Xpeng launches P5 Sedan with starting price around $24.5K

Yahoo Finance’s Brian Sozzi and Julie Hyman speak with Xpeng Vice Chairman & President, Brian Gu, about the company’s P5 Sedan launch, outlook for flying cars, and the electric vehicle space overall.

Video Transcript

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BRIAN SOZZI: China-based electric vehicle maker, Xpeng, debuted its latest model today. The Xpeng P5 family smart sedan joins a growing roster of smart vehicles by Xpeng, as it looks to stake out its position in China's red-hot EV market.

Let's talk more about it with Brian Gu, Xpeng Vice Chairman and President. Brian, always good to see you. Thanks for coming on here this morning. Take us through the vehicle. What makes it a smart sedan?

BRIAN GU: Well, this is a truly, I would say, an innovation pact in the family sedan platform. First of all, it's very smart, because it has one of the most capable autonomous driving systems on board. It will be world's first production level vehicle to incorporate lighter technology in a sensor package.

They also will have equipped with our XPILOT 2.5 software, that has, you know, the NGP city driving scenario. NGP means Navigation Guided Pilot. So, that's also one of the most advanced in China at the moment, compared to other smart companies. So I got some IUB players.

And then thirdly is that it will have a cabin design that I really tried to design cool, smart features that really utilize its space to design interesting features for people to use inside the cabin. So, those are features that I think have not been seen before in other products.

JULIE HYMAN: Yeah, you and Brian were talking during the break about the fact that the front seats fold down. There's a fridge in the back. A lot of cool things that one is not necessarily used to seeing in a car. What kind of demand are you expecting for this?

I was looking at your numbers. Your year to date deliveries of your vehicles, nearly 46,000. How much do you think this sedan is going to boost your numbers and what kind of early demand indications are you getting?

BRIAN GU: Well, let me just give you a few data points. Obviously, we are not here to provide any guidance. First of all, this product is squarely targeted at one of the largest segments of the Chinese sedan market.

The price point is where I think probably one of the most popular price segment for these foreign brands. So, it will be compared to, for example, Toyota Camry, Honda Accord, Volkswagen, sedans as well. So, the price tag around 200,000 RMB is squarely at the largest family sedan segment.

Secondly is that upon the sort of announcement of this P5, we actually received early indications of pre-orders. The momentum of that is very strong. So, what I can say is that compared to the similar launch of P7, our flagship product last year, it's multiple fold increase, probably around three times fold of the pre-order indications that we received. So, we have actually very strong hope that this will become a large volume booster for us.

As we discussed in our quarterly earnings result a couple of weeks ago, we anticipate our fourth quarter, upon the launch official delivery of this P5, will hit monthly delivery peak around 15,000 per month. That would be more than doubling of our August monthly delivery numbers.

BRIAN SOZZI: Brian, also getting a lot of social media attention this morning on your plans around flying cars. What are your plans around flying cars? We've talked a little bit about this in the past. When do you expect to start delivering them?

BRIAN GU: Well, I think one of the things that Xpeng is focused on is trying to really think about the ecosystem of transportation, utilizing similar technologies in autonomous driving, sensor, motor, battery, et cetera. And flying car is actually one of the products that we are developing with one of our associate companies that we invested in to come up with that product.

This is a product that designed to be a vehicle, but has flying capabilities. And will be sold through our own network, through [INAUDIBLE] Xpeng stores. But that is still under development. So, we'll probably see this couple two to three years away for a product to be commercially delivered.

JULIE HYMAN: And Brian, I wanted to broaden it out and ask about, I love talking about all the cool products. But I do have to ask about some recent commentary from a Chinese official about the electric vehicle market there. The Minister for Industry and Information Technology, excuse me, talked about needing fewer electric vehicle companies in China, that they're small and scattered.

Now, presumably, he's not referring to a company like Xpeng, which is not a particularly small company in the landscape there. But I do wonder, are you having discussions with the Chinese government? Are you planning on making acquisitions related to the comments that we heard? How should we be thinking about those comments in relation to Xpeng?

BRIAN GU: Well, first of all, I think in the past five years or so, there are quite a number of EV companies startup that has built up capacities, but without a successful product. So, there's a lot of empty capacity needs to be consolidated. So, I think that's one of the reasons I think the government is trying to rationalize and optimize the capacity utilization of all these plants.

Clearly, we have been building our own plants. So, we're in the middle of constructing our second and third plant in Guangzhou and Wuhan. So, currently, we don't really have a capacity constraint, but I think in the long run, if there's more capacity need, I think government is encouraging the consolidation of utilizing existing capacity rather than building new ones. I think that's what the government's objective is.

Currently, we don't really have that need. But obviously, that will be one of the tools that we can use if we need much bigger capacity given our growth trajectory.

JULIE HYMAN: And Brian, just quickly, given the drop that we've seen generally in US-listed Chinese companies, is there any message you would want to deliver to investors to reassure them about the path for Xpeng?

BRIAN GU: Well, I think there's not much I can say about capital markets because that's totally not something we can influence and control. But what I can say is that the sector that we are in is experiencing tremendous secular growth. And I think as a leader of that sector, or one of the technology leader, I would say, not the volume leader at the moment, but I think we have every confidence that we'll be generating more than industry growth for the foreseeable future. And I think that will be exciting segment for investors to get exposure to.

BRIAN SOZZI: Brian Gu, Xpeng Vice Chairman and President. Always nice to see you. Congrats on the launch. We'll talk to you soon.

BRIAN GU: Thank you very much.