On December 21st, Red Star Capital Bureau reported that the first model G3/G3i of Xiaopeng Motors (09868. HK/XPEV. US) will be discontinued within the year, and some production lines will switch to producing Xiaopeng G6.
Xiaopeng Motors has confirmed the news of production suspension with Red Star Capital Bureau, "The G3/G3i will be discontinued within this year, based on our company's long-term planning decision to enable Xiaopeng to focus more on advancing its future development strategy. For the delivered series of models, we will strictly fulfill our commitment to the rights of car owners, provide 10-year maintenance and spare parts supply capabilities for sold vehicles, and continue to provide OTA software upgrade services for car owners in the future."
G3/G3i is the first model and its facelift launched by Xiaopeng Motors. It was officially launched in December 2018 and has been 5 years since then. It proves the mass production capacity of Xiaopeng Motors, which is of great significance. In 2019, as the only available model of Xiaopeng Motors, the G3 sold 16600 units. With the launch of more products, the sales of G3/G3i continue to decline, and its contribution to Xiaopeng Motors is becoming smaller and smaller.
Sales data shows that Xiaopeng Motors delivered 20041 new vehicles in November, a year-on-year increase of 245% and a month on month increase of 0.91%. Among them, Xiaopeng G6 delivered 8750 vehicles, accounting for 43%; Xiaopeng G9 delivered 5778 vehicles, accounting for 28.83%. The latest sales data of Xiaopeng G3/G3i is no longer publicly available. According to third-party platform data, the cumulative sales of Xiaopeng G3/G3i in the first 10 months of this year were 4878 units.
G3/G3i is even causing losses to Xiaopeng Motors. The financial report shows that in the second quarter of this year, due to inventory impairment and inventory procurement commitment losses of G3i, it had a negative impact on Xiaopeng Motors' automotive gross profit margin by 4.5 percentage points; In the third quarter of this year, inventory impairment related to G3i had a negative impact on the gross profit margin of automobiles by 2.9 percentage points.
Xiaopeng Motors made a provision of approximately 200 million yuan in its financial report for inventory impairment and procurement commitment losses related to G3i in the second quarter of this year; In the third quarter, Xiaopeng still made a provision of 230 million yuan for inventory impairment losses of G3i models.
Automotive analyst Liu Hao told Red Star Capital Bureau, "In the past, the product life cycle of traditional fuel vehicles was more than seven to eight years, and new energy vehicles were more like electronic consumer goods, with significantly faster updates and upgrades. A more successful product may only last for five years." Ideal ONE, the first model of Ideal Automobile, was officially launched in October 2018, and production was officially confirmed in September last year. It was officially discontinued in June this year, Its lifecycle is less than five years.
In April of this year, Xiaopeng Motors unveiled the Fuyao 2.0 architecture at the Shanghai Auto Show, launching platform based car manufacturing. It is reported that this architecture can be compatible with multiple research and development platforms, and can expand to multiple categories of vehicle models such as sedans, hatchbacks, sports coupes, recreational vehicles, SUVs, MPVs, pickup trucks, etc. Based on this architecture, Xiaopeng Motors will shorten the research and development cycle of new vehicle models by 20% in the future, and the highest generalization rate of components based on the architecture can reach 80%.
New cars such as G6, G9, and X9 are all based on a rotary structure. However, Xiaopeng Motors has no plans to switch the G3/G3i to a rotary architecture. Liu Hao believes that "as the cheapest model of Xiaopeng Motors at present, the intelligence level of the G3 is insufficient and does not conform to the company's overall strategy. After the price reduction of the G6, the G3 has become very weak compared to Xiaopeng Motors."
On December 19th, Xiaopeng Motors announced a limited time discount of 10000 yuan for all models of Xiaopeng G6, with a discounted price range of 199900 to 266900 yuan.