The CEA electronic and electrical architecture was jointly developed. Cooperation between the two parties deepened, and the H share “purchase” rating was maintained. On April 17, the company and Volkswagen Group signed a strategic cooperation framework agreement on electronic and electrical architecture technology. The two sides will further expand cooperation to jointly develop a high-performance electronic and electrical architecture CEA based on regional control and quasi-central computing. In 24 years, Xiaopeng's product matrix was gradually improved, and in-depth cooperation with Didi and Volkswagen continued to deepen. XNGP is progressing smoothly, and marketing and management efficiency is improving at an accelerated pace. We estimate that the company's total vehicle sales volume will be 24/36/460,000 units in 24-26, with an estimated revenue of 603/852/103.3 billion yuan in 24-26. We used segmented valuation, gave Xiaopeng Motor's sales business 1.3 x 2024EPS, gave a technical service-related business a valuation of HK$35 billion, and fine-tuned the company's target price to HK$64.30 (previous value: HK$64.38) to maintain a “buy” rating.
Volkswagen's strategic cooperation continues to deepen. The company has strong intelligence. Up to now, Xiaopeng and Volkswagen have carried out 3 major collaborations: 1) In July 23, Volkswagen and Xiaopeng reached a strategic cooperation framework agreement, and Volkswagen also acquired 4.99% of Xiaopeng's shares (completed in December 23); 2) In February '24, the two sides signed a joint platform and software strategic technical cooperation development agreement, mainly involving supply chain, joint procurement and cost reduction; 3) In April 24, the cooperation involved a deeper level of vehicle manufacturing:
Electronic and electrical architecture. The company independently developed the industry-leading electronic and electrical architecture X-EEA, which is the core technology for vertically integrating software and hardware. Thanks to this, software such as Xiaopeng XNGP intelligent driving assistance software and connected vehicle operating systems can be decoupled from the underlying hardware and vehicle platform to achieve rapid cross-platform software iteration.
Software and hardware decoupling and rapid OTA iteration capabilities are the core competitive advantages of Xiaopeng's electronic and electrical architecture. This in-depth cooperation with Volkswagen shows that Xiaopeng's intelligent strength has been recognized by world-renowned car companies.
The new architecture is integrated into the CMP platform to achieve significant technology cost reduction
Through the CEA (China Electrical Architecture) architecture, Volkswagen's digital intelligence architecture for models produced in China will achieve a higher degree of standardization. It is expected to launch the first CMP platform developed by Volkswagen Group for the local Chinese market, covering 4 Volkswagen brand compact pure electric models. Compared with the MEB platform, the CMP platform is based on regional control and quasi-central computing. The number of in-vehicle controllers is drastically reduced by 30%, further reducing system complexity, and the target cost is reduced by 40%. After the new architecture is enabled, higher cost efficiency can be achieved. We expect the CEA architecture to strengthen the intelligent competitiveness of the two B-Class models jointly developed by the two parties.
The CMP platform model will be launched in '26, and the deep integration of technology will achieve a win-win CEA R&D team composed of technical experts from Xiaopeng Motors, Volkswagen (China) Technology Co., Ltd. (VCTC), and CARIAD China. The joint team's development is software-oriented, focusing on autonomous driving and intelligent connectivity. Volkswagen expects VCTC to have more than 3,000 R&D and procurement experts participating in the development of new models by the end of 24, with the goal of shortening the development cycle by 30%, and models developed on the CMP platform to enter the market in 2026. We believe that this cooperation marks a deep integration in the field of electric vehicles, which will improve Xiaopeng Motor's technical level and accelerate the Volkswagen Group's intelligent connected vehicle layout.
Risk warning: Consumer demand falls short of expectations, supply chain shortages, company product releases and orders fall short of expectations.