Tim Hsiao • Morgan Stanley

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CEO He Xiaopeng outlined a four-part strategy to boost ASP through product layout, technology, emotional design, and brand building. He stated that the Turing AI SoC provides a significant computational advantage (2,250 TOPS vs. competitors' 100-700 TOPS), enabling superior VLA+VLM models that will lead to a generational lead in ADAS performance, aiming for a 10x improvement over rivals by next year.

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CEO He Xiaopeng stated that while the focus is on long-term, steady development, a more aggressive new model launch momentum will begin in Q3 2025. President Brian Gu added that new models like the MONA Max, G7, and P7 will be catalysts for growth, and he anticipates deliveries will hit new historical highs in the third quarter.

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Co-Founder, Chairman and CEO He Xiaopeng responded that XPeng's full-stack self-development, early investments, and integrated platform approach will create a significant and widening gap with competitors. He explained that synergies across AI vehicles, flying cars, and robots exist in AI models, manufacturing, and sales networks, with tangible results like mass-produced flying cars expected by 2026.

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CEO He Xiaopeng explained that the gap will widen because leadership requires full-stack, in-house R&D across software, hardware, cloud, and chips, a capability many peers lack. He emphasized that true smart driving involves the entire vehicle, not just ADAS. President Brian Gu addressed profitability, citing improving operating leverage, the higher-margin P7 plus model, controlled R&D spending, and scale effects. He reiterated the company's goal to reach breakeven towards the end of the next year, supported by a healthy cash flow and a strong capital base.

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CEO Tony Han revealed that the HPC 3.0 platform is already deployed on the Robotaxi GXR, making it the world's first mass-produced L4 vehicle using NVIDIA's Thor chip. He highlighted its 2,000 TOPS of power and 50% cost reduction. CFO Jennifer Li added that the company's global fleet exceeds 1,300 vehicles and they aim to add hundreds more by year-end, with a goal of thousands in 2026, focusing on high-potential international markets.

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Management stated the focus is on balancing sales volume with pricing to achieve a NIO brand vehicle gross margin above 20% on 25,000 monthly units in Q4. On cost reduction, they detailed plans to cut R&D expenses by 15% in Q2, targeting a quarterly run-rate of RMB 2-2.5 billion by Q4. SG&A expenses are also targeted for reduction, aiming to be within 10% of sales revenue by Q4.

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CEO Bin Li clarified that the recent dip in NIO brand sales was a deliberate strategy to reduce promotional spending by approximately RMB 15,000 per unit. He asserted that brand overlap is minimal, with only about 2% of customers cross-shopping, and ONVO primarily attracts customers from competitors. Regarding the L60 ramp-up, Li attributed the pace to the model's advanced technologies, like the 900V architecture, and stated that reaching 10,000 units/month by December is a reasonable target.

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CEO Bin Li explained that the recent decrease in NIO brand delivery volume was a deliberate adjustment to reduce promotional costs by about RMB 15,000 per unit, not a result of cannibalization. He stated that the overlap between NIO and ONVO customers is minimal (around 2%), with ONVO primarily attracting users from competitors. Regarding the ONVO L60 ramp-up, Li acknowledged it might seem slow but is reasonable given the vehicle's advanced technologies. He projected reaching 10,000 units/month in December and 20,000 by March, attributing some order cancellations to delivery delays causing customers to miss subsidies.

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CEO William Li stated that ONVO L60 pre-orders have surpassed expectations and pricing will balance margin and competitiveness without being overly aggressive. He outlined a supply capacity target of 10,000 units per month by year-end. CFO Stanley Qu and William Li added that the NIO brand's vehicle margin, which was 12.2% in Q2, is expected to improve to around 15% by year-end through cost optimization and a better product mix. The long-term goal for the NIO brand is a monthly volume of 30,000-40,000 units with a 25% vehicle margin, while ONVO targets a margin over 15%.

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CEO Xiang Li stated that weekly sales for the new L Series have surpassed 10,000 units, expressing confidence in returning to 50,000 monthly deliveries soon. He noted that sedan models would be considered after the company achieves RMB 300 billion in revenue from its current SUV lineup.

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Li Auto management stated that weekly sales for the new L series have surpassed 10,000 units, and they are confident monthly deliveries will soon return to the 50,000-unit level. Regarding sedans, the company will consider launching them after achieving a revenue scale of RMB 300 billion with its current SUV lineup, targeting both domestic and international markets.

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CEO Xiang Li outlined a multi-faceted sales growth strategy for the year, including product upgrades, sales network expansion into lower-tier cities, enhanced marketing through live streaming, and a significant push in overseas markets. On AI, Mr. Li stated that investment will grow substantially, funded by operations. He elaborated on a long-term vision for Li Auto to become a device manufacturer in the AGI world, producing various types of robots, including autonomous vehicles (space robotics), human-assisting robots, and humanoid robots.

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CEO Xiang Li explained that the key metrics for AD are user adoption (usage rate) and willingness to pay (take rate), noting the AD Max take rate on premium models is approaching 70%. He described AD development as a positive 'snowball effect' where higher sales fund more R&D. Regarding competition, Mr. Li acknowledged Huawei as a major competitor but anticipates a long-term, healthy coexistence, emphasizing that Li Auto is continually learning from Huawei's R&D and operational systems.

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CFO Andrew Fan stated the company doesn't comment on market speculation, emphasizing Hesai's strong product reputation. CEO Yifan Li added that he was unaware of the rumors and highlighted the high technical bar for new suppliers to displace an incumbent. Regarding 'Infinity Eye', Mr. Fan described it as a flexible L2-L4 solution with a shared architecture that has already secured design wins, assuring that gross margins would remain stable despite the new product mix.

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CFO Peng Fan detailed the 2025 outlook, projecting full-year revenue of RMB 3.0-3.5 billion and shipments of 1.2-1.5 million units. He noted Q1 would see seasonal effects but expected a rebound to profitability in Q2. Fan clarified the ASPs for key products: AT128 at ~$350, the new ATX at ~$200, and a new high-performance AT series at ~$500. He affirmed a full-year blended gross margin target of around 40% and a significant increase in GAAP profitability to RMB 200-350 million.

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CEO Yifan Li stated that while he could not comment on the speculative report, Hesai's inclusion on the list was a mistake as its products are for commercial use only, and a removal would be highly beneficial for global deals. Regarding robotaxis, Li highlighted the trend of customers like Baidu adopting the AT128 ADAS LiDAR to scale commercialization. He explained that software tools are bundled with the hardware to enhance the product offering, rather than being sold separately. Executive Yuanting Shi reinforced that Hesai focuses exclusively on hardware to mitigate any data security concerns.

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CEO An Cong Hui expressed high confidence in the new models, noting strong initial orders for recently launched vehicles. He detailed that both the Zeekr 9X and 8X are positioned in the luxury segment and will feature the new super electric hybrid powertrain. Mr. An highlighted the 9X's leading technology, including its 900-volt architecture, and stated that both models are expected to achieve 'quite impressive' margins, higher than the current vehicle average.

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Executive Jing Yuan reiterated confidence in the 2025 sales target, breaking it down to 390,000 Lynk & Co and 320,000 Zeekr vehicles, supported by the company's profitability and financial strength. Executive Cong Hui An, through an interpreter, acknowledged that Q1 sales were not satisfactory but were in line with expectations, expressing confidence that new product launches in subsequent quarters, such as the Lynk & Co 900 and Zeekr 007GT, would drive growth and achieve the full-year target.

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