BEIJING, January 8 ( TMTPOST ) – In 2023, Li Auto saw a continuous rise in delivery volume, while NIO and XPeng performed less well.

The market value of Li Auto has surpassed the combined market values of the latter two.

Li Auto Profitable While NIO and XPeng in Red

Last year, Li Auto delivered 376,030 units, ranking the first among the three automakers, while NIO and XPeng delivered 160,038 units and 141,601 units, respectively.

Li Auto' monthly delivery volume went up from 15,141 units in January to a monthly delivery of 50,000 units. The company surpassed its annual sales target of 300,000 units at the end of November 2023.

In contrast, XPeng's deliveries in the first half of 2023 had been unable to exceed 10,000 vehicles. It was not until July 2023 that the delivery picked up, and after October 2023, the company ’ s delivery volume exceeded 20,000 units.

The delivery performance subsequently affected the financial performance of the three automakers.

With the advantage in delivery volume, Li Auto achieved a total revenue of 82.12 billion yuan and a net profit of 6.05 billion yuan in the first three quarters of 2023, making a profit for four consecutive quarters.

NIO and XPeng, on the other hand, reported revenues of 38.52 billion yuan and 17.62 billion yuan in the first three quarters in 2023, respectively, and continued to operate at a loss. In the first three quarters in 2023, NIO had a net loss of 15.42 billion yuan, while XPeng ’ s loss reached 9.03 billion yuan, far from being profitable.

Li Auto reached a 22.0% gross profit margin in the third quarter in 2023. NIO and XPeng were still struggling to increase their gross profit margin, with their gross profit margins in the third quarter at 8% and -2.7%, respectively.

All three automakers did not face any tight funding situations. As of September 30, 2023, Li Auto held a cash reserve of 88.52 billion yuan, the largest among the three. NIO and XPeng's cash reserves were 45.2 billion yuan and 36.48 billion yuan, respectively.

Organizational Transformation

NIO, XPeng and Li Auto have long moved beyond the startup phase, all evolving into large-scale corporations with tens of thousands of employees. As of December 31, 2022, their workforce reached 26,763, 19,396, and 15,829, respectively. The expansion of the company scale has required organizational restructuring.

In April 2023, Li Xiang, the founder and CEO of Li Auto, said that smart electric vehicle manufacturers are not comparable to conventional car makers in terms of the financial resources.

He said that the matrix organizational transformation of Li Auto has just begun, and it will be completed until at least 2025.

The unsuccessful launch of the XPeng G9 made He Xiaopeng, the cofounder and chairman of XPeng, realize organizational issues of the company. Since October 2022, XPeng has also initiated organizational restructuring, including the establishment of five committees: strategy, product planning, technical planning, production and sales, and OTA.

During the organizational restructuring period, XPeng experienced multiple personnel changes, especially at the executive level.

In comparison to Li Auto and XPeng, which began organizational changes from the end of 2022, NIO started organizational changes in the second half of 2023. In November 2023, NIO's announcement of a 10% staff reduction revealed its efficiency issues.

Technology Competition

With the release of XPeng Xmart OS 4.5.0, XPeng has completed the layout and application of the navigation assistance driving function in 243 unmapped cities across China. It currently stands as the first automaker in the industry to fully open city intelligent driving on a large scale.

In September 2023, NIO held a NIO IN event to introduce its full-stack R&D system, involving 12 sectors such as chips and battery systems.

Technology has increasingly become an indicator of the strength of automakers, and intelligent driving capability is just one of the many technologies that attract attention. Beyond intelligent driving, the three automakers are also laying out cutting-edge technologies in related business areas.

For example, in order to enter the pure electric racing track, Li Auto self-developed an 800V high-voltage pure electric platform, and developed charging robots.

In terms of R&D investment, NIO remains the most generous one among the three, spending 9.46 billion yuan on R&D in the first three quarters in 2023, with monthly R&D expenses consistently exceeding 3 billion yuan. Li Auto and XPeng had R&D expenses of 7.1 billion yuan and 3.98 billion yuan in the first three quarters in 2023, respectively.

For the three automakers, the ultimate goal of R&D is to bring operational benefits, forming a positive cycle.

Who Will Be the Winner?

Li Auto ’ s financial and delivery performance in 2023 surpassed XPeng and NIO, but all three car manufacturers are actively adjusting their strategies based on market conditions, and the ultimate winner has yet to be determined.

In 2024, the race for survival in the automotive industry will only be more intense, with NIO, XPeng and Li Auto all seeking opportunities to stay in the game.

All three car manufacturers have clear plans for key elements such as product lineup, intelligent driving technology, and charging services.

Li Auto's product matrix strategy reveals its intention to comprehensively expand in both hybrid and pure electric vehicle domains. The company plans to launch four new models next year, including a hybrid SUV and three pure electric models ( excluding MEGA ) .

XPeng will focus on the mid-to-low-end market in 2024, aiming to achieve long-term development by expanding market share. It is reported that the MONA brand electric sedan, a result of XPeng's collaboration with Didi Chuxing, is expected to be launched in the third quarter this year, potentially bringing a broader customer base to XPeng.

NIO, on the other hand, has stated that it will adhere to its high-end pure electric market positioning. Li Bin, NIO's founder, chairman and CEO, also revealed plans to enter the commercial vehicle market.

In terms of product planning, NIO's first MPV product and the product line layout for the family market may help the company tap into new market areas.

In the field of intelligent driving technology, it is expected that all three car manufacturers will further increase research and development and technological applications.

In the area of charging and battery swapping services, NIO has a mature layout in the power exchange network and has already cooperated with Changan and Geely. Li Auto and XPeng, nevertheless, are focusing on fast-charging. It is expected that in 2024, NIO will continue to expand its battery swapping network, while Li Auto and XPeng may increase investment in fast-charging technology and infrastructure.

Li Auto is reportedly planning to expand its number of stores to over 800 to support its target of achieving 800,000 in sales.

Intelligent driving, charging and battery swapping facilities, and brand strategy have become critical factors for the three car manufacturers to establish their presence in the market.

The competition in the electric vehice market in 2024 is only getting more intense, but the market has not yet reached saturation. NIO, XPeng and Li Auto do not have much room for trial and error.