and Expenses - R&D expenses for the first half of 2024 were RMB 2,817,200 thousand, a 5.8% increase from RMB 2,662,961 thousand in the same period of 2023[34] - R&D expenses for the six months ended June 30, 2024, were RMB 2,817,200, compared to RMB 2,662,961 for the same period in 2023[115] - Advertising expenses for the six months ended June 30, 2024, were RMB 302,064, compared to RMB 149,697 for the same period in 2023[115] - Total sales and marketing expenses for the six months ended June 30, 2024, were RMB 2,332,547, compared to RMB 2,158,450 for the same period in 2023[115] - General and administrative expenses for the six months ended June 30, 2024, were RMB 629,501, compared to RMB 771,795 for the same period in 2023[115] Subsidiaries and Investments - XPeng launched the MONA M03, a smart pure electric hatchback, in the Chinese market on August 27, 2024, with three variants, including the Max version featuring the XNGP intelligent driving system[7] - XPeng's major subsidiaries include Guangzhou Chengxing Zhidong Automobile Technology Co., Ltd., with a paid-up capital of RMB 3,222,800[51] - Guangzhou Xiaopeng Automobile Technology Co., Ltd., another major subsidiary, has a paid-up capital of RMB 6,126,316[51] - Zhaoqing Xiaopeng New Energy Investment Co., Ltd., a subsidiary focused on automobile manufacturing, has a paid-up capital of RMB 8,000,000[51] - XPeng's subsidiary, Wuhan Xiaopeng Intelligent Manufacturing Co., Ltd., is involved in manufacturing battery packs and electric drive systems[53] - XPeng's variable interest entity, Guangzhou Zhilian Internet Technology Co., Ltd., focuses on the development and operation of automotive internet networks[55] - XPeng Technology acquired 50% equity of ZhiPeng Internet of Vehicles in 2021, consolidating its financial performance under US GAAP[58] - ZhiPeng Internet of Vehicles established XinTu Technology in 2021, which acquired 100% equity of ZhiPeng Space[56] - XPeng Technology revised contracts to reflect changes in ZhiPeng Internet of Vehicles' equity and nominee shareholders in 2024[58] - YiDian Mobility, a variable interest entity, was consolidated into the company's financial statements under US GAAP[58] - XPeng Mobility acquired 50% equity of YiDian Mobility in 2021, consolidating its financial performance under US GAAP[59] - Contracts for YiDian Mobility were revised in 2024 to reflect changes in nominee shareholders[59] - As of June 30, 2024, XinTu Technology had no significant business, assets, or liabilities[56] - As of June 30, 2024, ZhiPeng Internet of Vehicles had no significant business, assets, or liabilities[58] - As of June 30, 2024, YiDian Mobility had no significant business, assets, or liabilities[59] - Guangdong Zhixuan, a variable interest entity, was consolidated into the company's unaudited financial statements as of June 30, 2024, with no significant business, assets, or liabilities[60][61] Financial Statements and Accounting - The unaudited condensed consolidated financial statements were prepared in accordance with U.S. GAAP and should be read in conjunction with the audited financial statements for the year ended December 31, 2023[64] - The financial statements include the company, its subsidiaries, and variable interest entities where the company is the primary beneficiary[65] - The company uses estimates and assumptions in preparing unaudited condensed consolidated financial statements, affecting reported amounts of assets, liabilities, revenues, and expenses[66] - Management bases estimates on historical experience and reasonable assumptions, but actual results may differ from these estimates[67] - The company's functional currency is RMB, with subsidiaries using USD or local currencies, and foreign currency transactions are translated into the functional currency at the exchange rate on the transaction date[68] - Business combinations are accounted for using the acquisition method, with goodwill recognized if the purchase price exceeds the fair value of identifiable net assets[69] - Fair value is determined based on market participant assumptions, using observable inputs as much as possible, and classified into three levels based on the significance of inputs[70] - The company uses market quotes or valuation techniques to determine fair value, with financial assets and liabilities measured at amortized cost or fair value[71] Assets and Liabilities - Total current assets decreased to RMB 44,733,118 thousand from RMB 54,521,629 thousand[30] - Total assets decreased to RMB 74,998,789 thousand from RMB 84,162,541 thousand[30] - Total current liabilities decreased to RMB 29,796,199 thousand from RMB 36,111,562 thousand[32] - Total liabilities decreased to RMB 40,993,423 thousand from RMB 47,834,014 thousand[32] - Shareholders' equity decreased to RMB 34,005,366 thousand from RMB 36,328,527 thousand[33] - Accumulated deficit increased to RMB (38,432,174) thousand from RMB (35,760,301) thousand[33] - Total equity as of June 30, 2024, was RMB 34,005,366 thousand, a 6.4% decrease from RMB 36,328,527 thousand as of December 31, 2023[38] - Total equity as of June 30, 2024, was RMB 1,731,103,684 thousand, up from RMB 1,725,402,056 thousand at the end of 2023[41] Inventory and Receivables - Total inventory increased to $5,565,776 thousand from $5,526,212 thousand, with finished goods accounting for $4,228,355 thousand[133] - Inventory write-downs to net realizable value amounted to $710,136 thousand, including $35,000 thousand due to excess raw materials from the planned discontinuation of P5 production[133] - Accounts receivable aged over 1 year decreased to $1,492,931 thousand from $2,107,934 thousand[130] - Accounts receivable, net decreased to $2,135,141 thousand from $2,689,310 thousand[128] Investments and Fair Value - Short-term financial instrument investments decreased to RMB 250,967 as of June 30, 2024, from RMB 781,216 as of December 31, 2023[83] - The company uses the cost minus impairment measurement alternative for equity investments without readily determinable fair values, adjusting based on observable price changes on a non-recurring basis[95] - Certain debt investments, including convertible bonds and preferred shares, are measured at fair value under the fair value option, with unrealized gains/losses reported in the unaudited condensed comprehensive loss statement[96] - Long-term assets are assessed for impairment when events indicate the carrying amount may not be fully recoverable, with impairment loss recognized if undiscounted cash flows are less than the carrying amount[97] - Short-term investments valued at $250,967 thousand, classified under Level 2 of the fair value hierarchy[125] - Debt investments valued at $1,224,487 thousand, classified under Level 3 of the fair value hierarchy[125] - Equity investments with readily determinable fair values valued at $85,887 thousand, classified under Level 1 of the fair value hierarchy[125] - Derivative liabilities related to contingent consideration valued at $208,974 thousand, classified under Level 3 of the fair value hierarchy[125] Warranty and Revenue Recognition - The company provides standard manufacturer warranties for all vehicles sold, with warranty provisions based on best estimates of future costs, which are subject to significant changes due to the company's relatively short sales history[98] - Revenue is recognized when control of goods or services is transferred to the customer, either over time or at a point in time, based on contract terms and applicable laws[99] - Contracts with customers may include multiple performance obligations, with the total contract price allocated based on relative standalone selling prices, using observable data or estimation methods[100] - Contract assets and liabilities are recognized on the unaudited condensed consolidated balance sheet based on the relationship between the company's performance and customer payments[101] - Revenue from electric vehicle sales includes embedded products and services such as free battery charging for 4 or 6 years or 100,000 km, extended lifetime warranty, and lifetime free charging at Xiaopeng supercharging stations[102] - Government subsidies for electric vehicle purchases in China expired on January 1, 2023, and were previously deducted from the customer's payment[102] - The company uses the straight-line method to recognize revenue for vehicle internet connectivity services and battery warranties due to limited operating history[104] - Revenue from XPILOT, the intelligent driving system, is recognized upon delivery of the smart driving features to the customer[104] - The company provides technical licensing and R&D services, with revenue recognized based on the progress of contract completion[107] - Lifetime road assistance, traffic ticket inquiry services, and other value-added services are considered non-performance obligations and account for less than 1% of the total vehicle sales price[108] - The company offered two options to 2019 G3 car owners: loyalty points valid for 5 years or an enhanced trade-in right starting from the 34th month after purchase[110] - The loyalty points are considered a separate performance obligation and are recorded as contract liabilities (deferred revenue)[110] - The trade-in right allows 2019 G3 owners to trade in their car at a fixed predetermined percentage of the original purchase price when buying a new car from the company[112] - The trade-in right is valid for 120 days and is considered part of a single transaction providing a loyalty discount[112] Government Subsidies and Other Income - Government subsidies recognized as other income amounted to RMB 352,883 for the six months ended June 30, 2024, compared to RMB 48,005 for the same period in 2023[116] - Other income, net for the first half of 2024 was RMB 352,883 thousand, a 635.3% increase from RMB 48,005 thousand in the same period of 2023[34] Share-Based Compensation and Dividends - The company uses the fair value method to account for share-based compensation, with assumptions based on management's best estimates[117] - No dividends were declared for the six months ended June 30, 2024 and 2023[118] Segment Reporting and Foreign Currency Risk - The company operates as a single reportable segment with the majority of long-term assets located in China[119] - The company is evaluating new accounting standards updates, including improvements to segment reporting and income tax disclosures, with expected adoption by December 31, 2024[120] - The majority of the company's cash and cash equivalents are held in reputable financial institutions in China and abroad[121] - The company's foreign currency risk is primarily related to overseas financing activities denominated in USD, with RMB not freely convertible[122] Property, Plant, and Equipment - Depreciation expenses rose to 864,186 thousand from 623,073 thousand, driven by accelerated depreciation on certain production facilities[137] - Property, plant, and equipment net value decreased to 10,467,934 thousand from 10,954,485 thousand, with significant depreciation and impairment charges[138] - Accumulated impairment losses increased to 112,116 thousand from 107,010 thousand, primarily due to vehicle upgrades[139] - Construction in progress increased to 968,351 thousand from 663,640 thousand, reflecting ongoing investments in manufacturing facilities[138] - Leasehold improvements decreased to 640,564 thousand from 695,972