Hello ladies and gentlemen. Thank you for standing by for the first quarter 2023 earnings conference call for XPeng Inc. At this time, all participants are in listen-only mode. After management’s remarks, there will be a question and answer session. Today’s conference call is being recorded. I will now turn the call over to your host, Mr. Alex Xie, Head of Investor Relations of the company. Please go ahead, Alex.

Thank you. Hello everyone and welcome to XPeng’s first quarter 2023 earnings conference call. Our financial and operating results were issued via newswire services earlier today and are available online. You can also view the earnings press release by visiting the IR section of our website at ir.xiaopeng.com. Participants on today’s call from our management will include co-Founder, Chairman and CEO, Mr. He Xiaopeng, Vice Chairman and President, Dr. Brian Gu, Vice President of Finance, Mr. Dennis Lu, Vice President of Corporate Finance and Investments, Mr. Charles Zhang, and myself. Management will begin with prepared remarks and the call will conclude with a Q&A session. A webcast replay of this conference call will be available on the IR section of our website. Before we continue, please note that today’s discussion will contain forward-looking statements made under the Safe Harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements involve inherent risks and uncertainties; as such, the company’s results may be materially different from the views expressed today. Further information regarding these and other risks and uncertainties is included in the relevant public filings of the company as filed with the U.S. Securities and Exchange Commission. The company does not assume any obligation to update any forward-looking statements except as required under applicable law. Please also note that XPeng’s earnings press release and this conference call include disclosure of unaudited GAAP financial measures as well as unaudited non-GAAP financial measures. XPeng’s earnings press release contains a reconciliation of the unaudited non-GAAP measures to the unaudited GAAP measures. I will now turn the call over to our co-Founder, Chairman and CEO, Mr. He Xiaopeng. Please go ahead.

Hi everyone. In the first quarter of 2023, in anticipation of future competition, XPeng has focused on making significant changes. I took steps to revise XPeng’s business plan, organizational structure, and management team. Consequently, some senior management members who contributed to our initial phase have stepped down. However, we have quickly welcomed new talent with energy and entrepreneurial spirit into leadership roles through promotions and external hiring. I'm thrilled to see how well these new team members have integrated in such a short period and the remarkable changes they have initiated. I'm also encouraged by the passion and commitment of all XPeng employees to embrace transformation as if it were our first day, as we shifted our innovation focus to cost efficiency and customer satisfaction. The manufacturing industry faces challenges in reversing declining trends and establishing a positive cycle, but we've initiated reforms within ourselves to rebuild our company's foundation. This reform gives me confidence that we will perform well in each competition, create a positive product sales cycle, enhance team morale, improve customer satisfaction, and elevate our brand reputation starting in the third quarter of 2023. Despite macroeconomic difficulties and increased competition, we have seen month-on-month growth in new orders for the past four months. Notably, the demand for our newly launched P7i model's higher-end and CM versions has exceeded our expectations, outpacing our initial production capacity. The P7i has streamlined SKU specifications compared to the previous model and features a more effective go-to-market strategy. Starting in June, we will collaborate with our suppliers to significantly increase production of P7i components and accelerate deliveries of this popular model known for its attractive design and advanced features, boosting sales further. Our latest production model, the G6, debuted at the Shanghai Auto Show in April and is built on our next-generation technology platform, SEPA 2.0. Its introduction received enthusiastic feedback from attendees. The G6 offers a stylish design, spacious interior, and comes equipped with a world-class 800-volt high-voltage SIC platform and a 3C fast-charging battery, giving it an ultra-long range of up to 755 kilometers, outstanding energy efficiency, and rapid charging capability. Upon delivery, the G6 will feature XNGP, the leading advanced driver-assistance system in the industry. I’m pleased to report that media test drives of the G6 commenced last week, with feedback indicating it is significantly ahead of its competitors regarding ADAS capabilities and its efficient 800-volt platform. The G6 will officially launch in June with mass deliveries starting in July, and we anticipate it will become one of the best-selling models in China’s NEV SUV segment within the RMB 200,000 to RMB 300,000 price range. We expect this model to drive substantial growth in our delivery volume for the third quarter, significantly surpassing industry growth rates both year-over-year and quarter-over-quarter. This will represent a pivotal moment in our sales growth following our strategic and organizational changes. Furthermore, we plan to unveil a seven-seat electric MPV model, internally called X9, in the fourth quarter, along with clearer configurations for existing models to stimulate sales growth. We strongly believe that 2023 will be a turning point for the adoption of smart technology in EVs, with most potential customers recognizing its value by 2024 to 2025. At the end of March, we launched our City NGP for multiple models in Guangzhou, Shenzhen, and Shanghai through an OTA update. The feedback has been encouraging, with a mileage penetration rate exceeding 60% within the first month of the rollout, assisting users in their daily commutes. Personally, I've also begun using XNGP daily, resulting in a more relaxed driving experience. City NGP test drives are available at all XPeng stores in the relevant cities. In April, the proportion of orders for the max stream of our P7i and G9 models, as well as total orders, significantly rose to over 50%. We're also set to launch Highway NGP 2.0 in June. Developed using the XNGP framework, its code base has expanded fivefold compared to the original version and is equipped to handle complex urban driving scenarios, providing near L4 highway driver assistance. By year-end 2023, we expect manual takeovers to drop to one or fewer per 1,000 kilometers during Highway NGP use. By the end of the third quarter, we will start the national rollout of XNGP in more cities, even where high-definition maps are not available. This mass production will set a new benchmark since it is substantially more challenging than implementing Highway NGP with HD maps. Our XNGP currently mirrors the abilities of a novice driver, but with vast data sets from urban environments and robust backend systems, we plan to offer quarterly OTA updates that enhance the driving experience while integrating large language model (LLM) capabilities. I am confident that our advancements in XNGP’s functionality, scenario coverage, and cost of ownership will significantly boost sales for models equipped with this technology. Good design resonates with young consumers. Since late last year, I've taken a hands-on approach in managing the styling and design department, increasing our investment in design capabilities. We have recently welcomed several talented designers with experience in high-demand models and fostered healthy competition between our internal and external design teams to cultivate creativity. Leveraging LLM has also benefitted our design evolution. I believe these changes will position our new models and future iterations with exceptional styling both inside and out. Since the first quarter, under President Wang Fengying's leadership, we've worked to enhance our sales, marketing, and service capabilities with a strong customer-centric approach. Our focus on improving customer experience throughout the sales and service process has resulted in a noteworthy rise in our net promoter score (NPS), one of our key customer satisfaction metrics. As of April, our NPS has returned to a top-tier industry level. As we look towards the upcoming quarters, our primary goal remains the rapid acceleration of our sales and EV market share. We’re implementing measures to streamline management across our sales organization and establish a more agile middle office that can quickly respond to front-line requests. The next step involves refining our existing sales network to bolster our channel competitiveness. We aim to enhance operational efficiency in Tier 1 and Tier 2 cities while attracting high-quality dealers in Tier 3 and Tier 4 cities to elevate our product roadmap and sales ambitions for the coming years in the RMB 150,000 to RMB 350,000 market segment. We believe technology innovation and fierce competition will reshape the automotive landscape in the next three years. Success hinges not just on great product offerings and new technologies, but also on extensive cost reduction and efficient R&D and operations involvement. Our next-generation architecture, SEPA 2.0, demonstrates exceptional R&D efficiency and innovation capability. With the G6 in mass production, SEPA 2.0 signifies the technological competencies we've developed through rigorous R&D efforts over the past five years, positioning us as leaders in innovation for the next three years. We are launching products offering competitive costs and consistent customer experience based on SEPA 2.0. Our future models, which span the RMB 150,000 to RMB 350,000 segment across various types of vehicles, will be built on a collection of shared technology platforms. This will reduce future R&D cycles by 20% and allow for up to 80% component compatibility among different models, significantly lowering R&D expenditures for new models and production costs. During the second half of 2023 into 2024, we plan to create a practical strategy aiming for a 25% cost reduction by the end of 2024, with expected savings in power design, power trains, and hardware as soon as this year. With the ongoing industry revolution, I am convinced that effective cost control of both hardware and software, alongside operational and product efficiency improvements, will be crucial competitive advantages. Current competition focuses on volume, but the next competitive phase will require a comprehensive approach incorporating scale, innovation, design, cost efficiency, quality, and market reach. Regarding our cash flow, we had over RMB 34 billion in cash at the end of the first quarter of 2023. Our focus on simplifying operations allows us to concentrate R&D investments on customer-recognized needs and establish a robust long-term competitive status through our platform-centric approach. At the same time, we will continually optimize our organizational and management structures to enhance operating efficiency. With the upcoming mass delivery of the G6 and other new product launches anticipated to drive rapid sales growth, I expect significant monthly delivery increases in the third quarter compared to the second quarter. Additionally, as we aim to surpass 20,000 vehicles monthly in the fourth quarter of 2023, I foresee our operational cash flow becoming positive. In terms of guidance, we expect total vehicle deliveries to range from 21,000 to 22,000 units in the second quarter of 2023, reflecting a quarter-over-quarter growth of 15% to 21%, with revenue projected between RMB 4.5 billion and RMB 4.7 billion. Even after experiencing four challenging quarters regarding deliveries since the third quarter of 2022, I have always believed that challenges present opportunities. This situation prompted earlier reflection on how to engage effectively in the knockout stage by 2025 and advance to the semi-finals in 2027. With a more competitive array of new products and enhanced sales channels, we will realize significant sales volume growth in the third and fourth quarters of 2023. Thank you, everyone. I will now turn the call over to our VP of Finance, Mr. Dennis Lu, to discuss our financial performance for the first quarter of 2023.

Thank you Mr. He, and hello everyone. Now I would like to provide a brief overview of our financial results for the first quarter of 2023. I will reference RMB only in my discussion tonight unless otherwise stated. Our total revenues were RMB 4.03 billion for the first quarter of 2023, a decrease of 45.9% year-over-year and a decrease of 21.5% quarter-over-quarter. Revenues from vehicle sales were RMB 3.5 billion for the first quarter of 2023, a decrease of 49.8% year-over-year and a decrease of 24.6% from the last quarter. The year-over-year and quarter-over-quarter decreases were mainly attributable to lower vehicle deliveries and discontinuation of new NH vehicle subsidies. Gross margin was 1.7% for the first quarter of 2023 compared with 12.2% for the same period of 2022 and 8.7% for the first quarter of 2022. Vehicle margin was minus-2.5% for the first quarter of 2023 compared with 10.4% for the same period in 2022 and 5.7% for the first quarter of 2022. The year-over-year and quarter-over-quarter decreases were mainly explained by increased sales promotions and the expiry of new NH vehicle subsidies mentioned above. R&D expenses were RMB 1.3 billion for the first quarter of 2023, representing an increase of 6.1% from RMB 1.2 billion for the same period of 2022 and an increase of 5.3% from RMB 1.2 billion for the first quarter of 2022. The year-over-year and quarter-over-quarter increases were mainly due to higher expenses relating to the development of new vehicle models. SG&A expenses were RMB 1.4 billion for the first quarter of 2023, representing a decrease of 15.5% from RMB 1.6 billion for the same period of 2022 and a decrease of 21% from RMB 1.8 billion for the first quarter of 2022. The year-over-year and quarter-over-quarter decreases were mainly due to lower commissions paid to franchise dealer stores and lower marketing and advertising expenses. As a result of the foregoing, loss from operations was RMB 2.6 billion for the first quarter of 2023 compared with RMB 1.9 billion for the same period of 2022 and RMB 2.5 billion for the last quarter. Net loss was RMB 2.3 billion for the first quarter of 2023 compared with RMB 1.7 billion for the same period a year ago and RMB 2.4 billion for the last quarter. As of March 31, 2023, our company had cash, cash equivalents, restricted cash, short-term investments, and time deposits in total of RMB 34.1 billion. To be mindful of our earnings call, I would encourage listeners to refer to our earnings press release for more details on our first quarter financial results. This concludes our prepared remarks. We will now open the call to questions. Operator, please go ahead.

Thank you. Today's first question comes from Tim Hsaio with Morgan Stanley. Please go ahead.

My first question is about the price strategy. How should we think about XPeng’s price strategy for G6 and the upcoming models? Given the severe pricing competition, will XPeng tend to price the models more aggressively when bringing models to the market to ensure the company can stay much ahead of peers in terms of price-performance ratio, especially I think Mr. He just mentioned the group has been focused on the volume growth, or the company would prefer to leave some room for a cheaper version to follow on after the volume taking off in order to effectively respond to peers’ pricing adjustments and to better balance our near-term profitability? That’s my first question, thank you.

Thank you for your question. We have internally reviewed these two options. First, we will focus on achieving scale before looking at pricing, and we certainly anticipate maintaining stable pricing in the long term. Additionally, we will take into account the cost structure of our products, including inflation in areas like LFP batteries and other components. Considering these factors along with our cost control measures, we believe we can achieve long-term stable pricing at a more competitive level for the G6 and other upcoming models. In summary, our priority is on scale.

Tim, let me just add here - it’s Brian. I think first of all, the scale we believe will lead to better profitability ultimately, because obviously a number of costs can be amortized and reduced in a more efficient manner. Also, as you heard in our previous description, is that we aim to significantly lower the overall costs and BOM for our vehicles in the coming months or the coming year, so with better scale and our aim of achieving better cost savings on these products, I think the profitability will naturally return. That’s how we view the sequence of events in our strategy.

Got it, super clear. Thank you Brian. My second question is the supply risk. The P7i supply bottleneck will be resolved in June, but is there any indication across to the supply ramp-up to G6? In the meantime, G6 will be the first model built on the new architecture with unibody aluminum die casting. Will that result in a slower pace of production ramp-up after the June launch, so should we take that into consideration? Thank you.

Thank you for your question. G6 is different from G9 because we are well prepared for its delivery. We have allocated two months from the start of production to the final delivery. We made the announcement in January, and we expect deliveries in July. Therefore, we definitely anticipate a much faster ramp-up for G6 in Q3 compared to P7 or G9 in the past. Additionally, G6 differs from P7i in that we have a well-prepared supply chain to support future deliveries. Regarding the integrated aluminum die casting technology, it has presented challenges for the entire industry due to low yield rates. However, we have been utilizing this technology for over a year, and the development has been satisfactory. We do not expect severe challenges in using this technology for G6. Thank you.

We have a well-prepared supply chain to support future delivery. The application of integrated aluminum die casting technology has certainly posed challenges for the entire industry due to low yield rates. However, we have been utilizing this technology for over a year, and the development has been quite satisfactory. We anticipate no significant challenges in implementing this technology on G6. Thank you.

Thank you. Our next question today comes from Bin Wang with Credit Suisse. Please go ahead.

My first question is about the battery. Recently, pricing has declined, so what’s the impact on your battery sourcing and margins in the second quarter? Thank you.

Hey Bin, this is Dennis. Thank you for the question. Actually in the first quarter, we see the battery cost reduction compared with quarter four last year, we have about 5% reduction, and then in the second quarter, we see further reduction, about 10% to 12% over the quarter four last year, so that’s about 5 to 7 percentage point increase compared with quarter one. Having said that, we also have the marketing spending, available marketing spending, so in terms of material cost especially for the battery cost will improve the margin by, for example, the battery cost would account for about 40% of the total cost, so 7 percentage points would translate into 3 to 4 percentage margin improvement - that’s from the material side, but the other big chunk would be the revenue side, and that will also impact the margin as well. This is the brief answer to your questions.

Thank you. My second and last question is about the full-year volume guidance. You mentioned earlier that you were expecting approximately 30% growth this year. Are you still maintaining that target? If prices are held steady in the second half, the average monthly volume would be 22, so I’d like to know if the full-year volume target has changed. Thank you.

Thank you. My second and last question is about the full-year volume guidance. You mentioned approximately 30% growth this year. Have you kept the same target? If prices remain stable in the second half, the average monthly volume would be 22, so I'm wondering if the full-year volume target has changed. Thank you.

Thank you. My second and last question is about the full-year volume guidance. This year, you mentioned around 30% growth. Are you still targeting the same growth? If prices remain stable in the second half of the year, the average monthly volume would be 22. I would like to know if the full-year volume target has changed or not. Thank you.

Hey Bin. Regarding the volume growth, we still expect we’re going to be growing faster than market this year. Obviously, the market growth this year is going to be tempered, given what’s going on in the industry, but what we see most importantly is that the third and fourth quarters, we expect our growth will be significantly higher than the market growth, and also we believe that with the G6 deliveries starting in the third quarter, we would like to aim to achieve monthly deliveries over 15,000 vehicles per month in the third quarter as what are the targets, and then the fourth quarter, given the continuous growth and also additional model mix favorable changes, we think we can actually also target over 20,000 per month in the fourth quarter as our peak sales. These are our goals in the second half.

Thank you so much. Thank you, that’s all my questions.

Thank you. Our next question comes from Paul Gong with UBS. Please go ahead.

Thank you for taking my questions. I have two inquiries. The first is about the new order intake for the P7i and our preparation efforts. Can you provide some details on the implied order volume, such as the monthly figures, our production readiness, and an explanation for why we overestimated the G9 demand while underestimating the P7i demand? Thank you.

Thank you for your question. Regarding our supply chain preparation for P7i, we definitely faced some challenges, particularly with the supply chain and the fluctuations in the pricing of NCM batteries. However, we are well prepared now, as we expect to ramp up battery production capacity in May and June to ensure we can meet our future P7i delivery needs. Looking back over the past several quarters, the entire industry has faced difficulties in estimating deliveries and preparing for market demand due to various factors, including part supply, part costs, and the overall industry environment. Consequently, starting from Q4 and moving into Q1 this year, we've implemented more cautious and reserved guidance and estimates to collaborate better with our suppliers and narrow the gap between delivery estimates and actual capacity preparation. Going forward, we aim to optimize the alignment of future delivery estimates with our suppliers and overall production capacity to improve integration across these aspects. Thank you.

Hey Paul, regarding your question about the P7i, our order momentum has significantly outpaced our ability to increase capacity in the past few months. The average wait time for the product in our stores has stretched to over six weeks or longer. We believe that as the supply chain starts to improve by June, it will help reduce some of these wait time pressures, which in turn should generate further sales momentum. That's the situation as we see it today.

My second question is regarding the branding needs. We understand XPeng is pretty popular among young people, and right now we are facing the young people with unemployment rates over 20%, does that impact our demand, and also will you come out with MPV end of this year? Normally MPVs are either for the commercial use or for the older families, the more mature families, so how should we match the young branding needs of XPeng versus the MPV launch? Thank you.

Thank you for your question. XPeng aims to target young, tech-oriented consumers, particularly those between the ages of 25 and 35. Currently, I believe the unemployment rate for fresh college graduates is over 20%. However, I haven’t seen a report indicating that the unemployment rate for young people as a whole is at that level, which is an important distinction. Additionally, within our target demographic of 25 to 35-year-olds, we have not observed a significant impact on our sales from the overall market conditions. Regarding your second question about connecting the seven-seater MPV with younger consumers, that’s a great inquiry. We have been contemplating this internally, and by the end of this year, when we launch the new model, you can expect to hear more about our strategy. Thank you.

Thank you very much. Thank you.

Thank you. Our next question comes from Nick Lai with JP Morgan. Please go ahead.

The first question is about the sales and marketing and channel strategy. With the new model G3 ramping up in the third quarter and the new MPV starting to ramp up in the fourth quarter, can you provide more details on the new product strategy? The second question concerns the GP margin trend for the second half of the year. I understand you are not providing guidance, but how should we consider the margin level in the second half given the competition and the overall pricing and volume strategy? Thank you.

Thank you for your question. Let me address the first one. Since the end of January, when President Wang joined us, we have seen significant changes. It's been about four months, and she has implemented many improvements. For instance, we reorganized by combining the trading and sales teams, and we transitioned our large middle office into a more nimble smaller front office to enhance our agility. Additionally, we have consolidated multiple operational lines into one larger operational team that coordinates projects across various lines, which has positively impacted our net promoter score for several consecutive months. Another major update involved our marketing team, where we have focused on boosting overall efficiency through new tools, project-based operations, and a flatter organizational structure. On the sales side, we have invested in extensive training to enhance the skills of our salespeople, particularly regarding different SKUs and model variations in the market. We also anticipate significant changes in our sales and distribution channels, both in China and internationally, which we will discuss more in Q3. Furthermore, we aim to inject warmth and youthful energy into our branding, allowing for clearer positioning and recognition of XPeng. Overall, we have made numerous changes rooted in our core principles, while also giving our brand a refreshed appearance.

Nick, this is Brian. For your question on the margin, for the second quarter we think given the modest volume increase, as well as the older product mix continues to be selling, I think there’s still going to be margin pressure despite some of the battery cost savings that Dennis mentioned. But with the second half, the increased delivery volume increase with P7i, G6, as well as new MPV by the end of this year, we think the overall gross margin will improve gradually with obviously changing of this product mix. But the most significant margin increase will happen, I think next year given all these cost reduction measures, as well as further volume and scalability coming into play. That’s where we see the trend.

Yes, thank you.

Thank you. Our next question comes from Ming Lee with BofA. Please go ahead.

My first question is regarding your expectation on the reasonable listing company price in next one to two years if supply is more than demand. Will you consider to change your battery re-pricing frequency to follow closely to the spot raw material price, and also what is your current volume sales breakdown by LFP and NCM battery? Do you think that LFP battery sale cars will continue to increase?

Thank you for your question. It’s challenging to predict the future fluctuations in lithium pricing, but I believe the inflation we’re seeing is likely to be temporary, and we anticipate lower prices for this material in the second half of the year. Determining the ideal price range for lithium is difficult, but I think RMB 200,000 could be a reasonable target. Currently, we collaborate flexibly with our supplier partners, considering the inflation and market fluctuations in raw material prices when establishing our sourcing prices. This approach helps us optimize our cost structure. Looking ahead, we plan to introduce a range of technological innovations aimed at reducing battery usage while enhancing driving range. This means we'll incorporate more LFD and similar battery technologies, which will lower our raw material costs and improve product safety, ultimately providing our customers with satisfactory driving ranges.

My second question is regarding your new software, the XNGP, how it helps to increase your mall foot traffic to your stores, and besides that, since you mentioned that you will roll out the XNGP service to more than 10 cities in the second half of this year, do you think you can also get the approval from each city government very quickly or there still could be some potential bottleneck?

Hi Ming, this is Charles here. I will address the question. First of all, I think that you know that we launched the City NGP in three cities in China at the end of March, namely Shenzhen, Guangzhou, and Shanghai, so I think that’s why I think if you visit our stores in those cities, right now our customers can all drive the XNGP and also we heard that also customers actually requested to test drive the XNGP, which drives up the penetration rate of the max stream of our P7i and G9 to more than 50% in those three cities in April. We believe that as we’re rolling out XNGP to more cities and also we continue to improve our XNGP customer experience recorder and we continue to see the upside of the penetration rate of the max stream of our new models. To answer the second half of your question, I think our plan is to decouple our XNGP from HDMF starting from the end of Q3, so therefore I think that because our ability to decouple our XNGP from the HDMF, so therefore I think we are able to roll out our XNGP without the requirements of the government approval, etc., so therefore I think we are expecting that towards the end of the year, we can offer XNGP services probably more cities in China and most of these over the next couple quarters.

Thank you Charles.

Thank you. Our next question comes from Ping Yu Wu from CITIC Securities. Please go ahead.

Thank you for the question. I have a question for autonomous driving. A lot of Chinese and foreign OEMs are doing the research to produce autonomous driving. How do we see the leadership of XPeng? Also, we know that data is very important, and will the short-term sales pressure affect our technology improvement? Thank you.

Thank you for your question. I want to clarify that XNGP is quite different when used in urban environments compared to Highway NGP on highways, particularly in cities that lack high-definition maps. It’s challenging to determine how far ahead we are compared to competitors since only a few companies can claim they have similar technologies, but they are mostly limited to high-definition map scenarios. In contrast, XPeng can deploy our XNGP software in areas without such maps. We also plan to expand to 50 to 200 cities, which is a significant advancement. Typically, it takes about 12 to 18 months to move from testing to full rollout of the XNGP functionality, so reaching that milestone is challenging. I believe XPeng has strong technology architecture that supports multiple sales and data cycles within the XNGP software, and I would estimate that XNGP is about 12 months ahead of the competition on average. Regarding your second question about the importance of data to technology performance, data is indeed valuable for autonomous driving. However, given our current sales scale, adoption rates, and near-term deliveries, we believe data won’t create significant issues or differences right now. We are currently focused on vision-based data collection and expect future data collection to include language processing, which will enhance our software performance. At present, we are proficient in supporting this data processing, but in the long term, data will become increasingly important as more autonomous vehicles are deployed to contribute to our data set, although it’s hard to predict when that tipping point will occur. Thank you.

Our capabilities to support data processing are currently proficient. In the long term, data will become more significant as more autonomous driving cars are on the road contributing to the dataset. However, it's difficult to predict when the inflection point will occur. Thank you.

Thank you. Our next question today comes from Jing Chang with CICC. Please go ahead.

My first question is about, as Mr. He Xiaopeng has just mentioned, that we hope to sell more than 20,000 units per month in the first quarter, so can you help us to break down our major model structure, including the sales percentage of G6, G7, and G9? What do we think is the successful sales volume of G6 and how to further improve the sales performance of G7 and G9? My second question is about can you help us to further explain the overall product planning by 2025, so how many models are planned and the main focus price range, and what are new ideas about the premium market above RMB 300,000 and the market below RMB 150,000? Thank you.

Thank you for your question, but it's challenging to give a precise answer as it relates to our future planning. Regarding Q4, I would be satisfied if our G6 deliveries reach twice that of P7, and we aim to increase our G9 deliveries as well. Currently, we can't provide a detailed breakdown for the monthly sales target of 20,000. Looking ahead to 2025, we already have a strong pipeline and clear plans for our future lineup. I can share that we will optimize our cost structure and launch many modular developments on the same platform, expecting about 10 models in our 2025 lineup. We remain focused on the RMB 200,000 to RMB 300,000 price range as our main market segment, with only a few offerings below RMB 200,000 and above RMB 300,000. Thank you.

Thank you.

Thank you. This concludes our question and answer session. I’d now like to turn the call back over to the company for closing remarks.

Thank you once again for joining us today. If you have further questions, please feel free to contact XPeng’s investor relations through the contact information provided on our website.

Thank you. This concludes today’s conference call. You may now disconnect your lines. Thank you.