Unprecedented news: XPeng is really taking off this time.

According to XPeng Aero's official Weibo post, on November 13, XPeng Aero secured the largest order volume to date in the global flying car industry at the Zhuhai Airshow, with 2,008 units.

Additionally, XPeng Aero's flying car smart manufacturing base, which began construction in October this year, is the world's first flying car factory to utilize modern assembly lines for large-scale mass production. Just recently, the market was generally skeptical about XPeng Aero's or XPeng Motors' "flying car dream" succeeding in one fell swoop.

According to Tianyancha APP, Guangdong XPeng Motors Holding and its founder and CEO He Xiaopeng hold 19.9% and 60.1% stakes in XPeng Aero, respectively, while Zhao Deli, the founder of XPeng Aero, holds a 15% stake.

Is XPeng taking off first in the low-altitude economy era?

XPeng Aero's productization has initially begun, helping the industry enter the 0-1 phase

Huachuang Securities noted in its research that the current market situation of the flying car industry can be roughly divided into four stages: Stage 1: Logical storytelling; Stage 2: Products; Stage 3: Order volume surge; Stage 4: Mergers and acquisitions.

Judging from current industry dynamics, the flying car industry is clearly in a chaotic period marked by frequent conceptual product launches, the advent of commercializable products, and the initial surge in a small number of orders. In other words, it is in the 0-1 phase of a high-tech industry.

At this time, XPeng Aero's successful acquisition of a record-high order volume after the new product launch has greatly boosted the confidence of the entire industry. This indicates that a major product capable of driving the flying car industry into the productization stage may not be far off.

According to past information, XPeng Aero's "land aircraft carrier" flying car, which completed its global public debut at the Zhuhai Airshow, was first publicly unveiled as a conceptual product last October.

Since then, there have been frequent updates on the development progress of this conceptual product, culminating in the official launch of the "land aircraft carrier" recently. At this point, XPeng Motors has been in the second stage of market speculation - products.

Since September 1 this year, the share price of Hong Kong-listed XPeng Motors-W has increased by over 50%, far outpacing the Hang Seng Index (up 12%) and Hang Seng Tech Index (up 23%) over the same period.

The primary driver of this growth is the increase in XPeng Motors' sales in the first half of 2024. However, an underlying factor is the market's embrace of the entire low-altitude economy sector after September, with XPeng Aero at its core.

XPeng Motors' own new energy business is experiencing a new boom. Data shows that in the first half of this year, XPeng Motors delivered a 25.6% year-on-year increase in vehicle deliveries and a 61.2% increase in total revenue. In October alone, it set a new monthly record for deliveries, with a nearly 20% increase and a 12% month-on-month surge, reaching 23,900 vehicles.

Meanwhile, XPeng Holdings will enjoy the absolute equity returns from XPeng Aero. According to Tianyancha APP, Guangdong XPeng Motors Holding and its founder and CEO He Xiaopeng together hold an 80% stake in XPeng Aero. In the future, XPeng stands to benefit significantly from its flying car business.

In fact, there are currently over 20 eVTOL passenger vehicles similar to the "land aircraft carrier" available in China, but most are only available for small-batch pre-sales. Only a few companies, such as XPeng Aero and EHang, have secured larger order volumes. This uniqueness is the source of their value.

According to the 2024 Hainan International Consumer Products Expo, EHang has a backlog of orders for its manned unmanned aerial vehicles extending beyond 2025, with a volume of 1,000 to 2,000 units.

As for XPeng Aero, according to the Zhuhai Airshow, on November 13, it signed cooperation and product reservation agreements with 12 bulk reservation intent customers from various sectors such as domestic transportation, tourism, real estate, and technology. The new orders totaled 2,008 units, the largest order volume in the global flying car industry to date.

Coupled with the 1,000 orders disclosed earlier, XPeng Aero's cumulative order volume has exceeded 3,000. It is currently difficult to accurately estimate its commercial value, but based on public information, reaching the level of billions of yuan is not difficult. This will have a significant impact on XPeng's overall revenue.

From an industry perspective, the substantial orders for XPeng Aero and EHang undoubtedly boost the confidence of peers and investors alike.

XPeng Aero's core difference: Infinite imagination space for the consumer end

The story has been written, and now the pressure is on these pioneers to deliver on their orders as scheduled.

In this regard, XPeng Aero already has a plan in place. As early as July this year, XPeng Aero signed a cooperation agreement with the Guangzhou Development Zone, clarifying the construction of a flying car R&D, smart manufacturing, and sales center.

Recently, Zhao Deli further stated that in October, construction began on XPeng Aero's flying car smart manufacturing base, which will be the world's first flying car factory to utilize modern assembly lines for large-scale mass production. This factory will produce the "aircraft" components of the "land aircraft carrier" with a planned annual capacity of 10,000 units and is scheduled to be completed in the third quarter of 2025, with mass production and delivery of flying cars expected in 2026.

XPeng Aero has already formed the rudiments of a full chain encompassing R&D, production, and sales, with the next step being mass production. However, according to this plan, the earliest potential initial performance delivery period for the "land aircraft carrier" will be 2026. In this race, EHang, which has been laying the groundwork for years, is slightly ahead in progress and has already started contributing a small amount of revenue.

There will undoubtedly be differences within the industry, but until this juncture, it is still a period of improving the entire industrial ecosystem, including the development of complete machine products, the construction of supply chain systems, and the formulation of flight-related standards and regulations.

For the foreseeable future, the market's focus will remain on "products" - competitive products with orders that can continue to open up new markets. This is also the key to supporting the sustainability of the low-altitude economy market in the coming year.

Currently, defining a differentiated market and focusing on the C-end "land aircraft carrier" has this potential.

Unlike the purely vertical take-off and landing aircraft currently available on the market, the "land aircraft carrier," as an advanced self-developed split-type flying car, is both the world's only car with a trunk that can accommodate an "aircraft" and the world's only "aircraft" that can fit into a car trunk. It perfectly leverages XPeng Aero's expertise in the field of aviation, as well as XPeng Motors' technology and resources in automobile manufacturing and autonomous driving.

As a result, it becomes a flying car that can navigate both ground and air amphibious driving scenarios, offering more flexible usage scenarios that cover various areas such as land and air transportation and flight camp experiences.

As introduced at the exhibition, XPeng Aero's "land aircraft carrier" aircraft enables users with no prior experience to "get started in 5 minutes and become proficient in 3 hours" through its aerial intelligent driving system, making flight more accessible from the driver's learning perspective.

This high-tech and novel experience, which aligns with contemporary outdoor enthusiasts' needs, can quickly attract the attention and affection of consumers for the "land aircraft carrier."

From XPeng Aero's perspective, when highly complex aircraft that were previously difficult to use become more consumer-friendly and durable, the target market will significantly expand.

Founder Zhao Deli recently stated that a pre-sale conference will be held in December to initiate pre-orders for individual users, "with the goal of tens of thousands of pre-orders."

It is understood that a small number of customers have already received targeted "first flight codes" and completed product reservations using these codes.

To date, XPeng Aero has completed cooperation agreements with over 130 flight camps and plans to establish over 200 flight camp locations by the end of the year. These application scenarios are primarily targeted at individual users and public services, including urban short-distance travel, emergency medical rescue, and short-distance obstacle-crossing rescue.

Currently, XPeng Aero's landed customers are mainly from the B-end and G-end. The C-end will further broaden its imagination. Moreover, for the C-end market, XPeng Aero has an advantage in pricing.

Currently, the most competitive product on the market is EHang's EH216-S, priced at RMB 2.39 million per unit with a designed range of 30 kilometers. In contrast, the currently known pricing for the "land aircraft carrier" does not exceed RMB 2 million. The main car body relies on an extended-range power platform with a combined driving range of over 1,000 kilometers, while the flying body can fly six times on a full tank of fuel and full battery.

Compared to EHang, XPeng is indeed more cost-effective. However, it requires users with a Class C driver's license to operate this six-wheeled vehicle, adding a restriction on the user group.

There are still many possibilities in the future. As the "first bird to fly" in the flying car industry, XPeng Aero's future is still being explored, and the "land aircraft carrier" is just the first stone thrown to test the waters.

Conclusion

Compared to the new energy sector, the low-altitude economy holds vast potential, encompassing key points of development such as high-tech manufacturing and intelligent technology. It is not only a hot spot in the industry but also holds an important strategic position in the manufacturing sector. Its imagination space is thus firmly established.

However, returning to the enterprise level, just like the lengthy process from initial research and development to eventual popularization of electric vehicles, the more elements involved in flying cars, the greater the development resistance. Whether it's XPeng Aero, EHang, or other star enterprises, it will take time to truly transition from initial production to deep ecological operations. Today's pioneers are still awaiting broader societal recognition.

Source: Songguo Finance and Economics