Xpeng Inc 6-K, filed Apr 17, 2024
Xpeng Inc. (XPEV)
About this 6-K
Xpeng Inc filed this 6-K on April 17, 2024.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON D.C. 20549
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16
OF THE SECURITIES EXCHANGE ACT OF 1934
April 2024
Commission File Number: 001-39466
XPENG INC.
No. 8 Songgang Road, Changxing Street
Cencun, Tianhe District, Guangzhou
Guangdong 510640
People’s Republic of China
(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F.
Form 20-F ☒ Form 40-F ☐
TABLE OF CONTENTS
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| XPENG INC. | ||
| By: | /s/ Xiaopeng He | |
| Name: | Xiaopeng He | |
| Title: | Chairman and Chief Executive Officer | |
Date: April 17, 2024
Exhibit 99.1
XPENG Files 2023 Annual Report on Form 20-F
GUANGZHOU, China, Apr. 17, 2024 (GLOBE NEWSWIRE) — XPeng Inc. (“XPENG” or the “Company,” NYSE: XPEV and HKEX: 9868), a leading Chinese smart electric vehicle (“Smart EV”) company, today announced that it filed its annual report on Form 20-F for the fiscal year ended December 31, 2023 with the Securities and Exchange Commission (the “SEC”) on April 17, 2024. The annual report can be accessed on XPENG’s investor relations website at https://ir.xiaopeng.com.
The Company will provide a hard copy of its annual report, free of charge, to its shareholders and ADS holders upon request. Requests should be directed to ir@xiaopeng.com or Investor Relations Department at XPeng Inc., No. 8 Songgang Road, Changxing Street, Cencun, Tianhe District, Guangzhou, PRC.
About XPENG
XPENG is a leading Chinese Smart EV company that designs, develops, manufactures, and markets Smart EVs that appeal to the large and growing base of technology-savvy middle-class consumers. Its mission is to drive Smart EV transformation with technology, shaping the mobility experience of the future. In order to optimize its customers’ mobility experience, XPENG develops in-house its full-stack advanced driver-assistance system technology and in-car intelligent operating system, as well as core vehicle systems including powertrain and the electrical/electronic architecture. XPENG is headquartered in Guangzhou, China, with main offices in Beijing, Shanghai, Silicon Valley, San Diego and Amsterdam. The Company’s Smart EVs are mainly manufactured at its plants in Zhaoqing and Guangzhou, Guangdong province. For more information, please visit https://www.xpeng.com/.
Contacts:
For Investor Enquiries:
IR Department
XPeng Inc.
Email: ir@xiaopeng.com
Jenny Cai
Piacente Financial Communications
Tel: +1 212 481 2050 / +86 10 6508 0677
Email: xpeng@tpg-ir.com
For Media Enquiries:
PR Department
XPeng Inc.
Email: pr@xiaopeng.com
Source: XPeng Inc.
Exhibit 99.2
XPENG Publishes 2023 Environmental, Social and Governance Report
GUANGZHOU, China, April 17, 2024 (GLOBE NEWSWIRE) — XPeng Inc. (“XPENG” or the “Company,” NYSE: XPEV and HKEX: 9868), a leading Chinese smart electric vehicle (“Smart EV”) company, today published its 2023 Environmental, Social and Governance Report (the “Report”). The Report details how XPENG has carried forward its strategies and commitments outlined in its three ESG publications and provides updates on key initiatives and metrics.
Key highlights from the 2023 ESG report:
| • | ESG Achievements: XPENG achieved the highest possible MSCI ESG Rating of AAA. |
| • | Low carbon products: |
| • | The 141,601 smart EVs delivered in 2023 will reduce carbon emissions by approximately 1.5 million metric tonnes over their entire life cycle, compared with conventional gasoline vehicles. |
| • | XPENG G9 obtained a C-GCAP Five-star Low-Carbon Rating in 2023. |
| • | Clean energy usage: XPENG’s annual consumption of clean energy reached 23,996 MWh and its annual power generation from solar PV reached 41,071 MWh, demonstrating the strength of XPENG’s continuously optimized energy consumption structure. |
| • | Green manufacturing: XPENG was inducted into the Green Manufacturing List of the Ministry of Industry and Information Technology and awarded the title of “National Green Supply Chain Management Enterprise.” |
| • | Boosting the circular economy: XPENG established an end-to-end recycling management process for waste power batteries to promote waste resource utilization. |
| • | Excellent product quality: XPENG is ISO 9001 certified, and no vehicle recalls occurred throughout 2023. |
| • | Product safety: 3 XPENG models received the C-NCAP five-star safety rating, and 2 models received five-star safety ratings from EURO NCAP. |
| • | Technology innovation: In 2023, XPENG achieved major breakthroughs in areas such as advanced driver-assistance system (ADAS), electric drive system, smart cockpit and charging technology. As of January 2, 2024, XNGP was fully accessible to users across 243 cities in China, and its geographical coverage continues to expand. |
| • | Quality Service: XPENG’s customer satisfaction rating reached 96%. It also conducted a monthly Net Promoter Score (NPS) survey, increasing its average 2023 NPS score by 8% compared with its score in 2022. |
| • | Information Security: No information security breaches, or other cybersecurity incidents occurred throughout the year, with data and information security responsibilities in place. |
| • | Strengthened Corporate Governance: XPENG strengthened its impartial governance structure, diversifying its Board of Directors with independent non-executive directors accounting for 50% of the Board. |
| • | ESG Management: XPENG formed a three-level sustainable development governance structure of “Board of Directors - ESG Steering Committee - ESG Working Group & E/S/G/Communication Matrix Group”, effectively improving internal ESG management capabilities |
To view the full 2023 ESG Report, please visit the ESG section of XPENG’s Investor Relations website: https://ir.xiaopeng.com/esg.
About XPENG
XPENG is a leading Chinese Smart EV company that designs, develops, manufactures, and markets Smart EVs that appeal to the large and growing base of technology-savvy middle-class consumers. Its mission is to drive Smart EV transformation with technology, shaping the mobility experience of the future. In order to optimize its customers’ mobility experience, XPENG develops in-house its full-stack advanced driver-assistance system technology and in-car intelligent operating system, as well as core vehicle systems including powertrain and the electrical/electronic architecture. XPENG is headquartered in Guangzhou, China, with main offices in Beijing, Shanghai, Silicon Valley, San Diego and Amsterdam. The Company’s Smart EVs are mainly manufactured at its plants in Zhaoqing and Guangzhou, Guangdong province. For more information, please visit https://www.xpeng.com/.
Safe Harbor Statement
This announcement contains forward-looking statements. These statements are made under the “safe harbor” provisions of the United States Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as “will,” “expects,” “anticipates,” “future,” “intends,” “plans,” “believes,” “estimates” and similar statements. Statements that are not historical facts, including statements about XPENG’s beliefs and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties. A number of factors could cause actual results to differ materially from those contained in any forward-looking statement, including but not limited to the following: XPENG’s goal and strategies; XPENG’s expansion plans; XPENG’s future business development, financial condition and results of operations; the trends in, and size of, China’s EV market; XPENG’s expectations regarding demand for, and market
acceptance of, its products and services; XPENG’s expectations regarding its relationships with customers, suppliers, third-party service providers, strategic partners and other stakeholders; general economic and business conditions; and assumptions underlying or related to any of the foregoing. Further information regarding these and other risks is included in XPENG’s filings with the United States Securities and Exchange Commission. All information provided in this announcement is as of the date of this announcement, and XPENG does not undertake any obligation to update any forward-looking statement, except as required under applicable law.
Contacts:
For Investor Enquiries:
IR Department
XPeng Inc.
Email: ir@xiaopeng.com
Jenny Cai
Piacente Financial Communications
Tel: +1 212 481 2050 / +86 10 6508 0677
Email: xpeng@tpg-ir.com
For Media Enquiries:
PR Department
XPeng Inc.
Email: pr@xiaopeng.com
Source: XPeng Inc.
Exhibit 99.3
E N V I R O N M E N T A L S O C I A L G O V E R N A N C E XPeng Inc. 2023 ENVIRONMENTAL, SOCIAL AND GOVERNANCE REPORT
Contents About This Report 03 Sustainability Management, Creating a Low-Carbon Future 36 Message from the Board of Directors 04 [Feature Story] Green Products Leading Green Travel 37 Climate Governance 4 1 2023 Highlights 05 Green Production 44 About XPENG 07 Compliance Management, Creating a Solid Foundation for Development 50 XPENG History 07 Compliant Operations 5 1 XPENG’s Honors 08 Risk Control 54 Business Ethics 56 Sustainability Management 10 Creating Value and Contributing to Unified Development 57 Governance Structure for Sustainable Development 10 Employee Health and Development 58 Stakeholder Engagement 1 1 [Feature Story] Building a Sustainable Supply Chain Together 7 1 Analysis of the Importance of Sustainable Development Issues 12 Contribution to the Society 74 Excellent Products, Innovating the Future of Mobility 1 3 Appendix 7 7 [Feature Story] Continuing to explore the boundaries of the future 1 4 Key Performance Indicators 7 8 Quality Products 1 9 Content Index 8 1 Quality Services 26 Feedback Form 84 ENVIRONMENTAL SOCIAL GOVERNANCE CONTENTS 2
This report is the fourth Environmental, Social and Governance (“ESG”) About the Report report issued by XPENG (XPeng Inc., hereafter referred to as “the Company”), which aims to showcase the management, commitment, actions and achievements of the Company and its subsidiaries in sustainable development. Reporting Scope Explanation of references This report covers XPENG and its subsidiaries. The reporting period For convenience of expression and reading, “XPeng Inc.”, is from January 1, 2023 to December 31, 2023 (the “Reporting “XPENG”, “the Company”, “this company” and “we” in this report, Period”), in line with the fiscal year. The time frame for some of its all refer to XPeng Inc. and its subsidiaries. content has been extended. Unless otherwise stated, this report adopts CNY as the monetary unit. Report confirmation and approval Reporting Standards T h is re p o r t w as c o nf i r m e d by th e C o m p a ny ‘s s e n i o r management and ESG Steering Committee and approved by This report refers to the Environmental, Social and Governance the Board of Directors on March 19, 2024. (ESG) Reporting Guide in Appendix C2 of the Main Board Listing Rules of the Hong Kong Exchanges and Clearing Limited (HKEx) and the Global Reporting Initiative (GRI) Standards. This report Disclaimer was prepared in accordance with the above mentioned standard Cer tain statements in this repor t are for ward-looking requirements, following communication with the stakeholders, statements about our goals and plans for the future. These analysis of material issues, collection of relevant information, forward-looking statements are based on management’s compiling of the corresponding report, as well as management current expectations. Uncertainties and other factors may verification, in order to ensure the materiality, quantization, cause our actual results, performance or achievements to balance and consistency of its contents. be materially different from those expressed or implied by the forward-looking statements. The Company is under no In order to comply with the “Consistency Principle” in the obligation to update any forward-looking statement contained reporting principles and ensure meaningful comparison, no in this report. material change is made to the methodology or key performance indicators adopted by the Company for the year ended December 31, 2023 as compared to those for the year ended Access to this Report December 31, 2022. This report has versions in Simplified Chinese, Traditional Chinese and English. If there are any inconsistences, the Source of Information Simplified Chinese version shall prevail. This report can be viewed or downloaded on the Hong Kong Exchanges and Unless otherwise specified, the information and data cited in Clearing Market website (http://www.hkexnews.hk/), as well as this report all come from the Company’s official documents, on the Company’s official website (ir.xiaopeng.com). For any statistical and financial reports, as well as other related public inquiries or suggestions regarding this report, please contact documents. XPeng Inc. guarantees that this report is free from us using the following address: any false statements, misleading statements or major omissions, and the Board of Directors is responsible for the truthfulness and accuracy of its contents. XPeng Inc., 8 Songgang Street, Tianhe District, Guangzhou, Guangdong Province, PRC Phone: 020-6680 6680 Fax: 020-6680 6689 ENVIRONMENTAL SOCIAL GOVERNANCE ABOUT THIS REPORT 3
Message from the Board of Directors The board of directors (the “Directors”) of the Company (the “Board”) attaches great importance to sustainability management. In accordance with the requirements of the Hong Kong Exchanges and Clearing Limited (hereinafter “HKEx”) ’s Environmental, Social and Governance Reporting Guide, XPENG has established an effective environmental, social and governance (hereinafter “ESG”) mechanism, kept improving the ESG governance structure across the Company, stepped up the Board’s supervision and participation in ESG affairs of the Company, and fulfilled the corporate social responsibilities in a faithful manner in pursuit of long-term sustainable development. ESG Governance ESG Goal Management As the highest governance body of the Company, the Board In accordance with H KE x ’s Environmental , Social and assumes ultimate responsibilities for XPENG’s ESG strategies, Governance Reporting Guide as well as other internationally policies and other ESG performance, and authorizes the ESG recognized principles and practices, XPENG sets its ESG Steering Committee, headed by the President of the Company, strategy and goals, continuously keeps track of the progress to assist the Board in managing and making decisions regarding in ESG work and coordinates relevant functions to achieve ESG-related matters. The Company’s ESG Steering Committee goals. The Board will oversee and review the progress towards is responsible for overseeing the Company’s ESG goals, policies ESG goals to adapt to the latest developments of the external and strategies, discussing and reviewing the Company’s ESG environment and the Company’s businesses. goals and performance in a timely manner, and reporting to the Board on a periodic basis. At the implementation level, the Company has established an ESG Task Force dedicated to routine management and overall coordination of ESG-related matters as well as assisting the ESG Steering Committee in overseeing and reviewing work while being supervised and guided by the ESG Steering Committee. ESG Risk Management With a keen eye on the major impact that ESG risks might have on the Company, XPENG updates the Company’s ESG issues on a yearly basis in line with industry-specific ESG risks, regulatory requirements and macro-policies, as well as performs materiality assessments of the ESG issues by means of stakeholder survey, expert review and Board sessions. The Board pays attention to the prioritized list of material ESG issues and provides guidelines for the main direction of the Company’s annual ESG management. The Board has participated in the materiality assessments of identified 2023 ESG issues and reviewed and confirmed the analysis results of the 2023 materiality issues. The Company has identified and conducted the materiality assessments of related ESG issues, confirming the critical tasks in the Company’s ESG governance. ENVIRONMENTAL SOCIAL GOVERNANCE MESSAGE FROM THE BOARD OF DIRECTORS 4
2023 Highlights XPENG Creating a Green Ecosystem Sustainability management, creating a low carbon future Innovative Products Quality products, shaping the future of mobility Low carbon products Compared to conventional ICE vehicles, the electric vehicles delivered by XPENG in 2023 will reduce carbon emissions by Excellent product quality approximately 1.50 million tonnes over their entire lifecycle, advancing low-carbon transport. The Company has been ISO 9001 certified, and no vehicle recalls occurred throughout the year, proving product quality. XPENG’s G9 model obtained the C-GCAP Five-star Low-Carbon Rating in 2023. Quality assurance Green transport Throughout the year, the Company carried out 7 major quality-purposed actions, covering 493 suppliers to ensure supply Compiled the “Logistics Planning White Paper”, supporting the green transformation of logistics. chain quality. Clean energy usage Product safety Annual consumption of clean energy reached 23,996 MWh, and annual power generation from solar PV reached 41,071 MWh, 3 XPENG models received the C-NCAP five-star safety ratings, and 2 models received five-star safety ratings from EURO demonstrating our continuous optimization of energy consumption structure. NCAP, showcasing our commitment to safety standards. Technology Innovation Green manufacturing With leading software and hardware technology at its core, in 2023 XPENG achieved major breakthroughs in areas such as XPENG was selected into the Green Manufacturing List of the Ministry of Industry and Information Technology and advanced driver-assistance system (ADAS), electric drive system, smart cockpit and charging technology. As of January 2, awarded the title of “National Green Supply Chain Management Enterprise”. 2024, XNGP was fully accessible to users across 243 cities in China, and its geographical coverage continues to expand. Boosting the circular economy Information Security Established an end-to-end recycling management process of waste power batteries to promote waste resource utilization. No information security breaches, or other cybersecurity incidents occurred throughout the year, with data and information security responsibilities in place. R&D Capabilities Annual spending in product and technology R&D reached CNY 5,276.6 million; R&D personnel accounts for 40% of total employees. 727 new patents were granted during the year, adding number of total patents up to 2,683, demonstrating the Company’s innovation strength. Customer Service 100% of client complaints responded and resolved, and satisfaction rate of complaint handling reached 80.06%, proving our user-centric service attitude. Quality Service Customer satisfaction rate reached 96%, and the NPS2 survey was conducted on a monthly basis. The average NPS score in 2023 increased by 8 % compared with that in 2022, showcasing our improving brand value. Cybersecurity The Company has obtained the ISO 27001 Information Security Management System Certificate and ISO 27701 Privacy Information Management System Certificate, enhancing cybersecurity management. Note: 2.NPS (Net Promoter Score): also known as word-of-mouth, is a metric used to measure the possibility of a user referring an enterprise or service to others. ENVIRONMENTAL SOCIAL GOVERNANCE 2023 HIGHLIGHTS 5
2023 Highlights XPENG Practicing Responsible Management Compliance management, setting a solid foundation for future development Conveying Social Value Value co-creation, promoting inclusive development ESG Achievements Promoting Employment Awarded 5 employer recognition awards, ranking among the top in relevant talent attraction and employee satisfaction Achieved the world’s highest MSCI ESG Rating of AAA. surveys. ESG Management Formed a three-level sustainable development governance structure of “Board of Directors—ESG Steering Committee—Equal Opportunities ESG Working Group & E/S/G/Communication Matrix Group”, effectively improving internal ESG management capabilities. The total number of employees with disabilities reached 185, promoting working environment equality. Strengthening Corporate Governance Employee Empowerment Independent non-executive directors account for 50% of the Board of Directors, improving corporate governance. 98.6% of total employees participated in organized training sessions, the training duration averaged 15.5 hours per person, supporting employees’ self-development. Integrity Management Responsible Supply Chain Conducted more than 15,880 hours of anti-corruption training sessions, with 16,760 employee participations, promoting a 100% of suppliers signed our Suppliers’ Integrity Commitment Letter, building a high-quality partnership system. company culture of honesty and integrity. Public Welfare and Charity Cumulative donation of CNY 12.8 million to XPENG Public Welfare Foundation, striving to make positive contributions to society. Ecological and Environmental Education XPENG Green-Home Environmental Education Program has provided funding support, public welfare products, training courses and other support to 84 public welfare organizations, and was awarded “2023 CSR Case Studies” by Southern Weekly. Community Influence Established the XPENG Volunteer Service Task Force comprised of the Company’s employees and XPENG owners with total registered volunteers adding up to over 630 personnel dedicating more than 15,000 hours, fostering a harmonious community. ENVIRONMENTAL SOCIAL GOVERNANCE 2023 HIGHLIGHTS 6
About XPENG XPENG Founded in 201 5 and headquar tered in Guangzhou , By the end of 2023, the Company had established six R&D Guangdong Province, China, XPeng Inc. is a technology centers, which reside in Beijing, Shanghai, Guangzhou, company focusing on the future of mobility and dedicated to Shenzhen, Silicon Valley, and San Diego. XPENG develops in-designing, developing, manufacturing and marketing smart house its full-stack advanced driver-assistance system and electric vehicles. The Company’s mission is to drive Smart in-car intelligent operating system, taking the lead in realizing EV transformation with technology, shaping the mobility the inflection point of advanced driver-assistance system experience of the future. With continuous investment in its technology adoption and customer demand. In alliance with full-stack in-house R&D, XPENG actively builds up its core partners, XPENG will propel the large-scale adoption of technology capabilities and aims to become one of the smart electric vehicles and relevant technologies, striving leading smart EV companies in China. to become the preferred smart electric vehicle brand for Chinese consumers. XPENG History 2015 2017 2018 2019 2020 2021 2022 2023 Chengxing Zhidong founded. Entered into our Series A, Series A1, and Entered into our Series B, Series B1, and Entered into our Series C financing Commenced delivery of XPENG’s second Listed on the Stock Exchange of Hong Kong Launched the first self-operated store in Formed strategic partnership with the Series A2 financing arrangements. Series B2 financing arrangements. arrangements. Smart EV model, the P7, to customers. Limited (HKEx) (stock code: 9868). Europe. Volkswagen Group; Commenced delivery of XPENG’s first Smart Listed on the New York Stock Exchange Commenced delivery of XPENG’s third Smart Commenced delivery of XPENG’s fourth Achieved the highest MSCI ESG Rating of AAA. EV model, the G3, to customers. (NYSE) (stock code: XPEV). EV model, the P5, to customers. Smart EV model, the G9. Commenced delivery of XPENG’s fifth Smart EV model, the G6. ENVIRONMENTAL SOCIAL GOVERNANCE ABOUT XPENG 7
XPENG’s Honors XPENG Xuanyuan Award Top 10 Cars of the Year—The most users in autonomous driving Top 1 in Summer Test of range achievement 2nd place in Summer Test of range XPENG G6 campaign in one month—XPENG G6 rate and record breaker of charging power—achievement rate—XPENG P7 XPENG G9 Automotive Business Review Guinness World Records NAF (Norwegian Automobile Federation) NAF (Norwegian Automobile Federation) People’s Favorite Car of the Year in Norway—Technological Frontrunner of the Year—Guangdong Hi-tech Enterprise Association—Guangdong Hi-tech Enterprise Association -XPENG G9 XPENG G9 XPENG P5 XPENG G3i Norway People’s Favorite Denmark Auto Awards Guangdong Renowned High-tech Product Guangdong Renowned High-tech Product ENVIRONMENTAL SOCIAL GOVERNANCE XPENG’S HONORS 8
XPENG’s Honors XPENG National Green Factory—Zhaoqing XPeng Guangdong Advanced Lithium-Ion batteries Guangdong Province Specialized and Exemplary Case of Intelligent Manufacturing—Co., Ltd. (XPENG) Engineering Technology Research Sophisticated SMEs—Zhaoqing XPeng Co., Zhaoqing XPeng Co., Ltd. Center—Zhaoqing XPeng Co., Ltd. Ltd. Ministry of Industry and Information Technology Guangdong Association For Science and Technology Guangdong Association For Industry and Information Technology Ministry of Industry and Information Technology Outstanding Private Enterprise in Zhaoqing—China’s Top 500 Private Manufacturing Zhaoqing’s 2022 Top 50 Scientific and Zhaoqing Xiaopeng New Energy Investment Enterprises—Zhaoqing Xiaopeng New Energy Technological Innovators—Zhaoqing XPeng Co., Ltd. Investment Co., Ltd. Co., Ltd. Zhaoqing Municipal Committee All-China Federation of Industry and Commerce Zhaoqing People’s Government ENVIRONMENTAL SOCIAL GOVERNANCE XPENG’S HONORS 9
Sustainability Management XPENG has long upheld its sustainable development commitment by continuously improving its governance in sustainability, regularly communicating with the stakeholders and identifying material sustainability issues, consistently improving the level and practices of Composition Responsibilities its sustainability management. In 2023, XPENG became one of the two domestic automotive companies selected into the S&P Global’s Sustainability Yearbook, and was awarded the Industry’s Best Progressive Company. Board of Members of the Board â^™Assumes overall responsibility for ESG work and oversees the Company’s ESG direction and strategy; XPENG Directors â^™Identify, assess and manage any significant ESG risks in Company’s business; â^™Regularly meet and receive reports from the ESG Steering Committee and other relevant management teams; 1 Governance Structure for Sustainable Development â^™In charge of reviewing and approving the Company’s Sustainability Report and other ESG Management policies. XPENG continues to optimize its internal sustainable development governance structure. In 2023 , we renamed the “ESG Task Force” ESG Steering Led by the President of â^™ Formulate the Company’s ESG vision, goals, strategies, Committee policies, etc.; to the “ESG Working Group” and established a new “E/S/G/Communications Matrix Group” in parallel with the “ESG Working Group” to the Company, along with senior management of core â^™ Monitor the implementation of the Company’s ESG strategy, assist in the management of various ESG-related matters. As such, the Company’s sustainable development governance structure of review the progress towards the ESG goals, and provide “Board of Directors—ESG Steering Committee—ESG Working Group & E/S/G/Communication Matrix Group” was eventually formed. divisions advice regarding ESG performance; â^™ Assess ESG related risks and opportunities and provide reports on ESG progress and relevant advices to the Board on a yearly basis; ESG Steering Committee â^™ Review the Company’s ESG reports and other ESG related Chairperson: President information disclosures. Members: Senior Management of Core Divisions ESG Working Group Environmental Social Governace Communications Led by mid-level management ESG Working â^™ Responsible for the daily execution of ESG strategies set Group & E/S/G/ of core departments forth by the Board and the ESG Steering Committee; Communications â^™ Ongoing follow-up on the ESG requirements from regulators, Team Leader: Vice President Coordinating green operations, Coordinating quality and safety Coordinating governance structure, C o o r d i n a t i n g E S G r e l a t e d Matrix Group investors and stakeholders; Team Members: E/S/G/ responding to environmental control, XPENG Public Welfare compliance, risk management and communication issues Communications Team Head and Core regulations, green finance and other Foundation, employee growth and other related governance issues. â^™ Timely reporting on ESG performance, preparing ESG Working Group Members related matters. care, and other realted social issues . reports, and assisting the ESG Steering Committee in carrying out supervision and assessment. PICs of all related departments PICs of all related departments PICs of all related departments PICs of all related departments ENVIRONMENTAL SOCIAL GOVERNANCE SUSTAINABILITY MANAGEMENT 10
2 Stakeholder Engagement Stakeholder engagement is crucial for us to ensure our ESG management. We establish close ties with stakeholders through multi-pronged communication mechanisms, protecting stakeholders’ rights to information and participate, and integrate stakeholder Stakeholders Key Concerns Communication Methods expectations gathered into the Company’s operations, working together with all stakeholders to achieve sustainable development. Government and regulatory • Compliant operations • Government-enterprise symposium authorities • Tax compliance • Information filing • Energy saving and emission reduction XPENG Customers • Product quality • Online promotion • Service experience • Offline exhibitions and promotional activities • Information Security and Privacy Protection • WeChat public account • Product launch • Market research • Customer satisfaction survey Employees • Legitimate rights and interests • Townhall meeting • Compensation and benefits • Employee training • Training and Education • Internal and external websites • Occupational Health and Safety • Diversity and equal opportunities Investors • Corporate Governance • General Meeting of Shareholders • Return on investment • Roadshows • Risk management • Regular information disclosure • Transparent disclosure • Email and phone inquiries Partners • Supply chain management • On-site investigation • Cost Control • Supplier meetings and audits • Fair competition • Supplier Contracts and Agreements • Supplier training Community • Rural revitalization • Participating in community projects • Assistance for disadvantaged groups • Social welfare activities • Environmental protection • Low carbon awareness-raising activities Media and NGOs • Information disclosure • Press conference • Media interaction • Media briefings • Contributions to NGOs • Impact on sustainable development ENVIRONMENTAL SOCIAL GOVERNANCE SUSTAINABILITY MANAGEMENT 11
3 Materiality Assessment to Identify Sustainability Topics Key issues We value stakeholder opinions and expectations. Through active communication and proactive research, we receive the opinions and Highly important issues suggestions of various stakeholders, identify important ESG issues and disclose the progress in managing relevant issues in the ESG report. Important issues Product Quality and Safety XPENG’s materiality assessment is mainly divided into the following stages: XPENG stakeholders to Business Ethics Based on the original list of important issues, we identify and classify 01 Information Security material issues for the reported year and build a database based on the and Privacy Protection Identifying the Material Issues Supply Chain Customer Service and Satisfaction Environmental following five aspects: national policies, company development plans, ESG Occupational Health Management disclosure standards, ESG rating indicators for the capital market, and peer and Safety Climate Change Governance issue bench-marking. Importance Green Technology Diversity and Equal Opportunity and Products Social Technological Innovation 02 Feedback is gathered from Directors, management, employees, customers, and Intellectual Property Rights investors, partners, media, the public and other stakeholders in daily operation Resource Efficiency Labor Management Stakeholder Communications regarding XPENG’s sustainable development as the basis for screening material issues. The Board participated in the screening, evaluation and supervision Corporate Governance processes regarding material issues, and several directors filled out materiality analysis questionnaires to provide feedback on the issues and suggestions Emissions management related to ESG management. Employee Training and Development According to the materiality principle, the survey results are statistically 03 Corporate Citizenship and Philanthropy analyzed, and each issue is given a different weight according to the degree Materiality Assessment and Review of risk. These issues are classified into two dimensions, “importance to the Company’s development” and “importance to stakeholders,” and lined up in Risk and Crisis Management order of degree of materiality, respectively, leading to a materiality mapping Water Resource Management matrix. The mapping results are reviewed and evaluated by the Company’s management and external professionals. 04 We design and implement action plans on materiality issues, highlighting the disclosure of relevant information in the report. XPENG’S 2023 ESG Importance to Company’s development Materiality Disclosure REPORT MATERIALITY MATRIX ENVIRONMENTAL SOCIAL GOVERNANCE SUSTAINABILITY MANAGEMENT 12
01 Excellent Products, Shaping the Future of Mo b i l i t y Introduction XPENG has always been adhering to its brand vision of “Explorer of Future Mobility” and is committed to leveraging technology to evolve the public’s smart mobility. In ongoing efforts to explore, we maintain our leadership in technology and leverage high-quality products and services to drive the transformation of mobility towards a smarter, higher dimensional, and lower carbon future. 5,276.6Million CNY 40% 727 Investment product Percentage of R&D New patents granted. and technology R&D . total employees. E XP LOR E R O F F U T U R E M O B I L I T Y ENVIRONMENTAL SOCIAL GOVERNANCE EXCELLENT PRODUCTS, SHAPING THE FUTURE OF MOBILITY INTRODUCTION 13
[Feature story] Continuing to explore the boundaries Achievements in Innovation of the future 01 Intelligent Driving Mass rollout of XNGP ADAS that operates independently of HD map coverage in urban areas XPENG regards its technological leadership as the Company’s core competitive strength and brings together a number of “X” XNGP ADAS for urban driving will enable XPENG to be “the first one to enter technologies. We closely follow market demand dynamics and lead China’s automotive technology advancements by developing the second half of the EV race.” With map-lite design, XNGP for urban driving innovative products, cultivating R&D talents, and expanding our business in innovative fields. operates independently of high-definition (HD) maps. As of January 2, 2024, XNGP for urban driving is now fully accessible to users across 243 cities nationwide, and its geographical coverage continues to expand. XBrain, the ultimate architecture for all-scenario intelligent driving XPENG XBrain primarily comprises a deep vision-based neural network, XNet2.0, and the neural network-based planning and control system, XPlanner, amongst other modules. It boasts an industry-leading three-network-in-one perception architecture and continuous time series analysis capabilities. 1 Achievements in Technology Innovation It is the industry’s first perception architecture powered by large-scale models with spatiotemporal understanding capabilities. XPENG works closely with industry partners on research and development, and is committed to applying the latest research and development outcomes into actual products to enhance user experience and promote the advancement of the smart electric vehicle industry. At the same time, we are also actively collaborating with upstream and downstream enterprises in the value chain to jointly 02 Smart Cockpit create an open and win-win smart commute ecosystem to provide users with more convenient and smarter mobility solutions. “Xiao P” Voice Assistant integrated to XGPT Lingxi Large Language Model, and launch of the next-generation smart cockpit system, XOS Tianji First launched alongside the X9 launch, XOS Tianji is XPENG’s next-generation smart cockpit system, equipped with an all-new visual design and high-efficient interaction capabilities. The system supports multi-tasking operations, coupled with XDock-enabled custom editing and zero-level interaction with common functions. In addition, XPENG introduced the full-scenario perception SR to make accessible to a full spectrum of driving scenarios, improve driving safety. In terms of voice assistant system, XPENG has taken the lead in bringing voice interaction into the era of large language models, upgrading Xiao P AI voice assistant system and improving its perception and inference capabilities. Also, we plan to enable remote control of cars through mobile Apps for intelligent driving and voice interaction, driving efficiency improvement across various business operations. 03 Charging Technology Fast charging: XPENG S4 ultra-fast charger outputs a maximum of 480kW/670A, allowing users to enjoy high-quality fast charging. Safety: Equipped with batteries featuring outstanding fast charging capabilities, the 800V high-voltage platform ensure a safe, reliable fast charging experience. User-centric: Our S4 ultra-fast charging piles prioritize user experience. Through the S4 ultra-fast charging facilities, XPENG has reduced its car owners’ time spent on start charging to 15 seconds. In other words, charging can be initiated in as fast as 15 seconds once plugging in the cable, and no need to manually monitor after plug-in, making the charging process more efficient. High quality: XPENG’s charging capabilities are focused on providing users with an “efficient, intelligent, and heart-warming” energy replenishment system, and continues to expand its self-operated supercharging network. ENVIRONMENTAL SOCIAL GOVERNANCE EXCELLENT PRODUCTS, SHAPING THE FUTURE OF MOBILITY INTRODUCTION 14
04 Electric Drive System Higher efficient electric drive system XPENG’s industry-leading next-generation electric drive system adopts a higher efficient electromagnetic solution, with an overall efficiency exceeding 93% when traveling at high speeds of 120km/h. In addition, our further optimized silicon carbide solution reduces key costs by 50% while ensuring power efficiency, allowing users to enjoy higher performance products at better prices. 05 On-board Computing Center The first on-board computing center integrated into cockpit system, improving performance by 50% XPENG released its first on-board computing center integrated into cockpit system, equipped with the XEEA3.5 electrical/electronic architecture as well as numerous functions. It improves our product performance by 50% and reduces costs by 40%, gearing towards the future of autonomous driving and general artificial intelligence. 06 Flying Car _“Land aircraft carrier” explores new low-altitude air mobility use cases XPENG AEROHT has identified two paths for flying cars development: the all-in-one flying car, and a modular vehicle for both ground driving and air travels. The all-in-one model optimizes the exterior design for lowering wind resistance. The modular model, on the other hand, can meet personal travel needs as well as supports public purposes, expanding the boundaries of mobility. 07 Smart Robots Bipedal robot featuring tactile sensing capabilities developed in-house XPENG Robotics have launched a new bipedal robot developed in-house. The robot boasts top-notch walking and obstacle-crossing skills, equipped with humanoid arms and dexterous hands which enable it to grasp objects in different shapes, while having tactile sensing capabilities. ENVIRONMENTAL SOCIAL GOVERNANCE EXCELLENT PRODUCTS, SHAPING THE FUTURE OF MOBILITY INTRODUCTION 15
Industry Cooperation Building on its industry-leading technology capabilities, XPENG is committed to fostering in-depth cooperation within the industry to jointly promote the development of smart electric vehicle industry. We believe that by sharing resources, technology, and experience we will create better products and services and provide customers with a safer, more comfortable and more convenient mobility experience. XPENG Case Study XPENG and the Volkswagen Group form a long-term strategic partnership On July 27, 2023, XPENG announced that the Company and Volkswagen Group entered into a framework agreement on strategic technical collaboration. XPENG and the Volkswagen Group will jointly develop two B-class electric vehicles and explore more cooperation opportunities in multiple areas, including collaboration on next-generation electric vehicle platforms, software technology and supply chain. At the same time, the Volkswagen Group made a strategic minority investment in XPENG and signed a share purchase agreement. The two parties will establish a long-term strategic partnership and jointly explore the future of smart electric vehicles. Case Study XPENG and Didi reach strategic cooperation On August 28, 2023, XPENG announced that the Company and Didi reached a strategic cooperation to jointly promote the adoption of smart electric vehicles and accelerate progress towards “technology inclusion, intelligence equality.” This strategic cooperation centers on an A-class smart electric vehicle that will be rolled out to mass market as the initial product under a new brand of XPENG. This cooperation will bring XPENG to the next phase of multi-brand development, strengthening its technological competitiveness in the A-class market, and leading a new era of smart EV. ENVIRONMENTAL SOCIAL GOVERNANCE EXCELLENT PRODUCTS, SHAPING THE FUTURE OF MOBILITY INTRODUCTION 16
2 R&D Systems and Technology Roadmap 3 R&D Talent Cultivation and Incentives XPENG continues to optimize its product R&D systems, increase R&D investment and conducts in-depth research of market trends and In order to strengthen the Company’s foundational research findings and keep up with the industry’s forward-looking research trends, XPENG customer needs to guide strategies for R&D and innovation. The Company sets a clear R&D strategy, by deploying international R&D continues to deepen the construction of its R&D talent team, ensuring sufficient reserves of high-quality R&D talents. The Company’s founders centers and task forces as well as improving innovation incentives and IP protection measures. It is committed to maintaining its leading and senior management team consist of well-seasoned technical experts across various industries, providing XPENG with solid talent support. position in smart electric vehicle technology development and product innovation, creating more possibilities for the future of mobility. For 2023, the Company’s R&D team had a total of 5,401 personnel, accounting for 40% of the Company’s total employees. In 2023, we made significant investments in research on energy saving, power reduction and range extension, among other areas of intelligent driving, charging technology, electrical/electronic architecture and more. In 2024, XPENG plans to invest more than CNY 6 XPENG attaches great importance to R&D and innovation, and incorporates R&D achievements into employee performance evaluations billion in technology research and development. that has effects on remuneration. For employees who have made outstanding contributions in the field of intellectual property such as patented inventions and software works, we provide generous bonus incentives along with employee awards such as Outstanding Inventor Award. Every quarter, we publish ranking in terms of patent applications and inventor credit ranking, aiming to stimulate XPENG employees’ innovative vitality in a concert effort to propel the Company’s technology advancement. Indicators 2020 2021 2022 2023 R&D Investment (CNY million) 1,725.9 4,114.3 5,214.8 5,276.6 Number of R&D positions 2,063 5,271 6,313 5,401 R&D investment as a percentage 29.5 19.6 19.4 17.2 of revenue (%) XPENG adheres to the R&D strategy of “Leading in China and expanding globally”, advancing innovations in autonomous driving, intelligent connectivity and core automotive systems through its leading integrated software and hardware technologies to lead the way to reshape the future of mobility. As China’s pioneer in in-house development of full-stack autonomous driving technology, we have successfully enabled ADAS functions on mass-produced vehicles for highway and urban driving scenarios. As of the end of 2023, XPENG has already established 6 R&D centers in Guangzhou, Shanghai, Silicon Valley, San Diego, among others, and gradually built out its R&D systems that take the lead in China with global reach. ENVIRONMENTAL SOCIAL GOVERNANCE EXCELLENT PRODUCTS, SHAPING THE FUTURE OF MOBILITY INTRODUCTION 17
In 2023, XPENG 4 Intellectual Property Protection XPENG complies with laws and regulations such as the Patent Law of the People’s Republic of China, the Trademark Law of the People’s Republic of China, and the Copyright Law of the People’s Republic of China. The Company continuously improves its intellectual property 727 16 95 management framework, and has issued the “Rules and Policy for Intellectual Property Protection” and “ Measures for Management of Intellectual Property Work”, “Measures for Management of Patent Work” and other company policies, and further revised the “Measures Obtained patents Obtained copyrights Obtained trademarks for Management of Intellectual Property Work “ in 2023 to strengthen the protection of the Company’s trademarks, patents, copyrights and other intellectual property rights. The intellectual property task force under the legal department is dedicated to the Company’s intellectual property matters. At the same time, the intellectual property management system is integrated into the Company’s Feishu system. Patents, trademarks, copyrights and domain name-related work can be managed through the intellectual property management system, ensuring the development of intellectual property in an effective and efficient way. In addition, relevant employees must fully sign the “Confidentiality and Non-Competition Agreement” and the “Intellectual Property Ownership Agreement” to protect business secrets. The Company had no intellectual property infringement disputes in 2023. In 2023, XPENG obtained 727 new patents in key technological fields such as autonomous driving, intelligent connectivity, vehicle development, and battery, motor and electrical control systems. As of the end of 2023, XPENG has obtained a total of 2,683 patents. XPENG â^™In 2023, the Company revised the “ Measures for Management 01 of Intellectual Property Work “ to improve the process of Protection Mechanism intellectual property application and relevant reward distribution. â^™In 2023, the Company established an intellectual property infringement feedback mechanism, actively monitoring infringement clues in the markets by various means, and initiating rights protection projects after legal department’s assessment to comprehensively protect our own intellectual property rights. â^™Throughout the process of vehicle development, we incorporate 02 audit review valve points in the analysis of infringement risks of Infringement Risk Screening planned patents to create an audit valve point report. â^™In terms of regular technology development, the Company’s legal department assists R&D personnel in screening infringement risks and provides relevant risk assessment suggestions. â^™In terms of supplier cooperation, we require suppliers to sign non-infringement commitment terms and conduct internal evaluations. â^™In 2023, XPENG provided 11 intellectual property training 03 sessions for legal and R&D personnel, covering strategies Specialized Training in rights protection, general knowledge, technical briefing writings and patent risk analysis, etc., to enhance employees’ professional capabilities in the field of intellectual property. â^™The Company carried out awareness-purposed online and offline activities on the World Intellectual Property Day to enhance employees’ intellectual property awareness. â^™The Company invited the Patent Examination Cooperation Guangdong Center and domestic and foreign partner law firms to conduct 4 trainings for internal patent staff to enhance employees’ skills and knowledge in patent work. ENVIRONMENTAL SOCIAL GOVERNANCE EXCELLENT PRODUCTS, SHAPING THE FUTURE OF MOBILITY INTRODUCTION 18
1.1 Quality Products 1.1.1 Product Series3 XPENG consistently prioritizes product quality and safety and is committed to providing consumers with high-quality products. XPENG Through strict quality control systems and advanced production processes, we ensure that each vehicle meets high quality standard requirements. At the same time, the Company attaches great importance to the research, development and QC X9 testing on product safety performance and adopts advanced safety technology and equipment to provide passengers with all-round protection. XNGP full-scenario advanced driver-assistance system 800V high-voltage ultra-fast charging platform First launch of XPENG’s latest XOS Tianji smart cockpit system G9 XNGP full-scenario advanced driver-assistance system 800V high-voltage ultra-fast charging platform Advanced double-chamber air suspension & four-wheel drive torque distribution system G6 XNGP full-scenario advanced driver-assistance system 800V high-voltage ultra-fast charging platform First production model based on SEPA2.0 Smart Electric Platform Architecture P7i XNGP full-scenario advanced driver-assistance system Premium coupe curve design & scissor door design Advanced four-wheel drive torque distribution system, offering multiple driving modes P5 Industry-leading advanced driver-assistance system X Robot Face dynamic smart aesthetics design X-Safety comprehensive active and passive safety, X-HP smart thermal management system Note: 3. Certain features of the models may vary according to the configuration. Please refer to the actual configuration of the products. ENVIRONMENTAL SOCIAL GOVERNANCE EXCELLENT PRODUCTS, SHAPING THE FUTURE OF MOBILITY INTRODUCTION 19
1.1.2 Product Quality Quality Management System XPENG continues to heighten its quality management standards. In the development process of vehicle powertrain system, we fully XPENG has established a company-wide Product Safety Management Committee, which is chaired by the President of the Company comply with the laws and regulations of the European Union and strictly comply with the requirements of WLTP4. We have formulated a and comprises of each head of tier-1 departments. The Committee has set up a Product Safety Management Office to promote the series of management procedures such as the Process Quality Control Procedures and the Vehicle Inspection and Control Procedures to implementation of various decisions and conduct day-to-day management, including the establishment and ongoing improvement of determine the standardized process of quality management and the quality control responsibilities of each department, aiming to steadily product quality and safety systems and mechanisms, and the arrangements of employee safety and quality training. In addition, the improve product quality. The Company has set quality standards in the field of supplier quality engineering (SQE), encompassing five Company has established an internal product safety working group in charge of multiple special fields to standardize internal processes, major sub-sectors and a total of 30 sub-targets. At the same time, we formulated the annual SQE progressive plan and conducted monthly forming a joint working mechanism. The responsibilities of the working group include identifying product safety technical requirements, performance follow-up. In 2023, XPENG P7/P7i and XPENG G9 obtained WVTA certification. On November 15, 2023, XPENG G9 was standardizing safety design, strengthening operation data analytics and mining, conducting problem analysis and solving, and propelling awarded as the 2023 Automotive Disciplined Innovator. toward product safety goals, etc., to improve XPENG’s product quality and safety. We have formulated internal management systems such as “XPENG Channel Operation Management Regulations”, requiring dealers to strengthen vehicle quality control to ensure vehicle safety and integrity of vehicles with corresponding certificates, toolkits and quality control of vehicles. XPENG 01 After the vehicles for delivery arrive at the store, dedicated personnel will be responsible for conducting spot checking and inspection on a Warehouse management of vehicle products case-by-case basis, including appearance/interior decoration/function/ chassis/vehicle registration certificate, etc., and recording any relevant information in the system. 02 Assign a respective category determined according to the cause of the quality loss, where the identified issue is systematically recorded Quality damage treatment of vehicle products by dedicated personnel and handled according to the corresponding processes. 03 Designated personnel will check the vehicle status according to the prepared delivery list to ensure that the vehicle delivery standards are met. Outbound inspection of vehicle products In 2023, the Company carried out a comprehensive management upgrade of the quality management system. By strengthening the integration and merge between different systems, the product quality management was focused on reaching a new level of quality control. Guangzhou Xiaopeng Motors Technology Co., Ltd. has obtained the ISO 9001 Quality Management System certification, covering the full-spectrum processes across research, production and sales. CQC A ISO 9001 Zhaoqing Xiaopeng New Energy Investment Co., Ltd. XPeng Inc . has obtained the ISO 9001 Quality obtained CQC Class A Enterprise Qualification Management System Certificate. Note 4.WLTP, World Light Vehicle Test Procedure ENVIRONMENTAL SOCIAL GOVERNANCE EXCELLENT PRODUCTS, SHAPING THE FUTURE OF MOBILITY INTRODUCTION 20
Quality Management Objectives Product Quality Assurance In accordance with the “Quality Objective Management Procedure”, XPENG delegates the annual first-tier quality targets into various In response to quality issues, we comprehensively conduct problem analysis across systems, R&D, manufacturing, supply chain and relevant centers and departments, clarifying monitoring frequencies and reward and punishment rules to ensure that the targets are other operation areas, carrying out special research projects, identifying weak links in management, and formulating corresponding closely linked to organizational performance. In order to monitor the achievement of goals in real time, we use online quality dashboards countermeasures to prevent similar problems from happening again. In 2023, the Company launched seven major quality special actions, to conduct center-level and company-level quality meetings, and review, report and improve every month to ensure the smooth progress covering 493 suppliers. towards our targets. With the quality management strategy 2.0, we have built a full-process quality control system that penetrates the entire process and breaks it down into five major areas year by year. XPENG â^™In 2023, we comprehensively planned and implemented audit and 01 Phase 1 02 Phase 2 03 Phase 3 01 management skill improvement activities for our systems, processes, and Systems products. The Company actively explored quality assurance models for new energy vehicles, adapted to the application of new technologies, Establish a self-sustainable closed Make the self-sustainable closed Leading in quality and setting the aiming to improve our mechanisms of standardized and process-based loop system loop system fully operational industry benchmark management to provide better products and services. â^™We formulated and announced the Product Safety Design Management 02 Procedure that encompasses the full life cycle of vehicles or products, R&D while adding new deliverables related to functional safety and information security to the list of vehicle deliverables. â^™In terms of new vehicle technology, the inspection line added automatic 03 driving calibration equipment, adaptive cruise control and lane departure Manufacturing calibration equipment to ensure the accuracy of vehicular functions. â^™Carried out tests on more than 10 types of road conditions and 43 functions to strengthen autonomous driving capabilities. â^™Verified the wading depth, vehicle speed, wading time and other aspects of various national standards and landmarks to ensure that the products meet all standard conditions. â^™Achieved traceability of all critical parts information with information retention of 10 years. â^™Conducted multi-scenario and multi-frequency automatic testing to improve quality and reduce costs. â^™Formulated the “Chip Supplier Audit Guide”, “Device PPAP Approval 04 Requirements” and “Supplier Chip Management Capability Evaluation Form” Supply to improve the construction of the quality management system. â^™Strengthened the preliminary design process review during the development stage of new vehicle models, to identify and avoid potential design process issues in advance. â^™Pre-identified and responded to management risks with production fluctuation, accelerating IQC talents transition, and easing SQE on-site pressure. â^™Launched special initiatives encompassing supplier quality, involving seven items in total including assistance to improve weak-point suppliers and APQP 29 trainings for D01 suppliers, in order to strengthen supplier management. ENVIRONMENTAL SOCIAL GOVERNANCE EXCELLENT PRODUCTS, SHAPING THE FUTURE OF MOBILITY INTRODUCTION 21
XPENG strictly complies with national laws, regulations and measures including the “Regulations on the Administration of Recall of Defective Automobile Products ” and the “Measures for Implementation of Regulations on the Administration of Recall of Defective Automobile Products”, and has formulated internal product recall management systems such as the “Administrative Measures for Recall of Defective Automobile Products”, improving the Company’s product traceability and recall system and protecting the basic rights and interests of consumers. In 2023, the Company had no recalls due to product quality or safety issues. Indicator 2020 2021 2022 2023 Number of product recalls (vehicles) 0 13,399 0 0 Indicator 2020 2021 2022 2023 Balance at the beginning of the stipulated warranty period 34,597 111,351 371,140 641,062 (unit: thousand CNY) Fees paid during the warranty period (unit: thousand CNY) 925 32,352 61,551 228,674 O p e rati n g i n co m e (u n it : thousand CNY) 5,844,321 20,988,131 26,855,119 30,676,067 Wa r ra nt y ex p e ns es as a percentage of annual revenue 0.016% 0.15% 0.23% 0.75% XPENG Emergency Response Assurance In order to strengthen its ability to handle risk incidents and maximize risk prevention and resolution, XPENG has formulated the “Management Measures for National Standard Data Quality”, the “Management Measures for Market Quality Information” and the “Management Measures for Quality Issues” to improve the process of analysis and resolution of quality-related problems. At the same time, we have formulated emergency response plans for all products, and have diversified and improved the safety of our supply chains by conducting dynamic evaluations and hierarchical management, while promoting VMI supplier practices and muti-echelon supply chains. ENVIRONMENTAL SOCIAL GOVERNANCE EXCELLENT PRODUCTS, SHAPING THE FUTURE OF MOBILITY INTRODUCTION 22
1.1.3 Product Safety XPENG adopts the product safety management guideline of “valuing safety and innovation, upholding compliance and responsibility”, and has formulated and released internal management systems related to product safety, such as the “Product Safety System Management XPENG Leadership Commitment to Product Safety Manual”, “Product Safety Design Procedures”, “Safety Design Standards for Power Batteries”, “Management Measures for Investigation of Potential Safety Hazards in New Energy”, and “Emergency Plan for Major Electric Vehicle Accidents”, to establish and improve the safety Ensure the formulation of product safety policies and goals and adapt them to the management system for the entire product life cycle. In addition, guided by the goal of safe production, we have further defined safety 1. Company’s strategic decisions. responsibilities, safeguarding the Company’s stable operation and high-quality development. Ensure that product safety management system requirements are integrated into the 2. Company’s business processes. XPENG 3. Ensure the ample provision of resources required for the product safety management system. 4. Communicate the importance of product safety management system requirements. 5. Ensure that the product safety management system achieves its expected results. 6. Guide and support employees to contribute to the effectiveness of the product safety management system. 7. Promote continuous improvement of the product safety management system. Support relevant management roles in demonstrating leadership within applicable areas of 8. responsibility. ENVIRONMENTAL SOCIAL GOVERNANCE EXCELLENT PRODUCTS, SHAPING THE FUTURE OF MOBILITY INTRODUCTION 23
XPENG Mechanism Construction Established an “Electric Vehicle Major Accident Emergency Plan” and “Extreme Weather Response and Management Measures” to formulate complete response and disposal procedures for different levels of accidents to ensure timely and effective response to various emergencies. Established a three-level response plan and a “7×24 hour” all-weather accident emergency response channel to ensure clear work authority when a crisis occurs. Risk Monitoring In accordance with the G B/ T 329 60 -201 6 “ Technical Specifications of Remote Service and Management System for Electric Vehicles” standard, a new energy vehicle enterprise monitoring platform (National Standard 32960 Platform) was established, allowing real-time monitoring of the entire vehicle, power battery, drive motor, vehicle faults and other related information. Risk Assessment The Product Safety Working Group is responsible for formulating product safety assessment guidelines, conducting risk assessments, and classifying and prioritizing potential safety risks. Records of the entire process are retained for subsequent analysis. Product Safety Audits The Company has established a set of safety management indicators for monitoring product quality and safety, operational safety, accident response and analysis, etc., and regularly conducts monitoring, measurement, analysis, evaluation and improvements. In addition, the Company also conducts internal audits at least once a year to ensure the adequacy and effectiveness of the product safety management system. Product Safety Training Launched a one-stop knowledge zone for smart vehicle safety, covering regulatory standards, technical standards, safety procedures and practical cases. The Company pushed this learning resource to all employees, aiming to provide guidance and learning materials related to smart vehicle safety for project decision makers and developers, supporting them to be more accurate and comprehensive in decision-making and judgment processes. In 2023, the Company carried out product safety knowledge Q & A events, in which a total of 85 relevant professionals participated. ENVIRONMENTAL SOCIAL GOVERNANCE EXCELLENT PRODUCTS, SHAPING THE FUTURE OF MOBILITY INTRODUCTION 24
XPENG G9 EURO NCAP Rating: 5 Stars C-NCAP5 Rating: 5 Stars (Comprehensive Score: 92.2%) China Auto Health Index (C-AHI) : 5-Star Rating XPENG G3 C-NCAP Rating: 5 Stars (Comprehensive Score: 92.2%) C-IASI63 indicators won China Insurance Automotive Safety Index G rating (excellent) UN R155 XPENG was awarded UN R155 (United Nations Economic Commission for Europe Regulation No. 155) Compliance for Cyber Security Management System Certification. XPENG XPENG P7 EURO NCAP Rating: 5 Stars C-NCAP Rating: 5 Stars (Comprehensive Score: 89.4%) XPENG P5 C-IASI: 3 indicators won China Insurance Automotive Safety Index G rating (excellent) China Auto Health Index (C-AHI) : 5-Star Rating i-VISTA: 5-Star Rating Note: 5. C-NCAP is the abbreviation of China-New Car Assessment Programme. C-NCAP conducts comprehensive safety performance testing of the cars, including passenger protection, pedestrian protection and active safety. 6. C-IASI is the “China Insurance Automotive Safety Index”. The test items include crashworthiness and maintenance economy index, vehicle occupant safety index, pedestrian safety index outside the vehicle, vehicle auxiliary safety index, etc. ENVIRONMENTAL SOCIAL GOVERNANCE EXCELLENT PRODUCTS, SHAPING THE FUTURE OF MOBILITY INTRODUCTION 25
1.2 Quality Service 1.2.1 Customer Rights and Interests Protection With the mission of “in pursuit of customer-centric value creation, leveraging advanced technology to create a more XPENG puts customer rights and interests first. We focus on listening to customers’ voices, establishing, and improving customer complaint convenient and pleasant mobility lifestyle,” XPENG upholds high-quality services as our cornerstone, and is committed to management mechanisms, and strictly protect customers’ personal information. We adhere to responsible marketing practices, and actively creating exquisite products and excellent service that satisfy customers through a wealth of service solutions and personalized respond to the personalized and diverse needs of customers, providing smart services to XPENG owners. service details. XPENG Customer Privacy Protection XPENG attaches great importance to information security and We have established an information security and compliance customer privacy protection, and strictly abides by relevant management system and set up a dedicated Information laws, regulations and rules such as the “Cybersecurity Law Security and Data Compliance Committee, which is chaired of the People’s Republic of China”, the “Data Security Law of by the Vice Chairman of the Company and joined by the Vice the People’s Republic of China”, the “Personal Information Presidents of relevant business lines. The Information Security Protection Law of the People’s Republic of China” and the and Data Compliance Committee has set up an Information “General Data Protection Regulation (GDPR)”. The Company Security Working Group and a Data Compliance Working Group has formulated and issued internal pollicies such as the “XPENG to closely coordinate and handle relevant emergencies, timely Privacy Policy” and the “XPENG Network Platform Privacy monitor and evaluate the conditions around important business Policy” applicable to all employees to improve our customer systems, and make every effort to prevent the occurrence of privacy protection system, and strengthen the standardization data breach, reducing cybersecurity risks. In the past three of full-lifecycle management of all data information. In 2023, years, XPENG has not experienced any data breach or network we amended seven polices, including the “Information Security security incidents, and has not been subject to any penalties and Privacy Protection Management Manual”, applicable to all due to information security vulnerabilities or other network employees of the Company. In addition, in adherence of privacy security incidents. protection policies, we carried out internal inspections in each quarter of 2023, and engaged external audit institutions to carry out annual compliance audits to incorporate privacy protection into all aspects of our business activities. ENVIRONMENTAL SOCIAL GOVERNANCE EXCELLENT PRODUCTS, SHAPING THE FUTURE OF MOBILITY INTRODUCTION 26
In 2023, the Company obtained ISO 27001 Information Information Security and Data Compliance Organizational Structure ISO 27001 Security Management System Certification. Information Security and Data Compliance Committee In 2023, the Company obtained ISO 27701 Privacy Information Chair: The Vice Chairman of XPENG ISO 27701 Management System Certification. Members: Vice Presidents of various business lines Responsibility: Coordinate the management of information security and data compliance, and approve and supervise relevant affairs Seven core systems passed the Level 3 Evaluation of the 7 National Cybersecurity Level Protection. Information Security Working Group Data Compliance Working Group Information Security & Cloud Technology Legal Department Responsibilities Department, Data Intelligence Center Responsibilities: Responsible for cybersecurity, information security Responsibilities: Responsible for data compliance matters and data security matters related to the Company’s business related to important data, personal information protection, and data cross-border involved in the Company’s business XPENG ENVIRONMENTAL SOCIAL GOVERNANCE EXCELLENT PRODUCTS, SHAPING THE FUTURE OF MOBILITY INTRODUCTION 27
XPENG 01 â^™ We have integrated the principle of privacy protection into the Company’s 06 â^™ We have formulated policies such as the Measures for Management of product development and system architecture while carrying out Data Information Security Emergency Response and the Contingency Plan Privacy risk screening Protection Impact Assessment (DPIA) to identify and mitigate privacy Emergency response for Information Security Incidents and relevant measures for handling risks before data processing. We have also launched the General Data emergencies, clarifying the process for handling information security Protection Regulation (GDPR) compliance program and released the incidents to safeguard against information security risks. During the “XPENG White Paper on GDPR”. Reporting Period, we carried out a “Data Leak Drill – Extortion Incident” drill, coordinated by all relevant departments, aiming to deal with potential data leakage incidents through desktop exercises. In 2023, the Company organized 3 information security protection drills and 7 externally certified â^™ Following the principles of legality, legitimacy, and necessity, we explain information security protection drills. 02 to users the methods of collection, use, retention, and protection of Data collection procedures all personal information through documents such as privacy policies, â^™ We conduct annual audits on SOX listing compliance, ISO 27001 & ISO product/function descriptions, and service scenario guidelines. Before 27701, GDPR compliance and European WP29 compliance, we also users register and use relevant product functions and/or service conduct assessment on the national information system multi-level scenarios, we will clearly inform users and allow users to choose whether protection each year. Additionally, we carry out third-party vulnerability their data is to be collected, used, retained, and processed. analysis, including simulated hacker attacks, during each system update in order to strengthen our information security management capabilities. â^™ We collect customer information mainly according to the purpose of product functions and/or service scenarios. Due to the large number of models and their product functions/service scenarios, the personal information that we collect, and processes may vary depending on different models, software â^™ All cooperations with third parties are subject to relevant processes versions or specific functions/service content. The actual situation of the 07 and approvals, and require signing a confidentiality agreement that functions/services used by customers shall prevail, and users are notified Third-party liability defines confidential information, confidentiality obligations, and mainly through privacy policies and voice warnings. liabilities for breaches of the agreement. â^™ We comply with statutory requirements regarding where, how 03 and for how long personal information shall be stored, and take Information security storage appropriate encryption, de-identification and other technical measures for the storage of information. â^™ The internal use of data is subject to the minimum necessary rule, and must go through our security compliance review process to prevent risks associated with outbound data transfer and protect personal information rights. â^™ Customers’ personal information shall only be retained within the 04 period necessary to achieve the purpose stated in the product Information archiving and deletion functions and/or service scenarios and the period required by laws and regulations, unless otherwise stipulated by laws and regulations or authorized by the personal information entities. After the above storage period is exceeded, we will delete or anonymize the personal information of our customers. 05 â^™ We actively promote the strengthening of information security and privacy compliance awareness, regularly conduct privacy Privacy protection training protection training covering all employees, and establish public feedback channels. As an important part of the Company’s data security governance work, we implemented a project for constructing an information leakage prevention system in 2023, and revised the confidentiality clauses of the “Employee Code of Conduct”, adding penalty requirements for data leakage incidents, and completed information confidentiality training and exams for all employees. ENVIRONMENTAL SOCIAL GOVERNANCE EXCELLENT PRODUCTS, SHAPING THE FUTURE OF MOBILITY INTRODUCTION 28
Customer Complaint Resolution 0 0 0 XPENG strictly abides by the Law of the People’s Republic of China on the Protection of Consumer Rights and Interests and has piece piece person established the “XPENG Complaint Handling Management Measures” to regulate the acceptance and feedback of consumer complaints, Number of information security Number of data breaches Number of customers and employees ensure unimpeded customer communication channels and effectively protect the rights and interests of our consumers. At the same time, breaches or other network affected by company data breach we actively improve the service quality of our complaint handling personnel through internal and external training, case studies, personnel security incidents certification, and other methods to ensure customer satisfaction. In 2023, 45,881 customer complaints were received through our 400 customer hotline. 100% of complaints were responded to and resolved, with 80.06% complaint handling satisfaction rate. 0CNY 0complaints Fines paid due to information C o m p l a i nts re c e i v e d f ro m security breaches or other network regulators and other external 01 Handling customer complaints in accordance with the “XPENG security incidents agencies regarding breach of Complaint Handling Management Measures”, optimizing the customer privacy System guarantee complaint handling experience and improving customer trust through standardization, scenario-classified handling, performance evaluation and other methods. 02 We continuously improve our closed-loop complaint handling mechanism, where our professional customer service department Process assurance is in charge of all the work, including timely verifying problems and communicating with customers as well as following up on the XPENG resolutions, effectively satisfying our customers’ needs. At the same time, we actively listen to customers’ feedback on the effectiveness and efficiency of complaints handling, evaluate the feedback and drive internal optimization to further enhance long-term customer satisfaction. Customer Communication Channels Through advanced technologies such as vehicle self-diagnosis XPENG places a high premium on active communications with its customers. The Company maintains open customer communications 03 functions, intelligent fault diagnosis and remote treatment, potential through a diverse range of channels. Our clients can contact us through various channels on all problems or needs, including through our Technical support faults that may lead to complaints can be identified in a timely manner 400 customer hotline, online customer service, XPENG’s APP service group, enterprise WeChat service group and nationwide sales stores and handled in advance to reduce the possibility that the relevant to make sure that customers’ opinions and suggestions are responded to in a timely and effective manner. problems turn into complaints. ENVIRONMENTAL SOCIAL GOVERNANCE EXCELLENT PRODUCTS, SHAPING THE FUTURE OF MOBILITY INTRODUCTION 29
Responsible Marketing XPENG upholds the principle of integrity operations, and strictly abides by the Advertising Law of the People’s Republic of China and other related laws and regulations, formulating internal policies on responsible marketing. We standardize our advertising messages and advertisement application and review processes, and ensure that products are not exaggerated or falsely advertised in the marketing process to protect consumer rights and interests. XPENG We will continue to strengthen our responsible marketing practices, 01 providing our sales team with compliance training. We will inform Marketing training customers of all risks as well as the proper use of our products, and ensure fair marketing throughout the entire process of sales, delivery, and after-sales. Any related problems and questions are dealt with and answered in a timely manner. 02 We incorporate compliance marketing into the evaluation for sales commission as a key indicator. If there is any infringement, the sales Performance evaluation, incentive commission for the month will be affected accordingly. For the and punishment mechanism person directly responsible for the infringement, different degrees of disciplinary punishment will be applied in accordance with the Employee Code of Conduct and other relevant rules and regulations. Furthermore, given the number and severity of violations occurred in a sales store on annual basis, the store managers will be held accountable accordingly. 03 We provide green/eco lifestyle products, degradable goods and other eco-friendly products in our official online store; we encourage Sustainable consumption consumers to purchase as they need, and our sales staff is trained to recommend most suitable (non-expensive/highest margin) products according to user needs, and encourage customers to use privilege points for purchase to the greatest extent first, allowing rights and interests for our customers as much as possible. ENVIRONMENTAL SOCIAL GOVERNANCE EXCELLENT PRODUCTS, SHAPING THE FUTURE OF MOBILITY INTRODUCTION 30
1.2.2 Providing Quality Service XPENG Energy Replenishment System XPENG is committed to providing a distinct smart experience for customers as it is at the core of the future mobility experience. To meet XPENG takes customer real-life scenarios into consideration of the siting of charging stations so as to enable its electric vehicle owners to the needs of smart EV customers, we have tailored an improved service system with the aim to provide a better user experience. We have charge their cars in the most convenient way. established a sales management platform to provide customers with comprehensive pre-sales and after-sales services in accordance with the “XPENG Measures for the Management of Its Commitments to Customers” and relevant directive procedures and standards. During the pre-sales stage, the sales operation department and the user development department are jointly responsible for formulating 01 XPENG is the industry’s first electric vehicle maker with a charging network that covers all prefecture-level administrative regions and business strategies and planning sales networks and channels; while in the after-sales stage, the regional service departments focus on the formulation of after-sales service strategies and procedure standards. The platform also encompasses regional management across major Super charging resource sharing centrally-administered municipalities across China (337 cities in in remote areas total). In regions where super charging resources are scarce, XPENG regions in China to ensure effective pre-sales and after-sales service management at XPENG’s sales and service network. provides the rarely seen 180kW DC super charging services. Improving Customer Service XPENG continues to expand its energy replenishment network. The 02 “3 km Energy Replenishment Life Circle” covers more than 83% of XPENG 3 km e n e rg y re p l e n is h m e nt l i fe car owners in 10 core cities including Beijing, Shanghai, Guangzhou circle and Shenzhen so that the time needed for the car owners from Led by a professional service strategy department, we design departure to charging facility is reduced to less than 10 minutes. In customer study and education content based on customers’ commonly used functions, frequently asked questions, and more than 300 cities including Guiyang, Kunming, Huangshi and customer behavior and preference shifts due to seasonal or Guilin, the coverage of the “3 km Energy Replenishment Life Circle” cyclical effects. We provide richer customer care services to let customers learn how to use XPENG’s products through more reaches up to 71%. channels and to improve their recognition of our services. We have established a unified operation mechanism to retain customers and gain reputation through a variety of In 2023, XPENG Supercharging is available in all prefecture-level servicing activities. We unite brand headquarters and regions to provide all-around customer care, including on-site administrative regions and municipalities across the country. maintenance, holiday gifts, etc., and designed localized service solutions within special timeframes. In 2023, the Company held over 300 customer servicing events, hosting more than 160,000 people. Through channels such as the XPENG APP and Enterprise WeChat, the Company has equipped its stores with a dedicated “XPENG steward” online service team, integrating the online and offline service interface. Using our knowledge database, customer profile systems and remote diagnostic tools, our team is able to promptly answer and address customer questions. Simultaneously, we are able to provide efficient technical support through enabling timely customer communications with professional technical experts. Building on our technology innovation, the Company provides full-chain intelligent maintenance service capabilities to quickly solve technical vehicular problems. We optimized our appointment process for maintenance services and improved service experience through large-screen reminders and one-click to get expert appointments. During in-store maintenance services, customers can authorize no-key maintenance services by one click. At the same time, the Company implements a paperless service process, and provides customers with service documents in a transparent, environmentally friendly and efficient manner. ENVIRONMENTAL SOCIAL GOVERNANCE EXCELLENT PRODUCTS, SHAPING THE FUTURE OF MOBILITY INTRODUCTION 31
X-SERVICE: Smart and Fast Service for a More Pleasant Experience X-CERTIFIED Certified Second-hand Cars X-SERVICE is an online, easily accessible mobile smart service built for users based on the XPENG Intelligent Service Platform, and is XPENG is committed to creating an intelligent and high-quality second-hand car trading service chain, allowing car owners to sell or committed to bringing XPENG owners excellent service experience which is significantly better than the traditional one. replace vehicles with efficient value preservation, and allowing car buyers to choose and purchase vehicles transparently and safely, creating a “new” travel life for all. XPENG XPENG 01 Through an exclusive service group, the service partner meets the 01 Establish an intelligent assessment with an objective and full-cycle service needs of users during the order, delivery and use reasonable official certification system, providing 199 official tests, Online | exclusive group service of our cars. Buy with confidence original factory upgrades, official transaction transfers and other services to ensure efficiency and safety, and provide certified second-hand car financial solutions. 02 An integrated solution to provide users with online pre-diagnosis 02 We protect the rights and interests of second-hand car owners, and appointment services. offering the basic services of new cars; we provide a 7-day return Intelligent | Integrated smart diagnosis Use with confidence policy and exchange services, and establish a full-cycle after-sales maintenance record tracking. 03 Using our intelligent service platform to trigger mobile services, we Implementing the “rest assured replacement” service for our brand, offer one-hour distance to service within the core urban area, to 03 which provides high subsidies, insures 30 days of service, and Mobile | one-hour distance to service better meet the needs of car owners. Sell with confidence provides safe and convenient official one-stop service. ENVIRONMENTAL SOCIAL GOVERNANCE EXCELLENT PRODUCTS, SHAPING THE FUTURE OF MOBILITY INTRODUCTION 32
1.2.3 Ensuring Customer’s Safety XPENG is dedicated to increasing user safety consciousness in driving with ADAS, and has launched the industry’s first intelligent driving safety framework—“intelligent driving points”, which is designed to guide car owners to follow the standards when using ADAS functions, to help car owners understand the safety boundaries of driving with ADAS, and to improve their safety consciousness. XPENG intelligent driving safety framework centers on “intelligent driving points” which encompasses education and assessment, including pre-entry training, admission assessment, and safety reminders in use, aiming to provide users with all-round safety protection during all stages of ADAS usage. XPENG We launched online classroom on ADAS with courses covering 01 ADAS basic information and knowledge, user manuals and other Safety Education relevant content. It aims to improve user’s safe driving skills through entry-level technological knowledge education, progressive technological knowledge learning, and user manuals, allowing driving become smarter, safer and more convenient. When it is occurred that a driver using ADAS to assist his/her 02 driving doesn’t engage in steering, or is predicted in fatigued “Intelligent Driving Points” Reminders driving with frequent lack of attention to road conditions and similar risks, the points system will deduct points to the extent of degrees of danger. Simultaneously, the system will prompt relevant safety reminders and corresponding learning content on safety to users, such as checking appropriate intelligent driving illustration graphs, reading safety instructions of functions, and participating in relevant safety behavior questionnaires to help users improve their consciousness and skills of safe driving. 03 High-score drivers (referred to users intelligent driving score balance greater than 90 points) can gain privileges to enjoy priority “Intelligent Driving Points” Incentives in invitation to the beta tests of XPENG OTA in the future. ENVIRONMENTAL SOCIAL GOVERNANCE EXCELLENT PRODUCTS, SHAPING THE FUTURE OF MOBILITY INTRODUCTION 33
1.2.4 X PE N G O w n e rs M e et an d G re et : D u r i n g th e X PEN G Shaping the XPENG Owner Culture O wners Meet and G reet , we invited X PENG’s product experts, industry opinion leaders, and seasoned “XPENG owner gurus” as the participants in fireside chats, aiming to provide participants with professional insights and in-depth discussions in various areas. XPENG has skillfully built out the “XPENG Owners Club” platform, dedicated to providing a warm and friendly communication space for our car owners. To further enrich the car owner’s daily life with cars, we have organized a series of high-quality cultural activities for car owners, such as “X-MOMENT” and “X-walker.” These initiatives not only help strengthen the interaction and connection between car owners, but also allow them to feel the unique charisma of XPENG in a relaxed and pleasant environment. XPENG X-MOMENT: We create exclusive and high-end car owner activities for our premium customers, spreading XPENG’s XPENG Moments: XPENG Moments are focused on bringing spirit of exploration. a multi-faceted lifestyle, looking to become a creator of fruitful lives. It features a variety of interest proposals [Case Stu d y] : X PE N G x Le i c a A kad e m i e “ T h e M os t co-created with XPENG owners in an effort to create a Aesthetic P7 Photography Contest” diversified lifestyle sharing platform, and to explore the In 2023 , we joined hands with the Leica Akademie to vitality of XPENG’s lifestyle. launch the “The Most Aesthetic P7 Photography Contest”. Simultaneously, we invited photography experts from the Leica Akademie to give lectures on filming and taking photos, as well as bring an expert-level photographic experience to XPENG Owners. More than 3,000 entries of high-quality P7 photos were received during the event. X-walker: it is also known as XPENG owner volunteers, made up of loyal owners who highly identify with the XPENG brand, products and culture. We invited them to participate in special activities, such as public welfare events, auto shows and store marketing activities where we build closer ties between car owners and XPENG. X-EXPLORER: It consists of enthusiastic and insightful XPENG owners who are early adopters of XPENG’s new models, innovative software and premium products. They would communicate face-to-face with product managers and business unit leaders, and provide valuable feedbacks and suggestions for product design and iterative development. ENVIRONMENTAL SOCIAL GOVERNANCE EXCELLENT PRODUCTS, SHAPING THE FUTURE OF MOBILITY INTRODUCTION 34
1.2.5 Improving Customer Satisfaction XPENG strives to offer a higher-than-expected service experience. We strictly comply with the Law of the People’s Republic of China on Protection of Consumer Rights and Interests and build out our customer satisfaction assessment system, consistently improving the customer satisfaction. We further develop customer satisfaction key performance indicators, and regard customer feedback as an important reference for subsequent work improvement. We continuously optimize product and service quality. XPENG’s customer satisfaction rate reached 96% in 2023, meeting our targets. The Company conducted monthly NPS7 surveys with a focus on the possibility of making recommendations of XPENG products and services to others by customers. More importantly, we leverage the feedback gathered from these surveys for customer follow-ups in addition to improvement plans for relevant departments to enhance our owners’ product and service experience. In 2023, the NPS average score increased 8% compared with 2022. XPENG We reviewed the achievements of previous goals to provide a 01 reference for service experience improvement and goals setting for Previous goals review and new goals setting the current period, in order to better fulfill customer needs. In order to have a comprehensive and objective understanding 02 of customers’ feedback to our services, we conducted a Multi- dimensional evaluation comprehensive study on three dimensions including service reception, service quality and service efficiency, and strive to indicators provide customers with better service experiences. 03 After vehicle is delivered, the satisfaction survey is sent to customer to achieve a 100% delivery rate of survey, allowing us to Timely survey secure customer feedback and suggestions in a timely manner. Indicator 2020 2021 2022 2023 2023 Goals Percentage of satisfied 96% 97% 96% 96% 96% respondents Percentage of respondents to our survey 31% 47% 33% 35% N/ANote Note: 7. Net promoter score, also known as word-of-mouth, is a metric used to measure the possibility of a user referring an enterprise or service to others. XPENG NPS survey began in April 2022. N/A indicates the goal of respondents as a percentage of the total number of customers is unknown. ENVIRONMENTAL SOCIAL GOVERNANCE EXCELLENT PRODUCTS, SHAPING THE FUTURE OF MOBILITY INTRODUCTION 35
02 Sustainability Management, Creating a Low-Carbon Future XPENG values green and sustainable development and carries out daily production and operations in an environmentally friendly manner. We continuously improve our environmental management framework, advocate green production and operations, proactively practice energy conservation and emission reduction, pay attention to the exploration and exploitation of clean energy, and comprehensively implement initiatives encompassing energy conservation, pollutant prevention and water resource protection. 41,071MWh 1.5million tonnes Photovoltaic power generation. Compared with traditional fuel vehicles, electric vehicles we delivered in 2023 can reduce greenhouse gas emissions by more than 1.5 million tonnes over their full lifecycles. E XP LOR E R O F F U T U R E M O B I L I T Y ENVIRONMENTAL SOCIAL GOVERNANCE SUSTAINABILITY MANAGEMENT, CREATING A LOW-CARBON FUTURE 36
[Feature story] Green Products Leading Green Mobility 1 Green Products XPENG XPENG upholds the concept of green manufacturing and integrates sustainable development across the entire life cycle of products, ensuring that products can meet customers’ needs while also boasting low-carbon and environmentally-friendly advantages. 01 Green Design XPENG adopts lightweight and high rigidity approach to vehicle design in order to extend vehicle product life, reduce carbon emissions over a vehicle’s full lifecycle, and improve the efficiency of the electric drive system. It also develops a low wind-resistance design to reduce overall energy consumption in a vehicle, leading to lower carbon emissions. The Company also uses Product Eco-friendly Label C-GCAP environmentally-friendly, non-hazardous and recyclable materials to reduce environmental pollution. OEKO-TEX Standard 100 5-star ratings for Occupant Health Materials used for the interior decoration of XPENG G6 XPENG G9 received C-GCAP8 02 Green Products and G9 have obtained XPENG conducts carbon footprint assessments for all its vehicle products across the full life cycle covering raw materials, production processes and use processes. In 2023, XPENG model OEKO-TEX Standard 100 5-star ratings for Energy Efficiency line-up’s full life-cycle carbon emissions were 26% lower on average than that of same-class fuel vehicles. Compared with The cover materials used in the interior design of XPENG XPENG G9 received C-GCAP traditional gasoline vehicles, the electric vehicles produced by X9 model have obtained XPENG in 2023 reduced carbon dioxide emissions by more than 1.5 million tonnes throughout their life cycle. OEKO-TEX Leather Standard I 5-star ratings for Low-Carbon 03 Control and substitution of hazardous The cover materials used in the interior design of XPENG XPENG G9 received C-GCAP substances X9 model have obtained We have established a comprehensive management and control system for banned substances to ensure that our vehicle’s eco-friendliness meets standards, while gradually promoting the reduction and substitution of hazardous substances. The Company manages to control all of its products’ hazardous substances and recycling rate targets in accordance with the “Compliance Management Measures for Prohibited and Restricted Substances and Recycling”, in which it is required that hazardous substances must meet the standards of the “Requirements for Restricted and Restricted Substances in Automotive Products”. In addition to making the materials of auto parts to meet the national GB/T 30512 “Requirements for Prohibited Substances in Automobiles” standard, we also impose additional requirements such as the amount of asbestos substances should be undetectable and the content of phthalate substances not exceeding 0.1%. In addition, we have established a VOC (volatile organic compound) evaluation standards system and process specifications covering complete vehicles, parts and materials in 2022, and strictly control any hazardous VOC substances. Note: 8. C-GCAP, i.e. the China Green Car Assessment Programme, conducts test and evaluation on the green performance of vehicles from three dimensions of health, energy efficiency and low carbon, and conducts star ratings respectively. ENVIRONMENTAL SOCIAL GOVERNANCE SUSTAINABILITY MANAGEMENT, CREATING A LOW-CARBON FUTURE 37
2 Green Packaging In terms of packaging, the Company has discontinued the use of disposable packaging, promoting recycled packaging (such as European-standard plastic box, hoarding box, metal box, material pipe, etc.), and replaced the original wood frame packaging and disposable paper box packaging with turnaround frames that can be recycled. Where packaging lining is necessary, environmental-friendly and materials with a high recycled contents are used. For special parts, we use metal racks and parts separation to reduce the use of packaging materials. Currently, we have optimized the packaging of 138 parts, effectively reducing the consumption of packaging materials. At the same time, we also actively promote packaging improvement of suppliers. As of the end of 2023, a total of 43 suppliers participated in relevant activities. XPENG Parts Information Packaging Optimization Measures Powertrain bracket Removed bubble wrap Water cooling pump bracket Removed protective packaging Drive shaft assembly Removed surface plastic bags Heater bracket Removed Styrofoam Ambient Light Removed plastic protective bags ENVIRONMENTAL SOCIAL GOVERNANCE SUSTAINABILITY MANAGEMENT, CREATING A LOW-CARBON FUTURE 38
3 Green Logistics XPENG Green Initiatives in Logistics Increasing the full load rate According to the contract structure and recent scheduling We continued to optimize the Company’s transportation strategy, increasing the full load rate of transportation, adjusting the proportion of transportation by water and rail, and minimizing carbon emissions within our transportation. During the Reporting Period, we compiled the r e s o u r c e s , w e a d j u s t t h e v e h i c l e l o a d i n g o r d e r. I n consideration of the estimated sales trend, we replenished “Logistics Planning White Paper” and put forward a number of environmentally-friendly transportation requirements to further promote the the inventory in advance for transport orders without full load, thus improving the full load rate and reducing the green development of logistics. energy consumption and carbon emission in transport. Optimizing the mix of water-rail multimodal transport In consideration of the efficiency of water transport and railroad transport, we increased the proportion of railroad transpor t in inland regions , and reduced the demand for connecting transport from ports to warehouses, thus reducing unnecessary transport journeys. XPENG Selection of logistics and transportation equipment L i t h i u m b a t te r y c h a r g i n g e q u i p m e n t i s u s e d i n o u r transportation equipment to eliminate lead-acid battery and avoid polluting liquids. At present, our Guangzhou plant has achieved 100% use of lithium charging equipment. Electrifying logistics equipment In 2023, our Zhaoqing plant deployed new energy unmanned tractors for in-plant distribution, and all logistics equipment used within the factory now run on electricity. Electrifying logistics equipment T h e C o m p a ny a p p l i e d d i v is i o n a l p o w e r c h a rg i n g fo r the assembly-line’s equipment charging room and the Autonomous M obile Rob ots (A M R) for assembly-line , reducing the moving distance needed for charging and energy consumption. Energy-saving with automated carriage equipment The Company ’s Guangzhou plant ’s automated carriage equipment features standby energy-saving mode, which will operate in energy-saving mode during long non-task hours or off-work timeframe to reduce energy consumption. ENVIRONMENTAL SOCIAL GOVERNANCE SUSTAINABILITY MANAGEMENT, CREATING A LOW-CARBON FUTURE 39
4 Green Recycling Battery Recycling XPENG has established a whole-process management procedure for waste power battery recycling. For the end-of-life batteries generated by after-market sales/clients, consumers can send their vehicles to the after-sales service centers for professional diagnosis by XPENG’s maintenance technicians. We will dismantle the batteries that meet end-of-life conditions, and hand over to qualified suppliers for recycling and reuse. During the Reporting Period, we iterated the overall recycling process, and identified details of the rights and responsibilities of each procedure. XPENG’s Zhaoqing plant plans to achieve cascade utilization of the Company’s used batteries through the energy storage system in 2024, using the BMS that comes with the battery module, eliminating the need for disassembly and reorganization, achieving cascade utilization along with reduced costs and increased efficiency. Flow diagram of battery recycling process Used Batteries Packs YES Echelon Use Overall appearance integrity, no breakage, Used Modules leakage, fire or destructive experiments NO Recovery Used Cells XPENG Resource Recycling XPENG has launched an aluminum plate closed-loop recycling project. The project has developed aluminum plate closed-loop recycling technology. Through technology upgrades and transformations of the existing production line, 100% of the scrap aluminum plates of the production line is recovered and processed, and is developed into plates that meet performance requirements to be reused for automobile production. The project can reduce primary aluminum consumption by 40% and reduce carbon dioxide emissions by 700 kg per car in the production process of a single vehicle, making it the first demonstrative project in China to recycle and reuse aluminum plate in a closed-loop system. ENVIRONMENTAL SOCIAL GOVERNANCE SUSTAINABILITY MANAGEMENT, CREATING A LOW-CARBON FUTURE 40
2.1 Climate Governance Since 2021, by reference to the recommendations from the Task Force on Climate-related Financial Disclosures (TCFD), XPENG has been managing climate change matters in four aspects, namely governance, strategy, risk management, metrics and targets, to improve our climate risk tackling capabilities and capitalize on climate development opportunities. XPENG 2.1.1 Governance We have established a sustainable development governance framework with the Board acting as the highest decision-making body. The Board has overall responsibility for the Company’s sustainable development related matters and ensures that appropriate and effective ESG risk management and internal control systems are in place. We incorporate climate-related risks and opportunities that are closely related to the Company’s operations into the scope of ESG management. For the responsibilities and task assignments across each management level, please refer to the section titled “Sustainability Management” in this report. ENVIRONMENTAL SOCIAL GOVERNANCE SUSTAINABILITY MANAGEMENT, CREATING A LOW-CARBON FUTURE 41
2.1.2 Strategy Risk Category Related potential climate Countermeasures change risks Market Risks T h e s c a rc it y of n o n—re n e w a b l e Actively develop alternative materials to reduce For XPENG, climate change poses various risks to our business, resulting in potential financial impacts. Simultaneously, climate resources and energy is expected to reliance on single energy and resources. change will also create opportunities for our development and promote the Company’s low-carbon development. Based on industry increase uncertainty on product costs and selling prices, and the electric and our own characteristics, we have identified a number of risks and opportunities related to climate change and are gradually vehicle industry may face market improving our management strategy for future mitigation, adaptation and responses to climate change. acceptance and consumer choice risks XPENG in the medium to long term. The increase in prices of conventional To establish and improve the energy management energy will also make production more system, implement online monitoring and analytic expensive and challenge companies’ tools on energy consumption, with the goal of ability to access renewable energy and continuously reducing energy consumption per unit to control the cost. to realize ongoing carbon emission deduction. Climate change has brought more a t te n t i o n to c a r b o n e m i s s i o n s throughout the life cycle of electric vehicles, and companies need to recycle batteries, which may have a certain impact on financial results. Extreme B u s i n e s s p re m i s e s m a y n ot b e E s t a b l i s h c o n t i n g e n c y p l a n s f o r e x t r e m e Risk Category Related potential climate Countermeasures able to operate normally due to w e a t h e r , s t r e n g t h e n i n g p o t e n t i a l r i s k s Weather Risks extreme weather. id entificatio n measures base d o n weather change risks forecast and other information, and ensure the safety of factories and stores. Regulatory As the world is increasingly valuing To identify physical risks and transition risks, and the risks brought by climate change progressively improve management strategies for R is ks of d e l ay i n s u p p l y c h a i n , We monitor supply chains on a real-time basis, Risks and promoting the regulatory and mitigating, adapting to and fighting against climate production and deliver y caused finding alternative suppliers in a timely manner, disclosure requirements related to change. b y c l i m a t e c h a n g e , n a t u r a l assessing the impact of the worst situation on climate change, the Company will need disasters, etc. production, delivery and finance, and communicate to meet more compliance requirements with sales, production, delivery, finance and other when expanding its global business. departments in a real-time manner. Formulation of climate change mitigation strategies The Company’s servers are located Reasonable use of commercial insurance and for target markets. offsite, and backup system may not other measures to reduce potential losses due be able to obtain information in real to extreme weather. Technical A mega trend of transformation toward To establish and improve the energy management time. In the event of server breakdown low-carbon economy has generated system, implement online monitoring and analytic due to ex treme weather, cer tain Risks large needs for low-carbon production. systems on energy consumption, and relentlessly information may not be restored in We may face the pressure of equipment pursue energy consumption reduction per unit vehicle, time, leading to risk of data loss. replacement in the short to medium term making continuous efforts in emission reduction. to adapt to emerging requirements related Opportunities O u r c o u nt r y h a s b e e n a c t i ve l y In the long-term, the Company will follow the to new technologies and new processes. p ro m ot i n g t h e w o r k o n c a r b o n national carbon-neutral policies, integrating peaking and carbon neutrality, and c l i m ate c h a n g e m i t i g at i o n i nto t h e w h o l e the new energy vehicle market has life cycle of product design , procurement , The increasing market popularity for low- In order to advance the carbon reduction of raw materials, great room for development. production, sales and operations, seeking to carbon products will stimulate enterprises we will promote the reuse or dismantling and recycling of cope with the risk of climate change through to develop lower-carbon technologies and materials, as well as the development and application of the “XPENG economical mode”, and continue products. Our investment in low-carbon low-carbon alternative materials. to create low-carbon new energ y vehicles R&D might increase. preferred by consumers. Actively promote carbon emission reduction To use low-carbon and lightweight components. in the whole life cycle of electric vehicles and industry chain, building a closed-loop carbon To establish carbon emission reduction example emissio n re du ctio n system , estab lishing a programs, develop and utilize clean energy sources, such positive image of XPENG’s carbon neutrality as distributed photovoltaic power generation, and high- commitment, and forming long-term corporate voltage, high-power fast charging. and social values to help develop our brand. ENVIRONMENTAL SOCIAL GOVERNANCE SUSTAINABILITY MANAGEMENT, CREATING A LOW-CARBON FUTURE 42
2.1.3 Risk Management The Company has incorporated climate change risks into its risk management routine, and reports to the Board of Directors on related matters. We continuously monitor the international society, national and industry trends, timely identify and update the major risks and opportunities related to the Company. Relevant departments assess the impact of each risk on the Company and classify those climate change risks into different categories in accordance with occurrence possibility and impact degree. The management develops plans to tackle risks with higher materiality and emergency degree and makes alerts internally and externally. For risk management framework and risk identification, assessment, and management processes, please refer to the section titled “Risk Control” within this report. XPENG 2.1.4 Metrics and Targets To systematically promote carbon neutrality and carbon peaking goals, and tackle climate change, we will gradually develop short-term, medium-term and long-term carbon reduction targets, formulate carbon reduction plans for Scope 1, 2 and 3 emissions, and continue to optimize carbon reduction measures to steadily improve the level of our climate governance. During the Reporting Period, we set a target of 10% reduction in power and natural gas consumption in our Zhaoqing manufacturing base compared to 2022, which has been successfully achieved as at the end of the Reporting Period. ENVIRONMENTAL SOCIAL GOVERNANCE SUSTAINABILITY MANAGEMENT, CREATING A LOW-CARBON FUTURE 43
2.2 Green Production Environmental Management System XPENG strictly abides by the Environmental Protection Law of the People’s Republic of China, Law of the People’s Republic of China on Environmental Impact Assessment and other relevant laws and regulations in the countries and regions where it operates. The Company is committed to continuously improving environmental performance to reduce our environmental impact. Currently, all XPENG production plants have XPENG commits itself to green production and sustainable development, and actively assumes environmental protection obtained ISO 14001 Environmental Management System Certification. responsibilities. We strictly comply with the requirements of various laws and regulations of the countries and regions where we operate, continuously strengthening environmental management and green production practices. Across a full-spectrum of We have formulated an internal environmental protection management policy covering the entire business process and suppliers. At the Group our business operations, we comprehensively reduce the impact of production and operational activities on the environment level, we have formulated policies and systems such as the Environmental Occupational Health and Safety Management Manual, the Environmental and reduce the discharge of various pollutants. In 2023, XPENG was included in the Green Manufacturing List by the Ministry Safety Monitoring and Measurement Management System and the Construction Project Three Simultaneous Management System to standardize of Industry and Information Technology of the People’s Republic of China and was awarded as “National Green Supply Chain the Company’s environmental management work and requirements. In addition, each production plant has formulated department-level system Management Enterprise”. requirements based on its actual conditions, such as Environmental Protection Management Procedures, Environmental Monitoring Management Procedures, Environmental Protection Facilities Management Procedures, Management Procedures for Identification and Evaluation of Environmental Factors, etc. XPENG’s environmental management related policies have covered multiple aspects of its business XPENG “Construction Project Three Simultaneous Management System” Manufacturing operations and business facilities “Environmental Protection Facilities Management Procedures” “Solid Waste Pollution Prevention and Control Management System” “Management Procedures for Wastewater Pollution Control” Waste management “Hazardous Waste Management Procedures” 2.2.1 Environmental Management “Code for General Waste Management” XPENG continues to improve its environmental management system, determines various responsibilities of environmental management, Addressing environmental impacts “Management Procedures for Identification and Evaluation of Environmental Factors” and conducts day-to-day management on environmental protection, resource energy consumption, resource recycling, etc. and “Emergency Plan for Environmental Pollution Accidents” employee environmental awareness training. Logistics “Logistics Planning White Paper” “The Safety and Environment Management System for Interested Suppliers and contractors Parties of XPENG” Environmental Monitoring and Auditing Emergency Management of Environmental Incidents We regularly entrust qualified third parties to monitor wastewater, We have formulated a comprehensive risk factor identification gaseous pollutants, and groundwater. The monitoring results mechanism. In response to emergency environmental pollution showed that all indicators have met the standards. We conduct incidents, we have formulated system documents such as the internal and external environmental audits every year to ensure that Emergency Assessment Report for Environmental Risks, the day-to-day management and operations to comply with relevant Emergency Investigation Report for Environmental Emergency regulations, standards and the requirements of relevant parties. We Resources and the Emergency Response Plan for Environmental have not been subject to any significant fines or penalties related Emergencies. We have set up an emergency response team to to environmental or ecological issues over the past four fiscal years. determine the responsibilities, personnel, technology, equipment, facilities, materials, and coordination needed from all relevant departments, to improve the efficiency of responding to environmental emergencies and the ability to mitigate risks. ENVIRONMENTAL SOCIAL GOVERNANCE SUSTAINABILITY MANAGEMENT, CREATING A LOW-CARBON FUTURE 44
Green Low-Carbon Culture The Company attaches great importance to enhancing the environmental awareness of all employees and regularly carries out training activities on environmental protection. In 2023, we conducted 11 environmental training sessions covering hazardous waste management, hazardous chemical products management, eco-friendliness education and environmental factors identification with a total of over 1,100 participants. XPENG We implement the concepts of green, low-carbon and environmentally-friendly economies into our daily work, supporting our employees to start from small things around them to practice environmental protection concepts within the office. Energy saving Conservation of resources Turn off lights during lunch break, control lighting Promote the use of recycled paper and double-during non-working hours on weekends and sided printing. working days. Save electricity in meeting rooms and use smart Promote multiple initiatives to achieve paperless meeting room booking systems to optimize office in 2023. usage of meeting rooms, reducing energy consumption caused by vacancies or invalid reservations. Provide electric vehicles for employees to use Set up electronic posters in public areas to for field work / commuting. reduce paper consumption. Use energy-saving products. Promote dining in restaurants to reduce the waste of resources caused by food packaging. Encourage employees to travel through public Provide reusable stationery. transportation and provide employees with commuter shuttles. Resource recycling, setting up categorized waste disposal bins and environmentally friendly recycling cartons. Prioritize the purchase of office equipment and furniture made from environmentally friendly, energy-saving and renewable materials. Ecosystem Protection XPENG attaches great importance to the protection of biodiversity and strictly manages all possible impacts on biodiversity during production and operations. Prior to project construction and operations, we engage qualified third parties to conduct ecological impact assessments (in terms of biodiversity, living areas, etc.), comprehensively identify ecological risks and environmental impacts that the project may face during construction and operation, and formulate necessary solutions and protection plans. ENVIRONMENTAL SOCIAL GOVERNANCE SUSTAINABILITY MANAGEMENT, CREATING A LOW-CARBON FUTURE 45
2.2.2 Energy Management [Case Study]: XPENG’s first “photovoltaic energy storage” pilot store XPENG strictly manages energy consumption in production, implements various measures to improve energy efficiency, reduces energy consumption and promotes the use of clean energy. “XPENG Kunming Expo Park Service Center” is XPENG’s first store to use solar power. Relying on the geographical characteristics of its high altitude and abundant light sources in Kunming, as well as the XPENG location advantage of the store’s buildings, the store has installed photovoltaic power generation devices on the balcony of the vehicle showroom on the second floor and the roof of the workshop Energy Conservation on the third floor, The devices were successfully connected to the grid in mid-January 2023, with daily power generation reaching XPENG strictly abides by relevant laws and regulations such as the Energy Conservation Law of the People’s Republic of China and continuously 1.369 MWh. The project can not only meet the power demand of optimizes its own energy management. Each manufacturing plant has formulated an energy management system to standardize procedures such as daily operations of the store, but also support the XPENG Super energy procurement, measurement and usage management, data statistics management and energy-saving transformation, so as to enhance the Charging Station Project, which uses photovoltaic power to bring effectiveness and efficiency of energy utilization, and promote the Company’s sustainable development. In 2024, XPENG will continue to practice green, environmental-friendly, and convenient charging services to energy conservation and emission reduction with the target of lowering energy consumption by 10% per unit vehicle. new energy vehicle owners. Guangzhou Plant Zhaoqing Plant Through independent maintenance of compressed air Through measures such as planned power cuts of factory during non-production stages, energy saving measures in machinery during holidays, intermittent operations of the water cooling systems, loss reduction in air conditioning air-conditioning in the coating workshops, switching off cooling, and energy saving improvements in deodorizing of the main air valve of the non-suppressed air in the fans in sewage stations, energy efficiency is improved, factory department after the shift, and reducing the use promoting energy conservation. of water pumps in the coating workshops, the Company saved 2,360 MWh of electricity, equivalent to a reduction of 1,243 tonnes of carbon dioxide emissions. Clean Energy Continuously expanding the proportion of clean energy usage in its operations is XPENG’s main strategy for green development. The Company’s Zhaoqing plant has completed the construction and operation of the first phase of photovoltaic power generation project in 2021. In 2024, we plan to retrofit the first phase of Zhaoqing’s photovoltaic project to increase the photovoltaic consumption rate, and begin the construction of the second phase of photovoltaic power generation to increase green energy consumption. Guangzhou Plant Zhaoqing Plant The Guangzhou plant cooperated with photovoltaic The distributed photovoltaic (PV) project (Phase I) at the investors to establish photovoltaic power generation Company’s Zhaoqing plant officially commenced grid-projects, which were built for self-use, and any residual connected power generation in November 2021. The power generated is directed towards the regional installed capacity of the Phase I project reached 20.74 power grid. By the end of 2023, the cumulative power MW, adopting the mode of “self-generated and self-used, generation was 18,270 MWh, of which self-consumption and connecting residual power to the grid”. By the end of was about 13,100 MWh, accounting for more than 40% of 2023, the Phase I solar project in the Zhaoqing plant has the total power consumption of the plant; the remaining generated 22,800 MWh of electricity, of which 10,900 5,170 MWh of solar energy is sent to the regional power MWh of solar electricity was self-consumed (electricity grid to reduce carbon emissions of the area. used for production in workshops and composite buildings) and a carbon dioxide reduction of 10.5 million tonnes. ENVIRONMENTAL SOCIAL GOVERNANCE SUSTAINABILITY MANAGEMENT, CREATING A LOW-CARBON FUTURE 46
2.2.3 Water Resources Management Reducing Water Resource Usage XPENG values the protection and conservation of water resources, During the Reporting Period, XPENG’s Zhaoqing production plant XPENG attaches great importance to water resource management, strictly manages wastewater discharge, reduces pollutants in and implements technical transformation on water-related has targeted a 10% reduction in water consumption compared to wastewater, and avoids adverse effects on water resources. equipment and processes of each manufacturing plant to promote 2022. By the end of 2023, this goal has been successfully achieved. the efficient use of water resources. During daily operations, on- In the future, we will further reduce the use of fresh water and duty staff are required to inspect the water pipes and record water wastewater discharge by improving the water consumption through XPENG consumption information daily. If water leaks are found or when recycling and other methods, striving to achieve industry-leading water usage is abnormal, they should be immediately checked and water efficiency targets. Wastewater Management repaired. During production and manufacturing processes, industrial water is used as the main water source within coating processes, The Company’s sources water mainly from municipal water supplies, XPENG has formulated the Water Pollution Prevention and Control Management System to strictly manage wastewater and ensure that any reducing the consumption of fresh water. The model of the welding and there are currently no issues in obtaining suitable water wastewater discharged meets standards. We set up independent sewage treatment stations in the manufacturing plants to ensure that the quality of cooling circulating water system with the beat and temperature sources. During the Reporting Period, there were no incidents of wastewater meets the requirements of the “Discharge limits of water pollutants” (DB44/26-2001) of Guangdong Province. change is established, and the circulating water flow rate is adjusted water pollution or fines. to the minimum power under the premise of meeting the production requirements, so as to reduce the consumption of water resources. Production Wastewater Domestic Sewage Production Wastewater Domestic Sewage In the coating workshops, the Company has adopted Sewage from the canteen is set up with oil separation Recycled gray water is used for toilets and greening, with a Through advanced sewage treatment and reuse of reclaimed zincronization for conversion coating, which can tanks and retention tanks, removing any deposited total usage of 27,732mł in 2023. water, the factory’s air conditioning condensate, drainage avoid the discharge of heavy metal wastewater and food residue, and direct discharge into sewage pipes from cooling towers, water reclaimed from reverse osmosis in effectively protect water resources. are prohibited. The coating factory recycles air conditioning condensate and coating stations, etc. are reused. Recycling water is also used uses gravity circulation waterways, reducing electricity and within cooling towers, greening, infrastructure projects, road All sewage discharge goes through a sedimentation Bathing sewage is discharged into sedimentation water consumption, saving 1,210 tonnes of water annually and watering, painting skids and grille cleaning, reaching a 96% tank and restricted maintenance areas, which is then tanks for retention, in order to prevent any solid waste reducing electricity consumption by 35,200 kilowatt hours. recycling rate of industrial water. discharged into the designated sewage pipelines. such as rags or plastic bags from being discharged into sewage pipes. Water drains are equipped with filters to regularly A three-stage filtration system is implemented for collect and remove oils. sewage discharge from toilets, which is discharged according to the designated sewage pipes. Septic tanks are also regularly maintained. ENVIRONMENTAL SOCIAL GOVERNANCE SUSTAINABILITY MANAGEMENT, CREATING A LOW-CARBON FUTURE 47
2.2.4 Pollutants Management Air Pollutants Management XPENG strictly manages any gaseous emissions generated during For dust and volatile organic compounds (VOCs) generated during production and operation cycles. The Company formulated the the production process, we regularly inspect the replacement of Main air pollutants Processing measures Prevention and Control of Atmospheric Pollution Management activated carbon, as well as the effectiveness of dust control fans. We System and other systems, and strictly takes targeted measures to prioritize technologies and equipment that do not generate pollution Dust After being collected and processed by the exhaust gas collector, dust is discharged through a 15-meter-high exhaust stack, ensure that gaseous emissions meet discharge standards, avoiding or relatively low pollution towards the environment, as well as raw meeting regulatory standards. Small amounts of smoke that are negative effects on the environment. and auxiliary materials with zero/low toxic and low VOCs content to trapped indoors are collected by the roof ventilator fan to ensure minimize the generation and discharge of such pollutants. that it is discharged into the atmosphere for dilution and diffusion after meeting standards. VOCs VOCs are collected through various work-station gas fume hoods, and then adsorbed by the first-order activated carbon filters. After ensuring regulatory standards are met, it is discharged from the exhaust pipes. XPENG Optimization and control measures for VOCs in the coating facilities â^™ Adopting B1B2 water-based coating processes, reducing 15% emissions of VOCs compared with traditional processes, reducing the organic pollutants at the source. â^™ Adopting the latest regenerative thermal oxidizers in the industry, the device can fully burn and isolate the organic pollutants in the waste gas, with a removal rate of 95% or more, and effectively purify any organic pollutants. â^™ Implement measures such as controlling the consumption of solvents for cleaning, reducing cleaning frequencies of robotic coating devices for switches in coatings, optimizing process parameters and procedures, etc. have also been taken to reduce VOCs emissions. Gaseous emissions management measures in welding workshops and coating plants â^™ Welding workshop: Use high-efficiency filter dust collectors to absorb smoke and dust, with a dust removal efficiency of 99%; mobile welding purification machines are set up, where welding flue gas is discharged into the workshop after being purified by the machines and meeting standards, improving the internal working environment and effectively reducing exhaust emissions. â^™ Coating factory: Gaseous emissions are reduced through measures such as controlling the consumption of solvents for cleaning, reducing the frequency of cleaning for robotic coating devices for switches in coatings, and optimizing process parameters and procedures. In 2023, XPENG emitted 0.4 tonnes of sulfur oxide, 3.8 tonnes of nitrogen oxide and 15.0 tonnes of particulate matter. In the future, we will continue to reduce the emission of nitrogen oxides, sulfur oxides and particulate matters per unit to protect air quality. ENVIRONMENTAL SOCIAL GOVERNANCE SUSTAINABILITY MANAGEMENT, CREATING A LOW-CARBON FUTURE 48
Waste Management Noise Pollution In compliance with relevant laws and regulations, we have established a comprehensive waste management system and formulated internal In response to the noise generated during the production process, we have formulated the Noise Pollution Management Control Procedures. management systems such as the Solid Waste Pollution Prevention and Control Management System and the Hazardous Waste Management Based on the different characteristics of the noise source, we adopt measures such as low-noise equipment, wall noise insulation, installation of Procedures to manage and control waste through classification, transportation and removal. During the Reporting Period, the Company’s Safety shock absorption base and noise barriers. Construction sites should carry out necessary noise sound-level measurement in accordance with the and Environmental Protection Department organized an important hazard assessment of our hazardous waste storage warehouse, analyzed and corresponding specifications to ensure the noise reaches the standard limit and obtain approval from the environmental protection department identified potential environmental and safety risks, and carried out emergency drills for solvents leakage accidents to improve the ability to respond when necessary. to sudden waste pollution and safety incidents. XPENG Waste management measures Storage placement Set up a solid waste storage room to classify, recycle and process metal scraps, waste packaging materials, hazardous waste, domestic waste, etc., with daily cleanup. The storage site is treated with cement hardening and anti-seepage treatments, and ground leakage collection trenches are installed to avoid environmental pollution accidents. The storage site is equipped with dry powder fire extinguishing systems, combustible gas monitoring systems, central air conditioning, electrostatic discharge devices and other safety measures to effectively avoid environmental pollution incidents. Transition processing Signed a waste disposal contract with a qualified third-party unit and conduct waste transition and treatment in accordance with the “Measures for the Management of Hazardous Waste Transfer”. All hazardous waste entering the warehouse is weighed, recorded, and dealt with in a suitable manner. Establishing a solid waste management system, keeping track of waste disposed, and entrusting a qualified third party to handle the waste, ensuring that the waste is properly disposed of. Hazardous waste reduction Reducing the generation of hazardous waste by increasing the glue coating pressure plate to reduce glue residue, adding lining within the glue barrel, and reducing the use of solvents (particularly reducing the frequency of varnish cleaning and increasing the ratio of water-based solvents). At the beginning of every year, we formulate a waste management plan to clarify the total amount of waste produced and unit production targets, and conduct monthly analysis and improvements. In 2023, our target of 2% reduction in waste organic solvents production has been successfully achieved, and the actual production volume decreased by 3%. The Company recycled 3,225.97 tonnes of waste throughout the year. The Guangzhou plant has achieved the recycling of all industrial solid waste, such as industrial scrap steel plates and waste cardboard. In the future, we aim to continue to reduce waste discharge density through non-hazardous treatments and resource management processes. ENVIRONMENTAL SOCIAL GOVERNANCE SUSTAINABILITY MANAGEMENT, CREATING A LOW-CARBON FUTURE 49
03 Compliance Management, Creating a Solid Foundation for Development XPENG has consistently improved its internal management system, continuously identifying and controlling internal risks, as it adheres to relevant business ethics at all times. In our efforts to propel compliance management, we will continue to strengthen supervision and training systems, enhance compliance awareness, and persist in being honest, authentic, transparent and responsible in our business practices, driving the sustainable development of the Company and contributing to the harmony and stability of our society. 15,880hours 36sessions Over 15,880 hours of anti-corruption Compliance awareness training training hours sessions covering all employees E XP LOR E R O F F U T U R E M O B I L I T Y ENVIRONMENTAL SOCIAL GOVERNANCE COMPLIANCE MANAGEMENT, CREATING A SOLID FOUNDATION FOR DEVELOPMENT 50
3.1 Compliant Operations XPENG strictly follows the Company Law of the People’s Republic of China, the New York Stock Exchange Listed Company Manual, the Rules Governing the Listing of Securities of The Stock Exchange of Hong Kong Limited, and other laws, regulations, and guidelines. We continuously strive to build up a scientific, orderly and dynamic sustainable development governance system and strengthen corporate governance. XPENG 3.1.1 Corporate Governance Structure XPENG continues its efforts to improve its corporate governance structure by closely following the latest regulatory requirements. The General Meeting of Shareholders acts as the Company’s highest decision-making body, which exercise its decision-making rights on the Company’s material matters such as business strategies and policies, financing, investment and profit distribution in accordance with relevant laws and regulations, as well as the Company’s Articles of Association. The Board is accountable to the General Meeting of Shareholders and exercises the rights of overseeing and managing the Company’s development strategies and business operations in accordance with relevant laws and regulations. Furthermore, the Board is responsible for decision-making on operating principles and investment plans, supervision and advisory for management to develop and fine-tune policies and procedures, strengthening decision-making mechanisms, standardizing operational processes, implementing stringent approval processes, building and enhancing a modern and effective organizational structure, and improving efficiency and effectiveness of investment decisions. In order to improve its work efficiency, the Board has established four professional committees, namely the Audit Committee, the Compensation Committee, the Nomination Committee and the Corporate Governance Committee. Shareholder’s Meeting Audit Committee Compensation Committee ESG Steering Committee Board of Directors Nomination Committee Corporate Governance Committee Sales and Internal Capital Product Manufac- Supply Adminis-Legal Finance Branding IT HR Services Control Market & R&D turing Chain trative Functions Functions Functions Functions Functions Functions Functions Investment Functions Functions Functions Functions ENVIRONMENTAL SOCIAL GOVERNANCE COMPLIANCE MANAGEMENT, CREATING A SOLID FOUNDATION FOR DEVELOPMENT 51
3.1.2 Compliance Management XPENG believes that operating a business with ethical and legal responsibilities is the premise for sustainable business development. To put the Company’s core values and action guidelines into practice, we comply with applicable laws and regulations in different jurisdictions, and continuously improve our compliance management systems in reference to international standards and initiatives, ensuring the compliance of the Company’s organizational structure and decision-making mechanism. XPENG Compliance Training The Company enhanced the compliance awareness of internal employees by conducting compliance training. Since June 2023, the Legal Department of the Company has been holding “information confidentiality” themed training sessions requiring all employees’ attendance. By the end of 2023, a total of 6 episodes of online knowledge feeds and 23 tailored training sessions were delivered and made accessible to all employees, gaining positive feedback and support. 36sessions 23sessions Number of compliance awareness training sessions for Number of training sessions on compliance requirements all employees tailored for specific departments and countries (European) ENVIRONMENTAL SOCIAL GOVERNANCE COMPLIANCE MANAGEMENT, CREATING A SOLID FOUNDATION FOR DEVELOPMENT 52
3.1.3 Responsibilities of the Board 3.1.4 Investor Rights The Board performs regular assessments on the effectiveness of the Company’s internal controls in compliance with relevant listing XPENG complies with laws and regulations for listed companies to ensure fair treatment to all shareholders. The Company has rules and requirements and applicable laws and regulations in order to protect the rights and interests of its shareholders. The established an internal control system, a clear investor communication strategy to prevent insider trading and avoid conflicts of Company’s senior management is responsible for the Company’s production, business operations and overall management, which interest. The communication strategy also determines the means and frequency of communication of key information to investors. includes leading the execution of Board resolutions, establishing annual plans and investment projects, formulating specific corporate rules and policies, and performing other authorities and responsibilities granted by the Company’s Articles of Association or the We held our Annual General Meeting on June 20, 2023 and implemented a comprehensive investor relations management through Board. In order to carry out routine business operations in an orderly manner, the Company has established a set of policies, systems, a variety of measures. In addition, we attach great importance to the information disclosure practices, and regularly publish and guidelines covering R&D, procurement, production, sales, human resources, finance, etc. quarterly and annual financial reports, business updates and important event announcements, ensuring that investors can access the Company’s operational and financial results in a timely and accurate manner. During the Reporting Period, in order to provide XPENG investors with an in-depth understanding of the Company’s business model, technological advantages and market strategy, we organized regular or special investor events, providing opportunities for investors to directly communicate with senior management. Independence of the Board Board Diversity We have established a dedicated investor relations website, on which the latest Company news, financial information, regulatory filings and investor education resources are easily accessible to all investors. Meanwhile, the Company has set up a dedicated email for As of the date of this report, the Company’s Board consisted of six The Company has applied the Nomination Policy for Directors and the investors to contact us and provide feedback, encouraging shareholders and potential investors to email us questions or suggestions, members, three of whom were Independent Non-Executive Directors Board Diversity Policy. Various factors are taken into considerations so that the Company can timely handle and address investor inquiries. (INEDs), accounting for 50% of the total. The Company complies with including industry experience, professional background and education the independence requirements set out in the Listing Rules of the Stock background during nomination and appointment of Directors, so as to Exchange of Hong Kong, and regularly sends a confirmation letter of satisfy the diversified skills and experience required for the development independence to each of the INEDs after the fiscal year-end date of of various businesses. Increasing the proportion of women on the Board 31st December in accordance with Rule 3.13 of the Listing Rules of the is also under active consideration. As of the date of this report, the Board Stock Exchange of Hong Kong. Each of the INEDs of the Company shall consists of one female Director. The industry experience of Directors reply with the confirmation on his/her independence as required in the includes internet technology and services, smart automotive research confirmation letter of independence. The Company will then disclose the and development and manufacturing, strategic investment, etc. More independence confirmation of the INEDs in the annual report. In 2023, the specifically, two INEDs have experience in the consumer industry, three Company convened seven Board meetings and the attendance rate of all INEDs and one Non-Executive Director have corporate governance Directors who should have attended the meetings reached 100%. experience with risk management businesses. At the same time, the Company continuously evaluates and monitors any room for improving Board diversity to enhance its level of corporate governance. ENVIRONMENTAL SOCIAL GOVERNANCE COMPLIANCE MANAGEMENT, CREATING A SOLID FOUNDATION FOR DEVELOPMENT 53
3.2 Risk Control The Company refers to the internal control framework of The Board is the highest authority and decision-making the COSO (the Committee of Sponsoring Organizations body for the Company’s risk management. As of the date of the Treadway Commission) and the Sarbanes-Oxley of this report, within the Board, three Independent Non-Act Section 404 to establish our corporate-level risk Executive Directors and one Non-Executive Director had management framework and related risk management policies risk management expertise. Additionally, one Non-Executive to comprehensively manage operational risks. The Company Director and two Independent Non-Executive Directors established a series of processes including risk identification, constitute the Audit Committee of the Company so as to risk assessment, risk response, problem-solving, debriefing ensure that risk management is performed independently review, follow-up control and checks to manage various risks, of the business operations. Moreover, we have established realizing closed-loop risk management. financial incentives for senior executives, direct managers, and others involved according to risk management indicators, and strengthen the implementation of risk management measures. XPENG 3.2.1 Risk Identification and Assessment In 2023, the Company identified major risks such as R&D XPENG establishes a long-term financial model, predicts risk, market competition risk and capital risk based on possible future financial situations, and conducts sensitivity national policies and market environment changes, its own t e s t s o n m a j o r b u s i n e s s a s s u m p t i o n s /r i s ks , m a r ke t operations and the concerns of various stakeholders. The assumptions/risks, and financial assumptions/risks, analyzing Company conducts scenario analysis, sensitivity analysis their impact on the business, including but not limited to and stress tests on financials and businesses with significant product sales volume, raw material costs, number of stores risks, evaluates the possible financial and business impacts and charging stations, risk-free interest rates, loan interest under general, most unfavorable and best-case scenarios, rates, exchange rate risks, industry competition and talent as well as conducts risk prevention and risk management market competition. assessments and formulates alternative plans. At the same time, XPENG timely identifies possible internal and external risks and regularly reflects and improves the Company’s risk management model and internal control processes. ENVIRONMENTAL SOCIAL GOVERNANCE COMPLIANCE MANAGEMENT, CREATING A SOLID FOUNDATION FOR DEVELOPMENT 54
3.2.2 Risk Management and Monitoring The Company attaches great importance to the effectiveness of corporate risk management and internal control. The Board is responsible for establishing and maintaining the Company’s sound and effective risk management and internal control systems. On behalf of the Board, the Audit Committee audits the development, implementation and supervision of risk management and internal control systems on a quarterly basis and determines the effectiveness of the risk management and internal control systems on an annual basis. The Company conducts internal control management audits and special audits on a quarterly basis, covering all businesses such as sales, supply chain management and R&D. Based on the risk assessment of the business and the reported indicators, the Company formulates audit plans and conducts relevant inspections. The Company also formulates rectification measures and follows up on the completion of rectification for any risks and control deficiencies identified, so as to ensure the effective operations of the internal risk management system. In 2023, all business operations were internally audited for risk. To ensure the effectiveness of the risk management and internal control systems, the Company established an internal control model based on “three lines of defense:” XPENG 01 The first line of defense The first line of defense is mainly composed of the Company’s business and functional departments in charge of daily operations and management. These departments design and implement relevant control measures and risk responses. 02 The second line of defense The second line of defense is mainly composed of finance, internal control, legal, Quality and Safety Management Center departments, among others. Their key responsibilities are to assist the first line of defense in establishing and improving the risk management and internal control systems, as well as to oversee and ensure its effectiveness. 03 The third line of defense The third line of defense is mainly composed of the audit team and the supervision team within the internal control department. The audit team regularly carries out independent evaluations to ensure the effectiveness of the Company’s risk management and internal control system. In order to ensure its independence, the audit team reports directly to the Audit Committee. The supervision team regularly assists management in promoting integrity and ethical values to all employees, as well as handling any reports of corruption. ENVIRONMENTAL SOCIAL GOVERNANCE COMPLIANCE MANAGEMENT, CREATING A SOLID FOUNDATION FOR DEVELOPMENT 55
3.3 Business Ethics 3.3.1 Risk Management and Monitoring XPENG has a zero-tolerance approach to any form of The Company incorporates integrity statements and XPENG is committed to upholding corporate business ethics, encouraging all employees to participate in monitoring and reporting. corruption in conducting business. The Company strictly confidentialit y clauses into agreements with third- Through continuous integrity training, the Company strives to ensure that each employee understands and complies with its high complies with such laws and regulations as the Anti-Money party partners and requires suppliers to sign an Integrity standards of behavior and norms, and jointly creates an honest and transparent working environment. Laundering Law of the People’s Republic of China, the Commitment Letter upon their bid submission. Meanwhile, we Supervision Law of the People’s Republic of China, and include integrity-related clauses into contracts to be signed the Anti-Unfair Competition Law of the People’s Republic with suppliers. We immediately stop cooperation with any Misconduct Reporting Integrity Education of China. The Company also formulates a series of internal suppliers that violate the Company’s integrity standards and systems including the Employee Code of Conduct, the Code pursue legal remedies for infringement. In 2023, 100% of our The Company actively conducts integrity and fraud reporting through At XPENG, we carry out various ongoing training activities with regard of Integrity and the Administrative Measures of Conflict of suppliers signed the Integrity Commitment Letter. multiple channels. The Company has made available multiple misconduct to integrity education, values, code of conduct, and law & regulations Interests, specifying the Company’s anti-corruption and reporting channels, including via email (report_xp@xiaopeng.com), hotline to Board members, management, regular employees and outsourced sanctions policies and emphasizing its code of business and WeChat, all of which are published on its official website to allow employees of the Company. conduct and ethics. customers, suppliers, media, investors and internal employees to report or leave complaints. While we encourage reporting using real names, we also We regularly share with the management and all staff the value of integrity. The Company has adopted strict control measures to clearly accept anonymous reporting. We will launch an immediate probe into any All new hires are required to participate in trainings in our code of conduct define the behavior of corruption and bribery, such as bribery, submissions that are deemed worthy of investigation. The Company has to ensure a clear understanding of the Company’s values and code of kickbacks, improper benefits, money laundering, etc. In established a standardized process for handling misconduct complaints, conduct. In addition, the Company and its business departments also addition, the Company’s system specifies the working rules in which the internal control department will arrange designated personnel carry out code of conduct training either regularly or from time to time, as and discipline of employees and incorporates compliance to conduct an investigation in a timely manner when a misconduct part of our ongoing effort to promote the awareness of compliance and behavior of employees into their performance reviews. We report is received, and a final investigation report will be submitted to the integrity among all staff carry out business ethics-related audit work, accurately chairman of the Board of Directors. identifying and preventing internal business ethics risks, In 2023, we regularly carried out anti-corruption training for different and ensuring the legality, transparency and integrity of the The Company strictly protects the personal information of complainants departments, with a total of 16,760 participants and a total of 15,880 Company’s business activities. and whistle-blowers, so that only personnel in charge of the reported training hours. In addition, the Company promoted the establishment cases have access to the complainant’s information and make of special teams by various departments to implement an information connections. It is forbidden to take retaliatory actions against employees leakage prevention system construction project, reaching all first-level XPENG who raise concerns or complaints, which is clearly stated in the Company department employees online and offline, and successfully completing the policies. In addition, in the case of a reward being granted to an informant, training and examination of information confidentiality for all employees. the sponsor investigator shall apply for the reward being transferred into During the Reporting Period, the Company conducted a total of 24 offline the “Integrity at XPENG” account or other secure non-personal account trainings and two “XPENG Class” recordings, with over 15,000 employees from which the money is directly transferred to the informant, keeping the participating in the trainings. transfer record sealed in the case file. In 2023, there were 0 concluded cases of corruption and business ethics violations filed by the Company. In the past four financial years, there were 0 fines or settlements related to anti-competitive practices. 15,880+hours 92times 16,760participants 80times Total employee anti-corruption Anti-corruption training Participation in employee anti- Risk management training hours sessions corruption training training sessions ENVIRONMENTAL SOCIAL GOVERNANCE COMPLIANCE MANAGEMENT, CREATING A SOLID FOUNDATION FOR DEVELOPMENT 56
04 Creating Value and Contributing to Unified Development XPENG firmly believes that talent is the cornerstone of sustainable development. It strives to build a high-quality professional talent team and continuously improve the Company’s talent management model. The Company protects the legal rights and interests of all employees, protects employees’ private information from infringement, and strives to build a healthy and safe working environment, comprehensively caring for employees’ work and personal life. At the same time, we continue to build a responsible supply chain, actively performing our social responsibilities, and coordinating the sustainable development of all parties. 5Awards 100% 12.8 million CNY Won 5 Employee-related 100% signing rate of the Donated 12.8 million CNY Awards Supplier Integrity Commitment to XPENG Public Welfare Letter Foundation E XP LOR E R O F F U T U R E M O B I L I T Y ENVIRONMENTAL SOCIAL GOVERNANCE CREATING VALUE AND CONTRIBUTING TO UNIFIED DEVELOPMENT 57
4.1 Employee Health and Development Employees are XPENG’s most valuable asset. The Company adheres to the principle of being people-oriented, protecting the basic rights and interests of employees in accordance with the law. The Company contributes to the growth and development of employees, implements diversified care, and continuously improves the sense of achievement and happiness of its employees. 4.1.1 Employee Rights Protection XPENG is committed to promoting and protecting the basic rights of employees, strictly complying with Social Accountability 8000, the Global Sullivan Principles, the UN Guiding Principles on Business and Human Rights and other domestic and international standards and commitments. The Company complies with labor regulations, conducting due diligence processes for human rights and interests, and has established a comprehensive employee protection system to protect the basic rights and interests of employees, promoting the sustainable and healthy development of the Company. Labor Rights Due Diligence Process XPENG In-depth analysis and assessment of potential human rights 01 and risks, including legal employment, timely payment of labor Risk identification remuneration, employees’ working hours, working environment, etc. Formulated the Employee Code of Conduct V2.2 and the XPENG 02 Anti-harassment System to ensure that employees are treated fairly Preventive measures and reasonably. Through regular inspection and evaluation of employees’ rights, 03 and timely collection of employees’ feedback and suggestions, we Supervision and detection continuously improve the existing system, such as by understanding employees’ problems through a monthly psychological consultation report of the EAP program, and establishing a long-term medical leave ledger to pay attention to employees’ health problems. Established employee complaint channels and set up a special 04 complaint handling team to ensure the effective implementation of Impact mitigation human rights management, reducing risk impact. ENVIRONMENTAL SOCIAL GOVERNANCE CREATING VALUE AND CONTRIBUTING TO UNIFIED DEVELOPMENT 58
Equal Opportunities The Company complies with the Labor Law of the People’s Republic of XPENG strives to improve our employer branding through campus China, the Labor Contract Law of the People’s Republic of China and recruitment and has obtained unanimous recognition from college In 2023, XPENG won the following awards for the best employer other laws and regulations, and implements the Recruitment Management students through campus talks, online presentations and fireside chats. In Rules and Regulations. In the process of recruitment, entry, training, the future, we will deepen our joint talent training program with universities Liepin: 2023 Guangdong Annual Maimai: 2023max ‘ Who’s the Best promotion and compensation, discrimination on the grounds of gender, to ensure that more outstanding students are recruited and provided with Extraordinary Employer Employer age, race, nationality, religion or other social and personal factors is career guidance and discussion on R&D topics to build a comprehensive prohibited. In accordance with the law, the Company offers equal job employer brand. Zhaopin: 2023 Best Employer – Guangzhou Xinhua: 2023 Global Employment opportunities to all employees and candidates. Best Employer Contribution Enterprise The Company launches human resources planning every year in The Company provides work opportunities for the disabled based on November. Based on the business planning of each department and Shixiseng: 2023 Most Attractive Employer actual conditions. In 2023, we hired a total of 89 disabled employees, the budget needs of the Company, we adopt various methods, such as and require suppliers and partners to abide by the laws, regulations and the labor efficiency post-determination method and business process provisions with respect to equal employment. analysis method to formulate our human resources planning framework for the next year. The plan sets the foundation for recruitment and provides XPENG is committed to building a diverse, inclusive, and equal working guidance for reasonable allocation of human resources and support for environment. The Company encourages and respects diversity of talent smooth business development. We actively build our talent pool and and culture, and provides anti-discrimination and anti-harassment training conduct human resources analysis every year to meet the talent needs of for all employees. Through associated complaint procedures, all employees various business lines of the Company. At the same time, for employees XPENG can report anti-workplace discrimination, harassment and insult. If claims are who are not suitable for their current positions, we provide internal transfer substantiated, offenders will be subject to disciplinary action or dismissal to opportunities to better match employees’ skills with the Company’s needs. fully protect the rights and interests of impacted employees. XPENG strictly abides by overseas local employment compliance requirements and has formulated the Recruitment Regulations Xpeng for Overseas. The Company signs labor contracts with overseas employees in accordance with the laws and regulations of the places where the Company operates, ensuring that contract content meets all relevant regulatory standards. Meanwhile, we actively provide local legal benefits, including but not limited to social insurance, to protect employees’ rights and interests. On the basis of recognizing and respecting local culture, we also provide local statutory holidays in line with statutory standards to promote work-life balance for employees. ENVIRONMENTAL SOCIAL GOVERNANCE CREATING VALUE AND CONTRIBUTING TO UNIFIED DEVELOPMENT 59
Indicator Unit 2021 2022 2023 Total number of employees Person 13,978 15,829 13,550 Number of part-time/internship employees Person 1,166 802 817 Number of new employees Person 8,894 7,910 3,795 Number of employees with disabilities â¹ Person 50 114 185 Proportion of employees by gender Unit 2021 2022 2023 Male employees % 79.0 80.4 80.4 Female employees % 20.2 19.4 18.1 Undisclosed % 0.8 0.2 1.5 Proportion of employees by employment rank Unit 2021 2022 2023 Senior management % 0.2 0.1 0.1 Middle management % 10.2 9.0 9.5 Ordinary employees % 89.6 90.9 90.4 Proportion of employees by age Unit 2021 2022 2023 29 years old and below % 45.7 46.6 39.9 30-49 years old % 52.1 51.3 58.0 50 years old and above % 0.3 0.3 0.2 Undisclosed % 1.9 1.8 1.9 Proportion of employees by region Unit 2021 2022 2023 Chinese mainland % 97.8 98.5 97.9 Hong Kong, Macao and Taiwan % 0.1 0.2 0.2 Other regions % 2.1 1.3 1.9 Note: 9. This refers to the total number of employees with disabilities. ENVIRONMENTAL SOCIAL GOVERNANCE CREATING VALUE AND CONTRIBUTING TO UNIFIED DEVELOPMENT 60
Labor Compliance XPENG adheres to international guidelines on human rights during In order to strengthen human rights protection, we conduct regular its global business operations, including the Universal Declaration human rights risk assessments covering all employees of the Company of Human Rights, the Guiding Principles for Business and Human and its subsidiaries, and incorporate the human resources review Rights, the International Labor Standards of the International Labor process into the risk management process to verify employment Organization and the self-governing principles on security and human compliance. Since the establishment of the Company, we have not rights. We are strongly committed to recognizing human rights issues, violated the employment laws, regulations or relevant guidelines of the respecting the culture, customs and language of all regions of the places where we operate, nor have we experienced any incidents of world, and strive to coordinate with communities of all countries when child, forced or compulsory labor. carrying out business activities. XPENG strictly prohibits any operational units and partners from child labor and forced labor. We insist labor contracts be signed by all regular employees, as well as intern and temporary workers. All personnel applying for Company positions must complete relevant procedures with their identification documents to ensure that they meet the legal working age and requirements. At the same time, the Company verifies the compliance of employment and follows up on and investigates any suspected child, forced or compulsory labor, taking effective measures to prevent similar incidents in the future. If any child labor or forced labor is found, we will immediately terminate the employment relationship and handle it in accordance with the law. XPENG HR Review Process 01 02 03 04 05 Step 1 Step 2 Step 3 Step 4 Step 5 According to the Standard Interview During the interview process, HR The offer approval process reaches The Company conducts background checks Conduct anti-fraud compliance Process for Social Recruitment, inter views are conducted and a a certain level to ensure that the on employees above a certain level and inquiries on select personnel with recruiters check the basic information comprehensive determination of the employment meets the Company’s job for certain special positions in accordance reference to the Anti-Fraud Alliance of personnel, their employment status, candidate’s experience and ability is made requirements. with the “Background Investigation Norms compliance requirements to confirm and whether they have prior identified based on the “Community Recruitment and Procedures Guidelines” and provides a that prospective personnel meet prohibition of business strife. Position, Salary and Offer Approval.” formal background investigation report. applicable requirements. ENVIRONMENTAL SOCIAL GOVERNANCE CREATING VALUE AND CONTRIBUTING TO UNIFIED DEVELOPMENT 61
XPENG updated its the Employee Code of Conduct in 2023, with To safeguard the legal rights and interests of the Company and its Composition of Benefits particular regard to compliance-related matters. The new Code employees, and to ensure open communication between employees of Conduct explicitly prohibits the employment of child labor, and and Company management, XPENG encourages employees to make explicitly prohibits the use of any product or service provided by complaints in a reasonable and timely manner through complaint any enterprise involved with child labor. The Company will not force channels. In 2023, we received no employee complaints regarding We provide domestic regular employees/consultants who have employees to work against their will under any circumstances. In discrimination, harassment, fraud or human rights issues. addition, the Company is firmly opposed to human trafficking and does been employed for six months or more with industry-standard 01 medical checkup packages, and offer a variety of medical checkup not tolerate any form of corporal punishment, physical assault, verbal upgrades at better-than-market prices for employees, as well Annual medical checkups as better-than-market plans and prices for employees’ spouses, threats, etc. to enforce work discipline and control employees. children, and parents to purchase on their own. XPENG We purchase commercial insurance for all employees every year, Employee Benefits including term life insurance, critical illness insurance, accident 02 insurance, and medical insurance, and provide better-than-market plans and prices for employees’ spouses, children, and parents to The Company has formulated a Salary Management System to ensure We provide employees with a variety of remuneration and benefits, including Commercial insurance purchase on their own. that employees enjoy a competitive remuneration and diversified basic salary, annual promotions, salary adjustments, year-end bonuses welfare system in the global market, with clearly defined salary and shares. As of 2023, the average salary range of the Company’s male composition, stock policies, tax regulations and welfare management and female employees was approximately equal. In addition, we provide in different countries to improve employees’ satisfaction and provide interns and dispatched employees with competitive salaries, including salary them with comprehensive benefits. incentives, performance bonuses and a series of non-salary benefits that reflect the value and care XPENG places on all of its employees. 03 In order to meet the requirements of the National Occupational Health Examination, the Company will provide mandatory medical Occupational health examination examinations at qualified institutions for required employees at the Company’s expense when they join or leave the Company. We purchase overseas business travel insurance for employees 04 on short-term overseas business trips, providing them with 24-hour insurance coverage during their business trips, with insurance Overseas business travel insurance covering multiple countries and regions. 05 For female employees, we provide separate, hygienic and comfortable breastfeeding rooms. Women’s benefits 06 In case of serious illnesses borne by the employee himself/herself or his/her immediate family members, the Company can provide a Compassion plan loan of 50,000 CNY to the employee without interest with a one-year maturity. ENVIRONMENTAL SOCIAL GOVERNANCE CREATING VALUE AND CONTRIBUTING TO UNIFIED DEVELOPMENT 62
Democratic Management Valid suggestions of improvement or opinions can help the Company improve its operations and management. We pay attention to employees’ opinions and have established online and offline communication and feedback channels for employees to strengthen communication, improving their work experience. In 2023, we launched the “Hulk Feedback Platform” to provide all employees with channels for anonymous feedback and opinion collection, carrying out regular rectification based on the collected opinions. Employee communication and feedback channels Offline means of communication 1-to-1 communication platform: 30’ Listening Letters to all staff “XPENG people” WeChat official account Online means of communication “XPENG’s Words” Feishu subscription Hulk Feedback Platform XPENG Employee Privacy Protection The Company attaches great importance to protecting the privacy of In addition, before collecting personal information from employees its employees. The Company specifies the management requirements for signing contracts, the Company will convey the XPENG Personal for confidentiality in the Measures for the Administration of Data Privacy Policy to parties involved, and adopt measures to separate Information Disclosure, and takes severe disciplinary actions against and preserve the personal information of employees both within and any identified leaks. We have set up a standardized approval process outside Chinese borders. Employees’ personal information is stored for the use of employee data to protect employee data from in the People’s Republic of China. If cross-border transmission is abuse and misuse by controlling data confidentiality classification required, XPENG will seek separate authorization from employees or and carrying out approval with business, legal affairs and human implement measures such as data de-labeling before any cross-border resources departments. In addition, we have built a comprehensive transfer. In accordance with the requirements of laws and regulations, data management and control system across five primary aspects: the Company may provide relevant guidelines or paths for employees data classification and grading, data grading control measures, data to access, copy, correct, supplement, transfer and request to delete authorization and approval matrix, data de-labeling principles, and data their personal information. At the same time, the Company only retains retention and expiration processing methods. In 2023, the Company employees’ personal information within the period necessary for the released the Information Security Confidentiality Management purpose stated in the privacy policy. After the storage period of the System and Data Compliance Management Procedures, which listed above personal information is expired, the Company will delete or employees’ salary and social security information, employees’ human anonymize employees’ personal information to fully protect employees’ resources information and employees’ personal files as confidential privacy and security. information. Information involving employees’ private information is not allowed to be externally released without authorization and approval, The Company did not receive any penalties for violating personal so as to prevent any form of information leakage. information protection regulations in 2023. ENVIRONMENTAL SOCIAL GOVERNANCE CREATING VALUE AND CONTRIBUTING TO UNIFIED DEVELOPMENT 63
4.1.2 Supporting Employee Development Smooth Promotion Channels XPENG focuses on being “growth-oriented,” providing all employees with diversified career development opportunities. We continue The Company has established a standardized rank and promotion system, setting up a fixed promotion window each year to provide employees with an to empower employees, and focus on and promote the core competitiveness, innovation and reform power for the Company’s upward development path, and facilitating the continuous development of employees and the Company. All employees can participate through nomination sustainable development. by their supervisors. The assessment criteria are based on the qualifications of each position. Assessment personnel cover the heads of the organization, supervisors and human resources departments to ensure that the promotion process is fair, just and open. We also ensure development opportunities for all employees and provide incentives to retain outstanding talent. Performance Incentives Employee Training Based on the “Performance Management System,” XPENG has established the OKR management system. Additionally, in view of the scientific nature XPENG provides employees with a comprehensive training management system through the Training Management System and Management Measures for of the performance review, XPENG has conducted repeated optimizations of the entire performance management process, as well as the introduction Internal Trainers and other systems to promote employees’ learning, growth and opportunities to fully tap into their potential. We continue to optimize the of new assessment pilots for certain positions. We review employees’ individual performances across three main aspects: employees’ past growth, peer “XPENG” training system by providing systematic training for course tutors based on the Company’s future strategic development and employees’ career performance benchmarking and work improvement. We stress that the management’s performance evaluation should cover three dimensions, namely development needs. Meanwhile, we have introduced a series of management, professional and general courses to enrich the system’s curriculum. We are team performance, team management and employees’ personal growth. The Company performs regular assessments and uses assessment results as committed to building a high-quality talent team through the combination of the online Feishu knowledge platform, XPENG Class online learning platform performance appraisals. Meanwhile, the Company conducts annual salary reviews for employees’ combined income of cash and stock. The assessment and offline teaching. results are directly linked to annual general salary reviews, annual promotions and year-end bonus distributions, among other aspects. A share incentive plan is also implemented to align the interests of shareholders and management and to effectively motivate employees. The “Seven Principles of Management” is a code of conduct for 01 all management teams, requiring them to deeply understand and “ Seven Princip les of M anag ement ” act in a consistent manner that adheres to the code of conduct. We have formulated corresponding strategies and guidelines, and Empowerment organized Company managers to study and discuss topics within In 2023, in order to stimulate employees’ innovation and service enthusiasm, we set up the following awards for all employees: the code of conduct. XPENG Based on “customers’ awareness” and “improvement in operational Based on the business needs of various departments, we 01 efficiency,” the award has been given to 34 key innovation projects. 02 conducted a total of 43 special employee empowerment trainings Innovation Achievement Award In addition, after considering more than 400 ratings from internal in 2023, covering a total of 21,870 participants. car owners on an anonymous basis, we selected the TOP10 most Professional Skills Training popular innovation projects among internal car owners. The award mainly targets outstanding talent highlighting 02 top performers in R&D innovation, customer service and Annual Outstanding Individual Award business management. The award was established at the “1024 Technology Day” to collect 03 outstanding and creative ideas from XPENG car owners and all Annual Golden Brain Proposal employees, allocating internal experts to empower and incubate the selected TOP10 most popular proposals. ENVIRONMENTAL SOCIAL GOVERNANCE CREATING VALUE AND CONTRIBUTING TO UNIFIED DEVELOPMENT 64
Professional Skills Certification Training Times and Plan Coverage Training content Employees Covered In 2023, XPENG continued to optimize the training for skilled personnel, standardizing the preparation and implementation of various tasks such as policy assistance, online enrollment and organizational training, and conducted qualification assessments for technicians this year. Based on the work content Plan X Management Systematically enhance the management awareness Four events had been launched and requirements of the Company, we examined the candidates’ work performance, professional skills, innovative thinking and other capabilities as well as and team management abilit y of the senior as of December 2023, covering management and provide relevant guidance, around 400 middle and senior technical management in a multi-dimensional manner. As of the end of the Reporting Period, a total of 219 employees were assessed, among which 197 improving organizational efficiency and enhancing Company managers. organizational synergy and cohesion. employees passed the assessments and obtained vocational skill level certificates. Plan P Middle Focusing on the Company’s middle management, Company-level Elite Program: management the Company conducts special training projects and Two phases were launched in XPENG empowerment across key areas including cultural 2023, covering around 80 core strategy, role perception, the Seven Principles of managers with high potential; Management and business management. Center-level Training Projects: In 2023, a total of 11 training “XPENG” Training System sessions were conducted, covering about 70 middle-level core managers. To provide targeted training for different types of employees, we developed training programs such as Plan X, Plan P, Plan E, Plan N and Plan G to meet the training needs of employees at all levels. Plan E General Foundational classes: Focusing on the Company’s general In 2023, a total of two training management managers, the Company adopts the OMO10 model to sessions were conducted, carry out special training projects and empowerment in covering a total of 80 primary-cultural strategy, role perception, the Seven Principles of level managers of each center. Management and business management. Plan N All staff Focusing on professional employees within As of December 2023, the the Company, the Company carries out special Company carried out 10 special training projects and empowerment , on key empowerment activities, covering topics such as personal management, business 150 core HR employees. management, team management and professional improvement, leveraging resources from both headquarters and centers. Special training for business “HR Empowerment”: W e c o n d u c t s p e c i a l t h e m e e m p o w e r m e n t highlighting the importance of HR, focusing on HR role perception, professional knowledge and professionalism, and systematically improve the ability of HR resources team. Plan G New employees Campus Recruitment: Designed to help campus Campus Recruitment: As of from university recruitment candidates with cultural integration December 2023, we hosted graduates, and positional commitment (between 0-0.5 years); a s p e c i a l t r a i n i n g c a m p public business competence and independent contribution called the “Huangpu Training recruitment (between 0.5-1.5 years); and attainment of upper-level Camp,” including 14 special competencies (between 1.5-2.5 years). courses with over 80 campus recruitment candidates from Huangpu Training Camp: includes engineering product the class of 2023. Additionally, philosophy , cultural exchange, team building and other 10 sessions of the General specialized courses. Force Specialized Lecture have General Force Specialised Lecture: includes structured been conducted, reaching thinking, time management, cross-departmental more than 1 ,0 0 0 campus communication, and other specialized training content. recruitment candidates from Social Recruitment: training for new social recruitment the class of 2022. employees aims to help with their integration and So cial recruitment : As of competency development. This program focuses on the December 2023, a total of 10 four connections of people and organization, people and “fast-track onboarding training products, people and business, and people and people. camps” had been conducted, Fast-track onboarding training camps: covering c ove r i n g a b o ut 9 0 0 n e w corporate vision and culture, brand awareness, product employees. experience and other topics. Note: 10. OMO model: Online-Merge-Offline business model, an industry platform-based business model. ENVIRONMENTAL SOCIAL GOVERNANCE CREATING VALUE AND CONTRIBUTING TO UNIFIED DEVELOPMENT 65
XPENG Class Online Training Platform 13,368people 207,204hours XPENG In 2023, a total of 13,368 Company employees a total of 207,204 hours of training, and a per capita training time In 2023, XPENG completed the infrastructure and content received training, with a training coverage rate of 98.6% of 15.5 hours. 01 construction of its knowledge platform connecting the Company and each sub-center. Through the sharing of Feishu knowledge platform knowledge and work experience, XPENG effectively solved pain points such as “inadequate integration mechanisms and deficiencies in training processes ,” “lack of easy access to knowledge base or training information” and “lack Employee Training Unit 2021 2022 2023 of systematic sharing mechanisms.” As of December 2023, we built a total of 25 knowledge Percentage of employees receiving training11 % 72.5 74.5 98.6 bases on the “Feishu Knowledge Platform,” accumulating more than 32,000 documents, of which more than 1,100 were held by the OPC13, covering 99.9% of employees, with more than 400 readings per capita. Percentage of employee training by gender Unit 2021 2022 2023 Male employees % 81.4 82.0 87.2 We have built an online learning platform called “XPENG 02 Class”, which provides knowledge learning, examination Female employees % 18.6 18.0 12.8 arrangements and online training services for employees in XPENG Class online learning platform the marketing and manufacturing departments. By the end of 2023, 80% of employees logged in to study on “XPENG Class” with per capita study time reaching 4.37 hours. Percentage of employee training by employment level Unit 2021 2022 2023 Senior management % 0.2 0.2 0.3 Middle management % 11.6 5.8 6.7 General staff % 88.2 94.0 93.0 Average number of training hours by gender12 Unit 2021 2022 2023 Average number of employee training hours Hours 21.5 16.4 15.5 Male employees Hours 19.9 16.7 15.9 Female employees Hours 22.3 15.1 15.1 Average training hours by employment level Unit 2021 2022 2023 Senior management Hours 17.8 24.0 13.3 Middle management Hours 32.8 6.6 2.6 General staff Hours 32.0 17.3 15.4 Note11. The formula for calculating the percentage of employees receiving training is: Total number of employees receiving training / total number of employees * 100%. 12. The formula for calculating the average number of training hours for a category of employees is: total number of hours trained for that category of employees / total number of employees in that category, the same below. Note13. The OPC: One Point Course, a single-point course, is an educational approach to carry out on-site training without leaving work. ENVIRONMENTAL SOCIAL GOVERNANCE CREATING VALUE AND CONTRIBUTING TO UNIFIED DEVELOPMENT 66
4.1.3 Work Safety XPENG prioritizes employee safety and adheres to a “safe development” philosophy. It strictly abides by the Law of the People’s ISO 45001 Republic of China on Work Safety and other laws and regulations, and has established a comprehensive safety management system covering all of the Company’s business units, providing strong support for daily safety supervision, and actively creating a safe In 2023, our XPENG headquarters, Zhaoqing base, Guangzhou base and Xiaopeng Automobile Sales Co., Ltd. have all workplace environment. obtained certifications. XPENG Safety Management System The Company has established a three-level safety management structure with clear responsibilities, setting up the Safety Production Committee and the Safety Management Department, and we actively implement our safety production responsibility system. We set key safety performance indicators, including the number of major safety accidents, general accident rate, rectification rate of category A hidden dangers, and training rates for new employees. To meet our occupational health and safety goals, we require the President of the Company to sign the Statement on Occupational Health and Safety Goals along with the person in charge of key safety departments. We also implement a system that links occupational safety performance indicators to the President’s individual performance. For key safety departments that fail to meet performance targets, we require them to reflect and propose improvement plans and with detailed relevant reports. At the same time, the Corporate Process Planning Department and the Company’s safety management office have developed the “Hulk Feedback Platform” and created links for safety-related vocabulary to facilitate employee feedback on production safety issues. In addition, in accordance with the requirements of ISO 45001 and relevant safety and environmental protection regulations, we have reviewed and improved the Company’s system and procedural documents, revised and issued seven procedural documents, including the “Measures for the Administration of Work Safety V2,” “Measures for the Administration of Work Safety Responsibility System V3” and “System for Work Safety Reward and Punishment V3.” Main Duties ChairmanResponsible for overall safety management. Safety Steering Committee MemberResponsible for the allocation and regular assessment of safety President of the Company | Chairman target indicators Heads of departments | Members Main Duties Safety Management Office Responsible for the office functions of the Safety Steering Committee, requiring responsible persons at different levels to General Manager of Quality and Safety Management Center Deputy General Manager of Quality and Safety Management Center conduct monthly and weekly team safety inspections. Director of Quality System Department Main Duties Implement the safety management of the Company and carry out independent safety management Business Departments within the department. Dedicated or non-dedicated safety management divisions and personnel ENVIRONMENTAL SOCIAL GOVERNANCE CREATING VALUE AND CONTRIBUTING TO UNIFIED DEVELOPMENT 67
Stakeholder Safety Management The Company implements the Stakeholder Safety and Environment Management Policy and requires suppliers to sign the Stakeholder Safety and Environment Agreement, clarifying the responsibilities and requirements of occupational safety and environmental protection for both sides. The supplier signing rate reached 100%. In 2023, there were no major occupational safety accidents within the scope of XPENG’s operation. Indicator 2021 2022 2023 Lost-time injury frequency rate14 (per one million hours worked) 0.143 0.505 0.701 Data coverage (%) 100 100 100 Safety management goals and results Number of level 2 and above accidents (cases)15 2023 Target 0 2023 Result 0 2024 Target 0 Proportion of level 3 accidents (%)16 2023 Target 0.08 2023 Result 0.019 2024 Target 0.07 Number of occupational disease cases (cases) 2023 Target 0 2023 Result 0 2024 Target 0 Note14. Lost-time injury frequency rate= Number of accidents involving loss of working days / Total working hours during the Reporting Period x 1,000,000. 15. Level 2 accidents refer to serious injury accidents, major fire accidents, major traffic accidents and occupational disease accidents; level 1 accidents refer to fatal accidents, serious fire accidents and serious traffic accidents. 16. Level 3 accidents refer to minor injury accidents, general fire accidents and general traffic accidents. ENVIRONMENTAL SOCIAL GOVERNANCE CREATING VALUE AND CONTRIBUTING TO UNIFIED DEVELOPMENT 68
Risk Prevention Safety Training We have developed a comprehensive risk management and control mechanism to prevent and defuse major safety risks from the source through In order to improve the safety awareness of all employees, XPENG actively carries out various occupational health and safety training in various forms, conducting safety performance evaluation, constructing a dual safety system, strengthening hazard prevention and performing regular risk investigation. including three-level safety education, general training in safety and occupational health, and targeted improvement training for professional personnel. During the Reporting Period, XPENG conducted various occupational health and safety trainings for all employees. XPENG 281,025hours 100% In 2023, we conducted the semi-annual safety management audit, 01 internal audit of safety management system, system empowerment Total hours of safety training for all employees The number of employees receiving health and System audit inspection for key departments and external audit of the safety safety training coverage rate management system, and took actions on the identified risks one by one. In 2023, we conducted an internal audit of occupational safety and 02 identified 379 audit issues, with a rectification rate of 100%. Internal safety audit In 2023, we piloted a new safety performance evaluation system 03 and conducted departmental safety performance assessments Safety inspection during the middle of the year and at the end of the year, meeting Types of Training Content of Training our standards for our safety ability index. Reviewed the content of the EHS system and provided 2 on-site counsel sessions for internal auditors to Training on internal safety audit improve the audit effectiveness of internal auditors, with 102 total participants. In 2023, we newly incorporated Guangzhou Zhipeng Manufacturing 04 Co., Ltd. in accordance with the ISO 45001 and ISO 14001 Construction of dual safety system regulations, and expanded the test sectors. We conducted five Conducted emergency drills for factory employees, with inspections of new areas, of which 65 non-conformity items were emphasis on the updated emergency plan to enhance Emergency drill found, and resolved eight “three simultaneous safety matters”. employee preparedness in emergency situations, with 12,891 total participants. Held 10 training sessions on laws and regulations, electrical equipment , fire protection equipment In 2023, we organized hazard identification and risk assessment in Professional training and other safety equipment for safety management 05 accordance with the Hazard Source Identification and Evaluation personnel, covering a total of 300 participants. Hazard Prevention Management System of Guangzhou Xiaopeng Motors Technology Co., Ltd., and formulated relevant control measures. A total of 4,570 Conducted large-scale theme activities such as hazard sources were identified. Safety training activities safety month and fire-fighting month, covering 90% of personnel in key departments. Conducted 880 training sessions in various forms, c ove r i n g t h re e—l eve l s a fet y e d u c at i o n fo r n e w In 2023, the Company carried out various forms of risk investigation Safety empowerment employees, safety and occupational health general 06 activities, conducted daily/special safety checks on the operation training, safet y accident case training and other scope of the Company, and identified a total of 24,582 hidden Risk Identification courses, with 404,022 total participants. dangers, with a rectification rate of 100%. ENVIRONMENTAL SOCIAL GOVERNANCE CREATING VALUE AND CONTRIBUTING TO UNIFIED DEVELOPMENT 69
4.1.4 Care for Employees’ Body and Mental Health XPENG values employees’ physical and mental health, work balance and work experience. In 2023, a total of about 200 employees received free emotional consulting services through XPENG’s Employee Assistance Program (EAP), including counseling services, sharing of health knowledge, offline lectures, micro-classes, experience days, etc., to help employees stay in-tune with their physical and mental health, and “work efficiently and live healthily” with the Company. XPENG Case Study: “525 I Love Myself” Health Day In 2023, XPENG launched its third “525 I Love Myself” Health Day to alleviate work stress. Apart from on-site activities such as Traditional Chinese Medicine consultation, fitness actives, tabletop games, table football and an employee gratitude wall, employees engaged in fun online activities to share psychological knowledge and participate in health-led Q&A activities. Case Study: “XPENG Appreciation Day” “Sharing common ambition and success” is an important part of XPENG’s culture. In November, during the XPENG Appreciation Day, we carried out a special activity to encourage every employee to show their gratitude. We express our sincere gratitude to the collaborative team and employees, and continue to support our employees through mutual encouragement and common progress. Case Study: XPENG Women’s Day “Wonder in Bloom” Event In March, XPENG launched a theme event for the XPENG Women’s Day for the Company’s female employees, covering activities such as “Meeting the new me” female growth psychology salon, “ideal me” activity, “Blooming charm” flower handicraft activities and “Care for women’s mental health – staying away from depression” public welfare live lectures and other activities dedicated to supporting our female employees, acknowledging their psychological needs and offering an environment conducive to fostering inner tranquility. ENVIRONMENTAL SOCIAL GOVERNANCE CREATING VALUE AND CONTRIBUTING TO UNIFIED DEVELOPMENT 70
[Feature story] Building a Sustainable Supply 2 Supply Chain Management Chain Together Supplier management is a vital part of business operations, and XPENG has always adhered to high-quality standards of its supply chain. For the sake of sustainable supply chain management, we adopt a full-lifecycle approach to managing suppliers across supplier admission, audit, XPENG has a solid sustainable supply chain life cycle management system and promotes suppliers’ sustainable development through risk management and ESG assessment. training and education. XPENG We require all suppliers to strictly comply with the provisions of 01 safeguarding occupational health and safety, eliminating and 1 Procurement Compliance preventing child labor, ensuring environmental compliance, and Supplier admission improving product quality and safety. We also require suppliers to obtain third-party certification under IATF 16949, ISO 9001, environmental management systems and production safety XPENG adheres to the principles of transparent, honest, legal and healthy procurement when establishing cooperation with suppliers. We standardization, or equivalent certification. In addition, we conduct on-site evaluations of newly admitted potential suppliers. We review have zero tolerance for suppliers’ behavior that are against business ethics. To ensure the transparency and fairness of cooperation, we their supply continuity, quality level, and other relevant circumstances require all suppliers to sign the Integrity Commitment Letter and the Confidentiality Agreement at the beginning of cooperation, clarifying the and implement the corresponding rating criteria according to the product categories provided by the suppliers. At the same time, we obligations and responsibilities of both parties in areas including anti-corruption, intellectual property protection and trade secrets. give priority to the selection of suppliers with leading market positions in the domestic and international passenger vehicle industry to ensure We have formulated the Blacklist System to clarify our bottom-line for supply chain cooperation. For illegal acts such as human rights suppliers’ performance quality. violations, child labor and forced labor, we will take serious actions and blacklist suppliers in response, in order to uphold high standards of our supply chain and maintain ethical and legal frameworks for business cooperation. In accordance with the Supplier Performance Management guidelines, 02 the Group reviews and evaluates suppliers in three categories: procurement terms, quality and delivery. This is applicable to all Supplier audit suppliers, and we classify suppliers at different levels according to the review results. Additionally, we have formulated the Strategic Supplier Management Measures to identify and manage core suppliers. Suppliers who fail to comply with ISO 14001/ISO 45001/ISO 27001 systems or appear to have abnormal operations are subject to regular assessments in accordance with our Parts Supply Performance Management Measures. We have established a five-level early warning mechanism for supplier 03 reserves and regularly conduct inspections and audits across supplier systems, operating processes and products, as well as unannounced Supplier risk management inspections to ensure that suppliers manage their own ESG risks and reduce supplier performance risks. In 2023, we identified a total of 11 suppliers as having high social or environmental risks and required them to rectify relevant issues promptly. XPENG attaches great importance to the performance of suppliers in 04 terms of environmental, social, and governance. We also understand that the ESG risks of suppliers are directly related to the safety and Supplier ESG assessment stability of the Company’s supply chain. Therefore, we actively perform ESG performance assessments of suppliers and continuously monitor various supplier aspects, such as operation compliance, business ethics, potential infringement, product quality, production safety and environmental management. Within these aspects, we consider various comprehensive indicators to evaluate suppliers’ business ethics, including requirements regarding gifts and hospitality, conflict of interest, operating integrity of business partners, fair competition and anti-monopoly measures. ENVIRONMENTAL SOCIAL GOVERNANCE CREATING VALUE AND CONTRIBUTING TO UNIFIED DEVELOPMENT 71
Supplier Assessments Unit 2023 Total number of suppliers and contractors that conduct human rights assessments of suppliers or contractors Number 2 Supplier region Number of suppliers Number of suppliers evaluated by filling questionnaire or on-site Number 836 by region in 2023 South China 354 Number of Tier-1 suppliers evaluated by filling questionnaire or on-site Number 355 Number of suppliers having significant actual/potential negative impacts East China 291 Number 11 identified through the assessment North China 42—Of which: number of suppliers implementing improvement plans Number 11 Total suppliers Central China 95—Of which: number of unqualified suppliers terminated Number 0 838 Northeast China 15 Number of suppliers receiving technical or document support from XPENG Number 11 Southwest China 24 among suppliers implementing improvement plans Northwest China 1 Hong Kong, Macao, 16 Taiwan and overseas XPENG Total number of suppliers that have signed the Integrity Commitment Letter and 838 Confidentiality Agreement Tier 1 Suppliers Critical non-tier 1 suppliers Number of suppliers assessed for sustainability Number of suppliers assessed for sustainability risks in the last three years : 838 risks in the last three years : 47 Percentage of suppliers in that category Percentage of suppliers in that category assessed in the last 3 years : 100% assessed in the last 3 years : 100% Targets to CompleteIn 2024, the Company Targets to CompleteIn 2024, the Company targets to complete sustainability risk audits targets to complete sustainability risk audits for 100% of 838 tier-1 suppliers for 100% of 47 critical non-tier-1 suppliers ENVIRONMENTAL SOCIAL GOVERNANCE CREATING VALUE AND CONTRIBUTING TO UNIFIED DEVELOPMENT 72
3 Supplier Enhancement Supplier Training We are committed to improving the overall quality of our suppliers. We provide targeted assistance programs to suppliers with significant issues, sending professional technicians to provide guidance and financial support and organize relevant assistance activities. We also hold annual QC activities to We work closely with our supply chain partners to build mutually beneficial relationships and actively cultivate and enhance the sustainability promote experience sharing and learning among suppliers. At the same time, we conduct regular periodic, monthly, quarterly and semi-annual assessments of our suppliers. We are committed not only to improving the quality of products and services but also to mutual growth and innovation. In our of all suppliers, motivating them to improve based on assessment results and by actively providing them with relevant support measures to jointly elevate pursuit of excellence, we help suppliers upgrade their business ethics, sustainable development and quality to jointly create leading industry the quality of the overall supply chain. practices, laying a solid foundation for the future. Through activities such as the Global Partners Conference, market launches of new models and routine communications, we provide suppliers with training and education on product demand, risk prevention, product quality and anti-corruption, among others. In 2023, our supplier training undertakings covered a total of 648 suppliers, including a total of 80 supplier-related anti-corruption training activities involving 302 suppliers and a total of 1,836 participants. Supplier Training 2023 Total number of suppliers trained 648 Number of tier-1 suppliers trained 252 Number of tier-2 suppliers trained 188 Number of common suppliers trained 208 Number of suppliers trained in anti-corruption 302 Number of suppliers that signed the Code of Business Ethics 838 XPENG Improving Suppliers’ Sustainability We have integrated ESG concepts into our supply chain management strategy and established two key performance indicators, covering the scope and engagement of supplier training and the range and participation of supplier audits. By monitoring and inspiring our suppliers, we promote them to improve their sustainability performance. [Highlight] In 2023, XPENG signed a strategic cooperation agreement with Siemens Ltd., China. Through this cooperation, XPENG will achieve a low-carbon life cycle of its plant and a transparent carbon emissions path covering five aspects: strategic planning, operational management, technological transformation, green supply chain and green finance. ENVIRONMENTAL SOCIAL GOVERNANCE CREATING VALUE AND CONTRIBUTING TO UNIFIED DEVELOPMENT 73
4.2 Contribution to the Society Research And Development Of Public Welfare Products To undertake our social responsibilities with a professional and systematic approach, XPENG established the XPENG Public Welfare In 2023, XPENG successively launched two original eco-educational tabletop games for children, Elephant Return Home and Little Birds Pick, which teach Foundation in 2021. Initiatives under this Foundation are designed to drive investment in the community and provide ecological children about biodiversity and the harmonious interests of humans and nature through accessible gameplay. Elephant Return Home, XPENG Public Welfare environment education and environmental protection, all of which we regard as core aspects of our social fulfillment obligation. Foundation’s first child ecological tabletop game, won the Silver Award of the First National Nature Education Cultural and Creative Product Design Competition. As of December 31, 2023, XPENG and its affiliates have donated more than 12.8 million CNY to the XPENG Public Welfare Foundation. As of December 31, 2023, XPENG provided products, courses and funding support to 63 different types of public welfare groups. We have conducted Donations have primarily been used for public welfare undertakings such as youth environmental education, biodiversity conservation, more than 1,300 environmental education activities in 144 kindergartens, primary and secondary schools and 107 communities in 23 provinces in China, youth voluntary services and community development, contributing to promoting social well-being and sustainable social and benefiting over 23,000 teenagers and children. environmental development. XPENG 4.2.1 Environmental Education The First National Natural Education Cultural and Creative XPENG Public Welfare Foundation’s original tabletop Product Design Competition Silver Award game in schools The mission of XPENG Public Welfare Foundation is to effectively spread ecological environment knowledge on climate change, biodiversity and green energy, popularizing and elevating sustainable lifestyles. XPENG Public Welfare Foundation also emphasizes partnering with schools, other public welfare organizations and volunteers to jointly promote the high-quality development of ecological environment education. Promoting Cross-field Activities XPENG attaches great importance to the development of environmental education and public utilities. We continue to promote cross-field cooperation with education, research, media and other parties through the establishment of funding platforms and planning of publicity activities. [Highlight] Since 2022, XPENG has successively set up the XPENG Green Home Special Funds” under Guangdong Youth Development Foundation, South China University of Technology Education Development Foundation, Chengdu Luhu Community Development Foundation and Sichuan Youth Development Foundation to provide XPENG Green Home Environmental Education Program is special funds for high-quality environmental education activities. XPENG Public Welfare Foundation’s flagship public welfare project. Its mission is to spread knowledge on climate change, energy transformation and biodiversity through the research Case Study: “60 Ecological Children’s Books” and development of environmental education products, youth Book List empowerment initiatives and public environmental education On World Earth Day and World Reading Day, Guangzhou XPENG activities. As of December 31, 2023, the XPENG Green Home Public Welfare Foundation and Shenzhen iRead Foundation joined Environmental Education Program had provided funds, public hands with more than 10 public welfare partners to release a book list welfare products, training and other support to 84 public of “60 Ecological Children’s Books.” The book list encourages families, welfare organizations, and was awarded as “2023 Responsibility schools and social organizations to improve their knowledge of literacy Case” by Southern Weekly. and actions associated with ecology and the environment through reading, spreading the concept of environmentally friendly lifestyles. ENVIRONMENTAL SOCIAL GOVERNANCE CREATING VALUE AND CONTRIBUTING TO UNIFIED DEVELOPMENT 74
Promoting Environmental Protection Volunteering The XPENG Volunteer Service Team, established by the XPENG Public Welfare Foundation on March 5, 2022, provides voluntary services in areas such as Case Study: Million km smart-driving journey on XPENG G6, protecting “XPENG Car environmental education, low-carbon lifestyle promotion and biodiversity conservation. As of December 31, 2023, we had more than 630 registered volunteers Owners’ Rainforest” with a cumulative service time exceeding 15,000 hours. In 2023, XPENG launched a million-kilometer smart-driving event for XPENG G6 users, during which users’ mileage was recorded using the XNGP The first phase of the “XPENG Green Home Youth Trip,” an environmental education activity hosted by the XPENG Public Welfare Foundation and organized function. For every 100,000 kilometers, XPENG and XPENG Public Welfare Foundation would donate funds to protect 2 acres of rainforest in by the XPENG Volunteer Service Team, commenced in May 2022 and ended in October 2023. The Trip included a total of 51 activities and served more than Xishuangbanna, with an upper limit of 120 acres. 3,245 participants. In December 2023, the second phase of “XPENG Green Home Youth Trip” was launched, featuring an “Energy and Travel” theme. The activity On December 24, 2023, 7,830 XPENG G6 owners contributed a total of 10,140,000 km of driving mileage. XPENG and XPENG Public Welfare recruited employees, car owners and other volunteers to carry out environmental education activities such as popularizing the science behind new energy Foundation donated 680,000 CNY to the Xishuangbanna Rainforest Protection Foundation for the protection of its tropical rainforests. In line with vehicles, advocacy for low-carbon travel and publicity for biodiversity protection in the coming year. building an environmentally friendly lifestyle, XPENG helps more people understand the importance of rainforests through environmental education, Volunteers are also encouraged to independently identify and respond to social needs. In March 2023, XPENG Public Welfare Foundation held the first encouraging participation in environmental protection. phase of the “Youth UP Innovation Camp” to support 22 volunteers in creating environmental education plans for different premises such as factories, communities and enterprises. “Youth UPC Innovation Camp” learning activities for smart First phase of the “Green Home Youth Tour” voluntary green manufacturing service activity XPENG Integrating Charitable Concepts Into Business Operations In addition to actively carrying out environmental volunteer activities, XPENG Public Welfare Foundation explores cross-field cooperation with other business departments, further encouraging employees and car owners to implement green and low-carbon practices in their daily work and life. In April 2023, XPENG Public Welfare Foundation held a series of parent-child environmental education activities on six major XPENG sales platforms in Guangzhou, Shenzhen, Beijing, Hunan and Hubei region, Sichuan and Southwest China, and Jiangsu and Anhui region. The activities covered topics such as biodiversity conservation, climate change and low-carbon lifestyles, and promoting environmental awareness through small classes, handcraft workshops and reading clubs. Parent-child reading club Low-carbon lifestyle-themed environmental education ENVIRONMENTAL SOCIAL GOVERNANCE CREATING VALUE AND CONTRIBUTING TO UNIFIED DEVELOPMENT 75
4.2.1 Community Building Supporting Underprivileged Communities With a continued focus on rural children’s education, XPENG Public Welfare Foundation joined hands with volunteers and social organizations to conduct 800 community education activities in rural schools. We covered topics such as climate change, energy reform and biodiversity. XPENG Public Welfare Foundation has also formulated a guideline for donating supplies and called on business departments of XPENG to donate supplies such as food, clothing and stationery to help social groups in need in urban XPENG and rural communities. From December 31, 2022 to January 14, 2023, XPENG invited around 01 116 car owners to XPENG Car Owners Family Dinners in Guangzhou, Chongqing, Shanghai and Beijing and donated a total of 30,646 CNY of ticket sales and other related incomes to Guangzhou XPENG Public Welfare Foundation for carrying out public welfare activities such as children’s environmental education. In Jan-Mar 2023, XPENG donated 102 food items and 24 pillows to 02 community workers and vulnerable groups through the XPENG Public Welfare Foundation. In May 2023, led by Guangzhou Social Organization Administration 03 Bureau, the Guangzhou XPENG Public Welfare Foundation donated 40,000 CNY to the People’s Government of Sanpai Town, Qingyuan, to provide more books for the teachers and students of Nangang Central School. In August 2023, a flood disaster broke out in Beijing for multiple days. 04 XPENG directed personnel to the affected area, distributed supplies to local volunteers, assisted in transporting trapped people and supported rescue work in the stricken area. In December 2023, XPENG donated a total of 1,997 items of clothing 05 through the XPENG Public Welfare Foundation to support the Guangzhou Community Homeless Relief Service. Environmental education projects in rural schools “Best Charity Partner in Community Rescue Services” Award ENVIRONMENTAL SOCIAL GOVERNANCE CREATING VALUE AND CONTRIBUTING TO UNIFIED DEVELOPMENT 76
>< 05 Appendix E X P LO R E R O F F U T U R E M O B I L I T Y ENVIRONMENTAL SOCIAL GOVERNANCE APPENDIX 77
5.1 Key Performance Indicators Economic Performance Indicators Key indicators Unit 2021 2022 2023 Key indicators Unit 2021 2022 2023 Total revenues CNY (million) 20,988.1 26,855.1 30,676.1 Total GHG emissions19 Tonne of CO2 42,484 106,420 162,742 20 Tonne of CO2 /CNY Gross margin % 12.5 11.5 1.5 GHG emission density (thousand) 0.002 0.004 0.005 Total deliveries of vehicles Unit 98,155 120,757 141,601 GHG emissions (scope 1) 21 Tonne of CO2 5,892 18,024 27,043 Added authorized patents Item 428 694 727 GHG emissions (scope 2) 22 Tonne of CO2 32,723 83,654 130,208 GHG emissions (scope 3) 23 Tonne of CO2 3,869 4,742 5,491 Scope3-Category1 Purchased Tonne of CO2 / / 1,288 goods and services Scope3-Category6 Employee Tonne of CO2 3,869 4,742 4,203 commuting Environmental Performance Indicators17 Total waste generated 24 Tonne 13,066 25,958 9,896 Key indicators Unit 2021 2022 2023 Hazardous waste generated Tonne 1,071 1,528 1,051 Nitrogen oxide emissions18 Tonne 2.4 2.3 3.8 Hazardous waste intensity Tonne/CNY (thousand) 5.1×10 5 5.7×10 5 3.4×10 5 Non-hazardous waste Sulfur dioxide emissions Tonne 0.5 0.4 0.4 generated Tonne 11,995 24,430 8,845 Non-hazardous waste Particulate matter emissions Tonne 1.3 2.0 15.0 Tonne/CNY (thousand) 0.0006 0.0009 0.0003 intensity General industrial solid VOCs in exhaust gas Tonne 7.2 14.1 7.8 Tonne 11,409 22,457 7,845 waste generated Total discharge of industrial Domestic waste generated Tonne 116,190 167,191 175,454 Tonne 586 1,973 1,000 wastewater in office areas COD in industrial wastewater Tonne 2.3 3.3 5.6 Total energy consumption 25 MWh 88,717 132,325 217,247 Total cost of energy BOD in industrial wastewater Tonne 0.6 0.8 2.0 CNY (million) 50 86 153 consumption Nitrogen ammonia in industrial E n e r g y c o n s u m p t i o n Tonne 0.1 0.2 0.9 intensity MWh/ CNY (thousand) 0.004 0.005 0.007 wastewater Total nitrogen in industrial Direct energy consumption wastewater Tonne 1.0 1.6 2.8 MWh 32,395 58,963 59,832 ENVIRONMENTAL SOCIAL GOVERNANCE APPENDIX 78
Key indicators Unit 2021 2022 2023 Key indicators Unit 2021 2022 2023 Gasoline consumption MWh De minimis 15.4 De minimis Employee structure 79.0 80.4 80.4 Diesel consumption MWh De minimis 55.1 43.5 Male % (11,036 persons) (12,721 persons) (10,892 persons) Percentage of 20.2 19.4 18.1 LNG consumption MWh 29,490 45,340 35,792 employees by gender Female % (2,457 persons) (2,822 persons) (3,073 persons) Photovoltaic power 0.8 0.2 1.5 consumption MWh 2,905 13,552 23,996 Undisclosed29 % (120 persons) (35 persons) (201 persons) Senior 0.2 0.1 0.1 Indirect energy consumption MWh 56,322 73,362 157,415 management % (18 persons) (24 persons) (23 persons) Percentage of Middle 10.2 9.0 9.5 Power consumption MWh 56,322 73,362 157,415 employees by position management % (1,425 persons) (1,426 persons) (1,285 persons) Primary-level 89.6 90.9 90.4 Total water consumption m³ 424,275 987,330 807,952 employees % (12,529 persons) (14,380 persons) (12,247 persons) Total water consumption Under 30 45.7 46.6 39.9 intensity m³/CNY 0.02 0.04 0.03 years old % (6,389 persons) (7,380 persons) (5,401 persons) Municipal water 30-49 52.1 51.3 58.0 consumption m³ 271,150 834,264 633,841 years old % (8,123 persons) (7,861 persons) Percentage of (7,278 persons) employees by age 0.2 0.2 Above 49 0.3 Recycled water consumption m³ 153,125 153,066 174,111 years old % (38 persons) (31 persons) (39 persons) Package material 1.9 1.8 1.9 consumption for whole Tonne 26 62 74026 Undisclosed30 % (288 persons) (257 persons) (272 persons) vehicle manufacturing 97.9 97.8 98.5 Chinese mainland % (15,593 persons) (13,258 persons) Packaging material intensity Tonne/CNY (thousand) 1.2×10 6 2.3×10 6 2.4×10 5 (13,676 persons) Percentage of Hong Kong, Macao, 0.1 0.2 0.2 and Taiwan % (33 persons) (29 persons) employees by region (7 persons) 2.1 1.3 1.9 Other regions % (203 persons) (263 persons) (295 persons) Social Performance Indicators Employee turnover rate Total employee % 17.5 27.7 31.2 turnover rate Key indicators Unit 2021 2022 2023 Male % 17.2 26.8 30.8 Employee turnover Total number of employees rate by gender31 Person 13,978 15,829 13,550 Female % 18.9 31.0 33.4 (full-time) 27 Number of part-time / Under 30 internship employees28 Person 1,166 802 817 years old % 19.2 30.1 36.8 Employee turnover 3 0—4 9 New employees Person 8,894 7,910 3,795 rate by age32 years old % 16.2 25.2 26.8 Number of employees with Above 49 Person 50 114 185 years old % 11.4 17.4 39.2 disabilities ENVIRONMENTAL SOCIAL GOVERNANCE APPENDIX 79
Governance Performance Indicators Key indicators Unit 2021 2022 2023 Key indicators Unit 2021 2022 2023 Employee turnover rate Chinese mainland % 17.7 27.6 31.2 Number of Board Directors Person 9 8 734 by region Hong Kong, Macao, and Taiwan % 0 25.0 31.0 Number of female Board Directors Person 1 1 234 Pe rce ntag e of employees trained % 72.5 74.5 98.6 Number of Board meetings Time 8 5 7 Employee training Number of anti-corruption Average training hours Hour 21.5 16.4 15.5 training sessions Time 34 65 92 Number of anti-corruption Male % 81.4 82.0 87.2 training hours Hour / 5,739 15,880 Percentage of employees trained by gender Female % 18.6 18.0 12.8 Number of anti-corruption training participants Person-time / 11,477 16,760 Number of risk management Senior management % 0.2 0.2 0.3 training sessions Time 7 150 80 Percentage of employees trained by employee Middle management % 11.6 5.8 6.7 category Primary-level employees % 88.2 94.0 93.0 Male Hour 19.9 16.7 15.9 Average training hours completed by gender Female Hour 22.3 15.1 15.1 Senior management Hour 17.8 24.0 13.3 Average training hours completed by employee Middle management Hour 32.8 6.6 2.6 category Primary-level employees Hour 32.0 17.3 15.4 Number of safety Case 0 0 0 accidents Work-induced fatalities Person 0 0 0 Proportion of accidents Occupational health involving loss of working % 0.143 0.505 0.701 and safety of employees hours (per 1 million working hours) Total number of lost days Day 371 399 1,04333 due to work injuries Total hours of safety training for employees Hour 287,414 212,131 281,025 ENVIRONMENTAL SOCIAL GOVERNANCE APPENDIX 80
5.2 Key Performance Indicators Note A. Environmental 17. The environmental data collected for the purpose of this report covers the XPENG headquarters, Zhaoqing base, Guangzhou base and self-operated XPENG stores in several locations. Due to the commissioning of the Guangzhou base in 2023 and the increase in the number of self-operated shops, some of the Aspects, General Disclosures and KPIs Chapter emission generation and energy consumption have increased. 18. The emissions of nitrogen oxides, sulfur dioxides, and particulate matter are all derived from direct emissions during the plant’s manufacturing process. General Information on: 2.2. Green Production Aspect A1: Disclosure (a) the policies; and 19. Greenhouse gases include carbon dioxide, nitrous oxide, methane, sulphur hexafluoride, hydrofluorocarbons and perfluorocarbons, which are the six Emissions (b) compliance with relevant laws and regulations that have greenhouse gases listed in the Kyoto Protocol. a significant impact on the issuer relating to air and greenhouse gas emissions, discharges 20. In 2023, the scope of data collected improved, resulting in an increase in greenhouse gas emissions. into water and land, and generation of hazardous and non-hazardous waste 21. GHG emissions (Scope 1) are derived from direct GHG emissions of equipment within the operating locations. Emission factors are based on the Technical KPI A1.1 The types of emissions and respective emissions data. 2.2 Green Production Specification for the Accounting of Lifecycle Carbon Emissions of Passenger Vehicles, and Scope 1 emission statistics improved in 2023 to include three new categories of emission sources: refrigerant, fire extinguishers and wastewater treatment. 5.1. Key Performance Indicators 22. GHG emissions (Scope 2) are derived from the indirect emissions of purchased energy (electricity). The emission factor is selected from the national grid average emission factor. In 2023, the increase in the number of self-operated stores and commissioning of the Guangzhou Smart Manufacturing Innovation KPI A1.2 Direct (Scope 1) and energy indirect (Scope 2) greenhouse 5.1. Key Performance Center led to an increase in electricity consumption, which in turn led to an increase in Scope 2 emissions. gas emissions (in tons) and, where appropriate, intensity Indicators (e.g., per unit of production volume, per facility). 23. GHG emissions (scope 3) include Category 1—Purchased goods and services (new to the statistics) and Category 6—Employee commuting. Emission coefficients are derived from the China Products Carbon Footprint Factors Database and the Technical Specification for the Accounting of Lifecycle Carbon Emissions of Passenger Vehicles. KPI A1.3 Total hazardous waste produced (in tons) and, where 2.2. Green Production appropriate, intensity (e.g., per unit of production volume, per facility). 5.1. Key Performance 24. Hazardous waste is defined in accordance with the National Catalogue of Hazardous Wastes (2021 Edition) published by the Ministry of Ecology and Indicators Environment of the People’s Republic of China. In 2023, the Guangzhou production base achieved full recycling of industrial solid waste, such as industrial waste steel sheets and waste cardboard, and therefore, the amount of waste generated decreased. 25. Energy consumption is calculated with reference to the General Rules for the Calculation of Comprehensive Energy Consumption, and have restated data for 2022. KPI A1.4 Total non-hazardous waste produced (in tons) and, where 2.2. Green Production appropriate, intensity (e.g., per unit of production volume, per facility). 5.1. Key Performance Indicators 26. Adjustments to the pick-up strategy in 2023 to include supplier-delivered packages in the statistics and the commencement of production at the Guangzhou production base resulted in increased packaging materials consumption. 27. In this report, when calculating employee-related data such as percentage of employees by gender, percentage of employees by position, percentage of KPI A1.5 Description of emission target(s) set and steps taken to 2.1. Climate Governance achieve them. 2.2. Green Production employees by age, percentage of employees by region and employee turnover rate, we only use data from full-time employees. Data from part-time/internship employees are not included. 28. The total number of part-time employees in 2023 consists of interns. KPI A1.6 Description of how hazardous and non-hazardous wastes 2.2. Green Production are handled, and a description of reduction target(s) set 29. In the number of employees by gender data, the specific gender of 201 overseas employees (1.5%) was not identified in 2023 due to employee privacy and steps taken to achieve them. requirements in some overseas regions. Aspect A2: General Policies on the efficient use of resources, including energy, [Feature story] Green Products 30. In the data on the number of employees by age, in addition to the disclosed data, the age of 257 overseas employees (1.9%) was not identified in 2023. Use of Disclosure water and other raw materials. Leading Green Travel Resources 2.2. Green Production 31. In the data on employee turnover rate by gender, the Company no longer produces turnover statistics for employees who do not disclose their gender. KPI A2.1 Direct and/or indirect energy consumption by type (e.g., 2.2. Green Production 32. In the data on employee turnover rate by age, the Company no longer produces turnover statistics for employees who do not disclose their age. electricity, gas or oil) in total (kWh in ’000s) and intensity (e.g., per unit of production volume, per facility). 5.1. Key Performance Indicators 33. In 2023, the Company followed policy guidelines and adjusted the rest and pay period for employees injured at work. 34. Ms. Xiao Hu was appointed as a non-executive Director on November 15, 2023 and resigned as a non-executive Director on March 19, 2024. ENVIRONMENTAL SOCIAL GOVERNANCE APPENDIX 81
B. Social Aspects, General Disclosures and KPIs Chapter Aspects, General Disclosures and KPIs Chapter Aspect A2: KPI A2.2 Water consumption in total and intensity (e.g., per unit of 2.2. Green Production Employment and Labor Practices Use of production volume, per facility). Resources 5.1. Key Performance Indicators Aspect B1: General (a) the policies; and 4.1. Employee Health and Employment Disclosure (b) compliance with relevant laws and regulations that have Development KPI A2.3 Description of energy use efficiency target(s) set and steps [Feature story] Green Products a significant impact on the issuer taken to achieve them. Leading Green Travel relating to compensation and dismissal, recruitment and 2.2. Green Production promotion, working hours, rest periods, equal opportunity, diversity, anti- discrimination, and other benefits and welfare. KPI A2.4 Description of whether there is any issue in sourcing water 2.2. Green Production that is fit for purpose, water efficiency target(s) set and KPI B1.1 Total workforce by gender, employment type (for example, 4.1. Employee Health and steps taken to achieve them. full- or part-time), age group and geographical region. Development 5.1. Key Performance Indicators KPI A2.5 Total packaging material used for finished products (in tons) 5.1. Key Performance Indicators and, if applicable, with reference to per unit produced. KPI B1.2 Employee turnover rate by gender, age group and 4.1. Employee Health and geographical region. Development 5.1. Key Performance Indicators Aspect A3: General Policies on minimizing the issuer’s significant impact on the [Feature story] Green Products Environmental Disclosure environment and natural resources. Leading Green Travel Aspect B2: General (a) the policies; and 4.1. Employee Health and and Natural 2.2. Green Production Health and Disclosure (b) compliance with relevant laws and regulations that have Development a significant impact on the issuer Resources Safety relating to providing a safe working environment and KPI A3.1 Description of the significant impact of activities on the 2.2. Green Production protecting employees from occupational hazards. environment and natural resources and the actions taken to manage them. KPI B2.1 Number and rate of work-related fatalities occurred in each 4.1. Employee Health and of the past three years, including the reporting year. Development Aspect A4: General Policies on identification and mitigation of significant 2.1. Climate Governance KPI B2.2 Lost days due to work injury. 4.1. Employee Health and Climate Disclosure climate-related issues that have impacted and those that Change may impact the issuer. Development 5.1. Key Performance Indicators KPI A4.1 Description of the significant climate-related issues that 2.1. Climate Governance have impacted, and those which may impact the issuer, and KPI B2.3 Description of occupational health and safety measures 4.1. Employee Health and the actions taken to manage them. adopted and how they are implemented and monitored. Development Aspect B3: General Policies on improving employees’ knowledge and skills for 4.1. Employee Health and Development Disclosure discharging duties at work. Description of training activities. Development and Training KPI B3.1 The percentage of employees trained by gender and 4.1. Employee Health and employee category (e.g., senior management, middle Development management). 5 .1 . Key Pe r fo r m a n c e Indicators KPI B3.2 The average training hours completed per employee by 4.1. Employee Health and gender and employee category. Development 5 .1 . Key Pe r fo r m a n c e Indicators ENVIRONMENTAL SOCIAL GOVERNANCE APPENDIX 82
Aspects, General Disclosures and KPIs Chapter Aspects, General Disclosures and KPIs Chapter Aspect B6: KPI B6.3 Description of practices relating to observing and protecting [Feature story] Continuing Aspect General Information on: 4.1. Employee Health and Product intellectual property rights. to explore the boundaries B4: Labor Disclosure (a)the policies; and Development of the future (b)compliance with relevant laws and regulations that have a Responsibility Standards significant impact on the issuer relating to preventing child and forced labor KPI B6.4 Description of quality assurance process and recall 1.1. Quality Products procedures. KPI B4.1 Description of measures to review employment practices to 4.1. Employee Health and KPI B6.5 Description of consumer data protection and privacy 1.2. Quality Services avoid child and forced labor. Development policies and how they are implemented and monitored. Aspect General (a) the policies; and 3.1. Compliant Operations KPI B4.2 Description of steps taken to eliminate such practices when 4.1. Employee Health and (b) compliance with relevant laws and regulations that have discovered. Development B7: Anti- Disclosure 3.3 Business Ethics a significant impact on the issuer corruption relating to bribery, extortion, fraud and money laundering. Operating Practices KPI B7.1 Number of concluded legal cases regarding corrupt 3.3. Business Ethics practices brought against the issuer or its employees during Aspect B5: General Policies on managing environmental and social risks of the [Feature story] Building a the reporting period and the outcomes of the cases. Supply Chain Disclosure supply chain. Sustainable Supply Chain Together Management Description of preventive measures and whistle-blowing 3.3. Business Ethics KPI B7.2 KPI B5.1 Number of suppliers by geographical region. [Feature story] Building a procedures and how they are implemented and monitored. Sustainable Supply Chain Together KPI B7.3 Description of anti-corruption training provided to directors 3.3. Business Ethics KPI B5.2 Description of practices relating to engaging suppliers, [Feature story] Building a and staff. number of suppliers where the practices are being Sustainable Supply Chain implemented, and how they are implemented and monitored. Together Community KPI B5.3 Description of practices used to identify environmental [Feature story] Building a and social risks along the supply chain and how they are Sustainable Supply Chain Aspect B8: General Policies on community engagement to understand the 4.2. Contribution to the implemented and monitored. Together Community Disclosure needs of the communities where the issuer operates and to Society ensure its activities take into consideration the communities’ Investment interests. KPI B5.4 Description of practices used to promote environmentally [Feature story] Building a preferable products and services when selecting suppliers Sustainable Supply Chain KPI B8.1 Focus areas of contribution (e.g., education, environmental 4.2. Contribution to the and how they are implemented and monitored. Together concerns, labor needs, health, culture, sport). Society KPI B8.2 Resources contributed (e.g., money or time) to the focus 4.2. Contribution to the Aspect B6: General (a) the policies; and 1.1. Quality Products area. Society Product Disclosure (b) compliance with relevant laws and regulations that have Responsibility a significant impact on the issuer 1.2. Quality Services relating to health and safety, advertising, labeling and privacy matters relating to products and services provided and methods of redress. KPI B6.1 Percentage of total products sold or shipped subject to 1.1. Quality Products recalls for safety and health reasons. KPI B6.2 Number of products and service-related complaints 1.2. Quality Services received and how they are dealt with. ENVIRONMENTAL SOCIAL GOVERNANCE APPENDIX 83
5.3 Feedback Form Dear reader, Your comment about this report: (please tick in the box) Thank you for reading the XPeng Inc. 2023 Environmental, Social and Governance Report. We very much hope that you can give us your comments about this report and leave your valuable opinions to help us make continuous improvements to the report. Question Very good Good Average Poor Very poor XPENG Do you think this report has provided all the important information about the environmental, social and governance performance of XPENG Motors? Do you think the information and indicators disclosed in this report are clear, accurate and complete? Do you think the presentation and style of this report are easy to read? What other need-to-know information do you think has not been reflected in this report? Do you have any suggestions for our future environmental, social and governance reports? ENVIRONMENTAL SOCIAL GOVERNANCE APPENDIX 84
E X P LO R E R O F F U T U R E M O B I L I T Y XPeng Inc. 2023 ENVIRONMENTAL, SOCIAL AND GOVERNANCE REPORT