REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR 12(g) OF THE SECURITIES EXCHANGE ACT OF 1934 |
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Title of each class |
Trading Symbol(s) |
Name of each exchange on which registered | ||
representing two Class A ordinary shares |
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US$0.00001 per share |
* | Not for trading, but only in connection with the listing on the New York Stock Exchange of American depositary shares. |
☒ | Accelerated filer | ☐ | ||||
Non-accelerated filer |
☐ | Emerging growth company |
International Financial Reporting Standards as issued by the International Accounting Standards Board ☐ |
Other ☐ |
• | “ADAS” are to advanced driver assistance systems, which are designed to assist drivers in driving and parking functions; |
• | “ADSs” are to American depositary shares, each of which represents two Class A ordinary shares; |
• | “affiliate shareholders of the Group VIEs” are to (i) the individual shareholders of the Group VIEs and (ii) Guangzhou Kuntu Technology Co., Ltd., or Kuntu Technology, which holds all of equity interest in Xintu Technology; Mr. Heng Xia and Mr. Tao He are the ultimate beneficial owners of equity interest in Kuntu Technology; for avoidance of doubt, affiliate shareholders of the Group VIEs do not include Guangzhou Xiaopeng Motors Technology Co., Ltd., or Xiaopeng Technology, which is our subsidiary and holds 50% of equity interest in Zhipeng IoV, or Guangzhou Xiaopeng Zhihui Chuxing Technology Co., Ltd., or Xiaopeng Chuxing, which is our subsidiary and holds 50% of equity interest in Yidian Chuxing; |
• | “AI” are to artificial intelligence; |
• | “app” are to computer program designed to run on smartphones and other mobile services; |
• | “China” and the “PRC” are to the People’s Republic of China, excluding, for the purposes of this annual report only, Taiwan, the Hong Kong Special Administrative Region and the Macao Special Administrative Region; |
• | “E/E architecture” or “EEA” are to electrical/electronic architecture; |
• | “EV” or “electric vehicle” are to the battery electric vehicle used for the carriage of passengers; |
• | “the Group” are to XPeng Inc., the Group VIEs and their respective subsidiaries; |
• | “Group VIEs” are to (i) Guangzhou Zhipeng IoV Technology Co., Ltd., or Zhipeng IoV, and (ii) Guangzhou Yidian Zhihui Chuxing Technology Co., Ltd., or Yidian Chuxing, and (iii) Guangzhou Xintu Technology Co., Ltd, or Xintu Technology; |
• | “ICE” are to internal combustion engine; |
• | “individual shareholders of the Group VIEs” are to (i) Mr. Heng Xia, who holds 40% of equity interest in Zhipeng IoV and 10% of equity interest in Yidian Chuxing, (ii) Mr. Tao He, who holds 10% of equity interest in Zhipeng IoV, and (iii) Mr. Xiaopeng He, who holds 40% of equity interest in Yidian Chuxing; |
• | “LFP battery” are to lithium iron phosphate battery; |
• | “LIDAR” are to light detection and ranging; |
• | “mid- to high-end segment” are to the segment in China’s passenger vehicle market with prices ranging from RMB150,000 to RMB400,000, not including any government subsidy; |
• | “MIIT” are to the Ministry of Industry and Information Technology of the People’s Republic of China; |
• | “NEDC” are to New European Driving Cycle, which is designed to assess the emission levels of car engines and fuel economy in passenger vehicles; |
• | “NEV” are to new energy passenger vehicles, comprising of battery electrics vehicles, plug-in hybrid electric vehicles (including extended-range electric vehicles) and fuel cell electric vehicles; |
• | “OEM” are to automotive original equipment manufacturer; |
• | “ordinary shares” are to our Class A ordinary shares, US$0.00001 par value per share and Class B ordinary shares, US$0.00001 par value per share; each Class A ordinary share is entitled to one vote; and each Class B ordinary share is entitled to 10 votes; |
• | “OTA” are to over-the-air; |
• | “RMB” or “Renminbi” are to the legal currency of China; |
• | “Smart EV” are to electric vehicles with a rich array of connectivity, advanced driver assistance systems and AI technology features; |
• | “Subsidiaries” are to an entity controlled by XPeng Inc. and consolidated with XPeng Inc.’s results of operations due to XPeng Inc.’s equity interest in such entity, instead of contractual arrangements; for avoidance of doubt, the Group VIEs are not subsidiaries of XPeng Inc.; |
• | “SUV” are to sport utility vehicle; |
• | “US$,” “U.S. dollars,” or “dollars” are to the legal currency of the United States; |
• | “XPeng,” “we,” “us,” “our company” and “our” are to XPeng Inc. and/or its subsidiaries, as the context requires; and |
• | “2019 Equity Incentive Plan” are to the equity incentive plan of our company approved and adopted in June 2020, as amended and restated in June 2021. |
• | our goal and strategies; |
• | our expansion plans; |
• | our future business development, financial condition and results of operations; |
• | expected changes in our revenues, costs or expenditures; |
• | the trends in, and size of, China’s EV market; |
• | our expectations regarding demand for, and market acceptance of, our products and services; |
• | our expectations regarding our relationships with customers, suppliers, third-party service providers, strategic partners and other stakeholders; |
• | competition for, among other things, capital, technology and skilled personnel, in our industry; |
• | the impact of COVID-19 pandemic on our business, results of operations and financial condition; |
• | changes to regulatory and operating conditions in the industry and geographical markets in which we operate; and |
• | general economic and business conditions. |
ITEM 1. |
IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS |
ITEM 2. |
OFFER STATISTICS AND EXPECTED TIMETABLE |
ITEM 3. |
KEY INFORMATION |
• | We have a limited operating history and face significant challenges as a new entrant into our industry. |
• | As we continue to grow, we may not be able to effectively manage our growth, which could negatively impact our brand and financial performance. |
• | Our research and development efforts may not yield expected results. |
• | If our Smart EVs, including software systems, fail to offer a good mobility experience and meet customer expectations, our business, results of operations and reputation would be materially and adversely affected. |
• | We may be subject to risks associated with ADAS technologies. |
• | Our customers may cancel their orders despite their deposit payment and online confirmation. |
• | China’s passenger vehicle market is highly competitive, and demand for EVs may be cyclical and volatile. |
• | We have incurred significant losses and negative cash flows from operating activities, all of which may continue in the future. |
• | The continuing shortage in the supply of semiconductors may be disruptive to the Group’s operations and adversely affect our business, results of operations and financial condition. |
• | Our business plans require a significant amount of capital. If we fail to obtain required external financing to sustain our business, we may be forced to curtail or discontinue the Group’s operations. In addition, our future capital needs may require us to sell additional equity or debt securities that may dilute our shareholders or introduce covenants that may restrict the Group’s operations or our ability to pay dividends. |
• | The unavailability, reduction or elimination of government and economic incentives or government policies that are favorable for new energy vehicles and domestically produced vehicles could materially and adversely affect our business, financial condition and results of operations. |
• | The COVID-19 pandemic has adversely affected, and may continue to adversely affect, our results of operations. |
• | We depend on revenues generated from a limited number of Smart EV models. |
• | Actual or alleged failure to comply with laws, regulations, rules, policies and other obligations regarding privacy, data protection, cybersecurity and information security could subject us to significant reputational, financial, legal and operational consequences. For instance, any misuse of AI technology, such as facial recognition technology, may have a material adverse effect on our reputation and results of operations. |
• | Changes in the political and economic policies of the PRC government may materially and adversely affect our business, financial condition and results of operations and may result in our inability to sustain our growth and expansion strategies. The Chinese government may intervene or influence the Group’s operations at any time, and may exert more control over offerings conducted overseas and foreign investment in China-based issuers, which could result in a material change in the Group’s operations and the value of our Class A ordinary shares and ADSs. Any actions by the Chinese government to exert more oversight and control over offerings that are conducted overseas and/or foreign investment in China-based issuers could significantly limit or completely hinder our ability to offer or continue to offer our Class A ordinary shares and ADSs to investors and cause the value of such securities to significantly decline or be worthless. |
• | For instance, on December 24, 2021, the China Securities Regulatory Commission, or the CSRC, released draft new rules, which are open for public comments until January 23, 2022, that would impose filing requirements on certain “indirect overseas offering and listing” of PRC domestic companies. While, as of the date of this annual report, we have not been informed by any PRC governmental authority of any requirement that we shall apply for approval or filing for our initial public offering in the U.S. in August 2020, our follow-on public offering completed in December 2020 or our listing on the Hong Kong Stock Exchange and the associated public offering in July 2021, if the CSRC or other relevant PRC government authorities subsequently determine that prior approval or filings procedure is required for our initial public offering in the U.S. in August 2020, our follow-on public offering completed in December 2020 or our listing on the Hong Kong Stock Exchange and the associated public offering in July 2021, we may face regulatory actions or other sanctions from the CSRC or other PRC regulatory authorities. Any failure to obtain the relevant approval or complete the filings and other relevant regulatory procedures may subject us to regulatory actions or other sanctions from the CSRC or other PRC regulatory authorities, which may have a material adverse effect on our business, operations or financial conditions. |
• | There are uncertainties regarding the interpretation and enforcement of PRC laws, rules and regulations. In addition, rules and regulations in China can change quickly with little advance notice. |
• | The audit report included in this annual report is prepared by an auditor who is not inspected by the U.S. Public Company Accounting Oversight Board and, as such, our investors are deprived of the benefits of such inspection. |
• | Due to the enactment of the Holding Foreign Companies Accountable Act, or the HFCA Act, we may not be able to maintain our listing on the NYSE. Among other things, the HFCA Act provides if the SEC determines that we have filed audit reports issued by a registered public accounting firm that has not been subject to inspection by the PCAOB for three consecutive years beginning in 2021, the SEC shall prohibit our securities from being traded on a national securities exchange or in the over the counter trading market in the U.S. In the event of such determination by the SEC, the NYSE would delist our ADSs. As stated in its report dated December 16, 2021, the PCAOB has determined that it is unable to inspect or investigate completely registered public accounting firms headquartered in mainland China and Hong Kong, including our auditor as an independent registered public accounting firm. |
• | Certain PRC regulations establish more complex procedures for acquisitions conducted by foreign investors that could make it more difficult for us to grow through acquisitions. |
• | PRC regulations relating to investments in offshore companies by PRC residents may subject our PRC-resident beneficial owners or our PRC subsidiaries to liability or penalties, limit our ability to inject capital into our PRC subsidiaries or limit our PRC subsidiaries’ ability to increase their registered capital or distribute profits. |
• | Revenue contributions from the Group VIEs have not been material. Nonetheless, if the PRC government deems that the contractual arrangements in relation to the Group VIEs do not comply with PRC regulatory restrictions on foreign investment in the relevant industries, or if these regulations or the interpretation of existing regulations change in the future, our Class A ordinary shares and ADSs may decline in value if we are unable to assert our contractual control rights over the assets of the Group VIEs. |
• | Our contractual arrangements with the Group VIEs may result in adverse tax consequences to us. |
• | We rely in part on contractual arrangements with Zhipeng IoV, Yidian Chuxing and the respective affiliate shareholders of such Group VIEs to operate the value-added telecommunications business. We rely on contractual arrangements with Xintu Technology and its affiliate shareholder, which enabled us to operate land surface mobile surveying and preparing true three-dimensional maps and navigation electronic maps. Such contractual arrangements may not be as effective as direct ownership in providing operational control and otherwise have a material adverse effect as to our business. |
• | If we exercise the option to acquire equity ownership of the Group VIEs, the ownership transfer may subject us to certain limitations and substantial costs. |
• | The affiliate shareholders of the Group VIEs may have potential conflicts of interest with us, which may materially and adversely affect our business and financial condition. 50% of equity interest in Zhipeng IoV is held by us, and Mr. Heng Xia, our co-founder, executive director and president, and Mr. Tao He, our co-founder and senior vice president, hold 40% and 10% of equity interest in Zhipeng IoV, respectively. 50% of equity interest in Yidian Chuxing is held by us, and Mr. Xiaopeng He, our co-founder, chairman and chief executive officer, and Mr. Heng Xia hold 40% and 10% of equity interest in Yidian Chuxing, respectively. Kuntu Technology currently holds all of the equity interest in Xintu Technology. |
• | design and produce safe, reliable and quality vehicles on an ongoing basis; |
• | build a well-recognized and respected brand; |
• | expand our customer base; |
• | properly price our products and services; |
• | advance our technological capabilities in key areas, such as ADAS, intelligent operating system, electric powertrain and E/E architecture; |
• | successfully market our Smart EVs and our services, including our ADAS and various value-added services, such as insurance agency service, automotive loan referral and charging solutions; |
• | improve operating efficiency and economies of scale; |
• | operate our manufacturing plant in a safe and cost-efficient manner; |
• | attract, retain and motivate our employees; |
• | anticipate and adapt to changing market conditions, including changes in consumer preferences and competitive landscape; and |
• | navigate a complex and evolving regulatory environment. |
• | managing a larger organization with a greater number of employees in different divisions; |
• | controlling expenses and investments in anticipation of expanded operations; |
• | establishing or expanding design, manufacturing, sales and service facilities, as well as charging network; |
• | implementing and enhancing administrative infrastructure, systems and processes; and |
• | executing our strategies and business initiatives successfully. |
• | an increase in the cost, or decrease in the available supply, of materials used in the battery cells, such as lithium, nickel, cobalt and manganese, which would in turn result in an increase in the cost of lithium battery cells; |
• | disruption in the supply of battery cells due to quality issues or recalls by battery cell manufacturers; and |
• | the inability or unwillingness of our current battery cell manufacturers to build or operate battery cell manufacturing plants to supply the numbers of lithium cells required to support the growth of the EV industry as demand for such battery cells increases. |
• | perceptions about EV quality, safety, design, performance and cost, especially if adverse events or accidents occur that are linked to the quality or safety of EVs, whether or not such vehicles are produced by us or other OEMs; |
• | perceptions about vehicle safety in general, in particular safety issues that may be attributed to the use of advanced technologies, such as ADAS and lithium battery cells; |
• | the limited range over which EVs may be driven on a single battery charge and the speed at which batteries can be charged; |
• | the decline of an EV’s range resulting from deterioration over time in the battery’s ability to hold a charge; |
• | the availability of other types of NEVs, including plug-in hybrid electric vehicles; |
• | improvements in the fuel economy of the internal combustion engine; |
• | the availability of after-sales service for EVs; |
• | the environmental consciousness of consumers; |
• | access to charging stations, standardization of EV charging systems and consumers’ perceptions about convenience and cost for charging an EV; |
• | the availability of tax and other governmental incentives to purchase and operate EVs or future regulation requiring increased use of nonpolluting vehicles; |
• | perceptions about and the actual cost of alternative fuel; and |
• | macroeconomic factors. |
• | cease offering Smart EVs or services that incorporate or use the challenged intellectual property; |
• | pay substantial damages; |
• | seek a license from the holder of the infringed intellectual property right, which license may not be available on reasonable terms or at all; |
• | redesign our Smart EVs or relevant services which would incur significant cost; or |
• | establish and maintain alternative branding for our Smart EVs and services. |
• | difficulties in assimilating and integrating the operations, personnel, systems, data, technologies, products and services of the acquired business; |
• | inability of the acquired technologies, products or businesses to achieve expected levels of revenue, profitability, productivity or other benefits including the failure to successfully further develop the acquired technology; |
• | difficulties in retaining, training, motivating and integrating key personnel; |
• | diversion of management’s time and resources from our normal daily operations and potential disruptions to our ongoing businesses; |
• | strain on our liquidity and capital resources; |
• | difficulties in executing intended business plans and achieving synergies from such strategic investments or acquisitions; |
• | difficulties in maintaining uniform standards, controls, procedures and policies within the overall organization; |
• | difficulties in retaining relationships with existing suppliers and other partners of the acquired business; |
• | risks of entering markets in which we have limited or no prior experience; |
• | regulatory risks, including remaining in good standing with existing regulatory bodies or receiving any necessary pre-closing or post-closing approvals, as well as being subject to new regulators with oversight over an acquired business; |
• | assumption of contractual obligations that contain terms that are not beneficial to us, require us to license or waive intellectual property rights or increase our risk for liability; |
• | liability for activities of the acquired business before the acquisition, including intellectual property infringement claims, violations of laws, commercial disputes, tax liabilities and other known and unknown liabilities; and |
• | unexpected costs and unknown risks and liabilities associated with strategic investments or acquisitions. |
• | the trade war between the two countries since 2018; |
• | the COVID-19 pandemic; |
• | the PRC National People’s Congress’ passage of Hong Kong national security legislation; |
• | the imposition of U.S. sanctions on certain Chinese officials from China’s central government and the Hong Kong Special Administrative Region by the U.S. government, and the imposition of sanctions on certain individuals from the U.S. by the Chinese government; |
• | various executive orders issued by the U.S. government, which include, among others, |
• | the executive order issued in August 2020, as supplemented and amended from time to time, that prohibits certain transactions with ByteDance Ltd., Tencent Holdings Ltd. and the respective subsidiaries of such companies; |
• | the executive order issued in November 2020, as supplemented and amended from time to time, including, among others, by an executive order issued in June 2021, that prohibits U.S. persons from transacting publicly traded securities of certain Chinese companies named in such executive order; |
• | the executive order issued in January 2021, as supplemented and amended from time to time, that prohibits such transactions as are identified by the U.S. Secretary of Commerce with certain “Chinese connected software applications,” including Alipay and WeChat Pay; and |
• | the imposition and application of sanction blocking statutes by the Chinese government, including the Rules on Counteracting Unjustified Extra-territorial Application of Foreign Legislation and Other Measures promulgated by the MOFCOM, on January 9, 2021, which will apply to Chinese individuals or entities that are purportedly barred by a foreign country’s law from dealing with nationals or entities of a third country. |
• | fluctuations in foreign currency exchange rates; |
• | increased costs associated with maintaining the ability to understand the local markets and develop and maintain effective marketing and distributing presence in various countries; |
• | providing customer service and support in these markets; |
• | difficulty with staffing and managing overseas operations; |
• | failure to develop appropriate risk management and internal control structures tailored to overseas operations; |
• | difficulty and cost relating to compliance with different commercial and legal requirements of the overseas markets in which we offer or plan to offer our products and services including charging and other electric infrastructures; |
• | failure to obtain or maintain permits for our products or services in these markets; |
• | different safety concerns and measures needed to address accident related risks in different countries and regions; |
• | inability to obtain, maintain or enforce intellectual property rights; |
• | unanticipated changes in prevailing economic conditions and regulatory requirements; and |
• | trade barriers such as export requirements, tariffs, taxes and other restrictions and expenses. |
• | revoking our relevant business and operating licenses; |
• | levying fines on us; |
• | confiscating any of our income that they deem to be obtained through illegal operations; |
• | shutting down our relevant services; |
• | discontinuing or restricting the Group’s operations in China; |
• | imposing conditions or requirements with which we may not be able to comply; |
• | requiring us to change our corporate structure and contractual arrangements; |
• | restricting or prohibiting our use of the proceeds from overseas offering to finance the Group VIEs’ business and operations; and |
• | taking other regulatory or enforcement actions that could be harmful to our business. |
• | the composition of our board of directors and, through it, any determinations with respect to the Group’s operations, business direction and policies, including the appointment and removal of officers; |
• | any determinations with respect to mergers or other business combinations; |
• | our disposition of substantially all of our assets; and |
• | any change in control. |
• | regulatory developments affecting us or our industry; |
• | announcements of studies and reports relating to the quality of our product offerings or those of our competitors; |
• | changes in the economic performance or market valuations of other providers of electric vehicles; |
• | actual or anticipated fluctuations in our quarterly results of operations and changes or revisions of our expected results; |
• | changes in financial estimates by securities research analysts; |
• | conditions in the EV market in China; |
• | announcements by us or our competitors of new product and service offerings, acquisitions, strategic relationships, joint ventures, capital raisings or capital commitments; |
• | additions to or departures of our senior management; |
• | the implementation of the HFCA Act and future development in that regard; |
• | fluctuations of exchange rates between the Renminbi, the Hong Kong dollar and the U.S. dollar; |
• | release or expiry of lock-up or other transfer restrictions on our Class A ordinary shares or ADSs; and |
• | sales or perceived potential sales of additional Class A ordinary shares or ADSs. |
• | we have instructed the depositary that we do not wish a discretionary proxy to be given; |
• | we have informed the depositary that there is substantial opposition as to a matter to be voted on at the meeting; |
• | a matter to be voted on at the meeting would have an adverse impact on holders of ADSs; or |
• | the voting at the meeting is to be made on a show of hands. |
ITEM 4. |
INFORMATION ON THE COMPANY |
• | In December 2018, we started delivery of the G3, which is our first Smart EV and a compact SUV. |
• | In May 2020, we started delivery of the P7, which is our second Smart EV and a sports sedan. |
• | In March 2021, we started delivery of the P7 Wing, which is a limited edition designed to accentuate the sporty and dynamic styling of the sports sedan with scissor-style front doors that are traditionally only available in luxury sports vehicles. |
• | In March 2021, we introduced newer versions of the G3 and the P7 that are equipped with lithium iron phosphate battery to provide our customers with a wider variety of options. |
• | In April 2021, we unveiled the P5, which is our third Smart EV and a family sedan, and started delivery in September 2021. |
• | In July 2021, we introduced the G3i, which is the mid-cycle facelift version of the G3, and started delivery in August 2021. |
• | We have a strong pipeline of new Smart EVs. In November 2021, we unveiled the G9 and the official launch of the G9 is expected in the third quarter of 2022. |
• | G3i (compact SUV), with a wheelbase of 2,625 mm and NEDC range between 460 km and 520 km. |
• | P7 (sports sedan), with a wheelbase of 2,998 mm and NEDC range between 480 km and 706 km. |
• | P7 Wing (sports sedan), with a wheelbase of 2,998 mm and NEDC range between 562 km and 670 km. |
• | P5 (family sedan), with a wheelbase of 2,768 mm and NEDC range between 460 km and 600 km. |