Xpeng Motors has intensified its restructuring efforts by setting up a new financial platform to control costs and streamline the company’s workflow, according to an internal memo obtained by Chinese media Dianchang (Powerhouse).
Why it matters: The cross-functional financial platform is the latest in a series of restructuring actions undertaken by Xpeng to get its business back on track, after it faced declining sales and slimming margins in recent months due to rising costs and competition.
Details: Xpeng has set up a number of financial units under the new scheme, including two teams to implement specific cost-saving measures with its sales and marketing operations and research and development units, according to the report.
- The new teams will allow chief executive He Xiaopeng to take back control of the company’s finances that he previously handed to management executives, such as budget planning for supply chain and technology development.
- The EV maker has also established several teams dedicated to asset management, tax administration, and business analysis to enhance its expense control, make more accurate cost estimates, and improve compliance practices.
Context: Xpeng has unveiled organizational changes that include setting up a number of committees for corporate strategy, product planning, and technology road mapping in the past few months, following criticism about the pricing and specs of its new premium crossover G9.
- With around RMB 40 billion ($5.74 billion) in cash on Xpeng’s balance sheet, CEO He told investors on Nov. 30 that the company still has enough capital to support its business growth for the coming years.
- The EV maker has recorded losses of nearly RMB 6.8 billion for the first three quarters of 2022, while annual revenue growth has slowed from 152.6% to 19.3% during the same period.