The upgrade, which is due to be completed by the end of February, is aimed at preparing for a new model and boosting the plant's capacity.

(Image credit: )

Xpeng (NYSE: XPEV) will upgrade the production lines at one of its two factories, a move that is designed to prepare for a new model but could affect short-term deliveries.

Xpeng has launched an upgrade project at its Zhaoqing plant in Guangdong province, for which it plans to invest more than RMB 100 million ($13.9 million), involving production lines and logistics equipment in the stamping, welding, painting and final assembly workshops, according to a statement today.

The work will last about 20 days, with all the renovation projects expected to be completed by February 9, and the overall production line commissioning completed by the end of February.

The upgrade is aimed at preparing for the launch of a new model and boosting the plant's capacity, according to Xpeng.

Xpeng didn't say how much the plant's capacity will be expanded, but said the new model is expected to go into production within the year.

The plant, which is Xpeng's first, is located in Zhaoqing Hi-Tech Zone and went into production in May 2020.

(Xpeng Zhaoqing plant. Image credit: Xpeng)

Xpeng was founded in 2014 and released its first model, the G3 SUV, in September 2016. The model was initially made by Haima Motor and has been produced by Xpeng's own factory for the past few years.

In August 2021, Xpeng initiated its first major upgrade to its Zhaoqing plant, which increased annual production capacity from 100,000 to 200,000 units.

In addition to the Zhaoqing plant, Xpeng has another plant in Guangzhou, the city where it is headquartered. The plant went into operation in early 2023 and was designed to have an annual capacity of 120,000 vehicles.

Xpeng's current models on sale are the G3i, P5, P7, G9, and X9, the first three of which are produced at the Zhaoqing plant and the last two at the Guangzhou plant.

The company had announced the launch of a plant project in Wuhan, Hubei province in July 2021, but had not released any progress on the plant in the past two years.

By 2025, Xpeng's factories in Zhaoqing and Guangzhou, as well as a number of factories in the planning stage, will be adapted to the SEPA (Smart Electric Platform Architecture) 2.0 architecture, fueling capacity and sales growth, it said today.

SEPA 2.0 is Xpeng's next-generation vehicle technology architecture unveiled in April 2023, and the G6 SUV is the first model to be built on it.

On December 21, local media outlet Jiemian reported that Xpeng plans to discontinue the G3 series of SUVs and may design a new product to replace the line.

Xpeng later confirmed the report, saying it was a decision based on the company's long-term planning, in order to allow it to focus more on advancing its future growth strategy.

Xpeng delivered 20,115 vehicles in December, marking the third consecutive month above the 20,000-unit mark.

However, it and its other major peers entered 2024 with weak deliveries, as China's auto market entered a slow season at the start of the year.

From January 1-21, Xpeng vehicles had 4,600 insured registrations in China, as reported by CnEVPost earlier this week.

Notably, Xpeng's planned production line modifications and commissioning will cover the Chinese New Year holiday, which is typically the slowest time of the year for vehicle sales in the Chinese market.

The upcoming Lunar New Year holiday runs from February 10 to February 18, and February 4 and February 18 will be work days, albeit Sundays.

Xpeng has solid new models pipeline for 2024-2025, says BofA