eastwest connect

Xpeng needs to ramp up production capacity for increasing the delivery volume

Xpeng needs to ramp up production capacity for increasing the delivery volume

According to the Value Research Institute, if XPeng wants to solve the problem of insufficient production capacity, it must solve two cruxes: one is the operating efficiency of the factory, and the other is the supply of upstream raw materials and semiconductors.

Improving delivery volume is the current top priority for new carmakers, and XPeng is no exception. XPeng CEO He Xiaopeng emphasized in the earnings conference call that the demand for XPeng is not a problem, and the new model G9 has also been recognized by the market. — “We are confident that XPeng G9 will become the top three in the pure electric SUV segment with a price of more than 300,000, and gradually narrow the gap with the top two in the next two years.”

The next problem is then capacity.

At present, XPeng has three production bases in Zhaoqing, Guangzhou, and Wuhan, as well as a Haima XPeng smart factory in Zhengzhou. However, these few self-built factories have not been able to work all their magic.

Among them, the Guangzhou factory, which was originally planned to be put into operation in August this year, with an annual output of 100,000 vehicles, is constrained by various objective factors. According to media reports, XPeng has postponed the full production of the Guangzhou factory until the end of 2022.

As for the Wuhan factory, it was signed to start construction in April last year and is expected to be put into operation in 2023. As a new-generation intelligent manufacturing base, XPeng Wuhan Factory will introduce the next-generation intelligent vehicle platform, with a planned annual production capacity of 100,000 vehicles, and the peak production capacity of the production line at full load is expected to reach 150,000-200,000 vehicles.

XPeng has to rely on the two factories in Zhengzhou and Zhaoqing for short-term production. It can be seen from the delivery data of various models in the third quarter that the problem may lie in the main factory in Zhengzhou.

The Zhengzhou smart factory established with Haima Automobile in 2018 is XPeng’s first production line and the only OEM production line, mainly responsible for the production of XPeng G3. In the third quarter, the delivery of XPeng G3 dropped sharply, which is believed to be related to the shutdown of the Zhengzhou factory due to the pandemic.

A similar situation happened once during the heavy rain in Zhengzhou in July last year. On July 21 last year, the Haima XPeng smart factory in Zhengzhou was forced to shut down due to water and power outages, which had a significant impact on the delivery of XPeng G3 in the quarter.

The Zhaoqing factory, which is less affected by these objective factors, can be said to carry the hope of the whole manufacturing output. Considering that the investment and construction period of the new factory is too long, XPeng is also working hard to expand the production capacity of the Zhaoqing factory and improve the level of intelligence and operating efficiency.

Compared with when it started production in May 2020, the annual production capacity of the Zhaoqing plant has more than doubled, with a peak production capacity of 500-700 vehicles per day. In August last year, the second phase project of XPeng Zhaoqing factory was also announced to start construction. It will build an Internet of Things and monitoring system covering the entire production line in accordance with Industry 4.0 standards, and upgrade the production line of Zhaoqing factory with digital intelligence.

After the Guangzhou and Wuhan factories are fully put into production, XPeng’s delivery level will be greatly improved if there are no accidents.