Xpeng hopes its new vehicle will help improve the company’s losses even as it posted a return to quarterly growth in deliveries.
Shares of Chinese electric car maker Xpeng Motors (NYSE: XPEV) rose Following the company’s report on vehicle deliveries, showing a quarterly return to growth. XPEV rose 11% in response to the growth news, after declining continuously for more than a year.
According to MarketWatch data, US-listed Xpeng shares are up 42.84% in the past five days and 71.73% in the month. Shares have also seen an increase of 31.92% in 3 months and nearly 46% year-to-date. However, its one-year performance shows a decline of 52%.
On Saturday, Xpeng revealed a 27% quarter-on-quarter increase in car deliveries for the second quarter of the year, totaling 23,205 vehicles. The figure is higher than the company’s forecast set in May – to deliver between 21,000 and 22,000 cars.
Xpeng said it delivered 8,620 vehicles in June, up 15% from May. June’s number is the highest of the year so far.
Xpeng launched its new G6 Ultra Smart Coupe SUV at the end of the second quarter and expects deliveries to begin soon. The company hopes the sales will help consolidate some of its losses.
Xpeng shares and deliveries in the first quarter
Xpeng stock fell in May after the company released first-quarter earnings and modest delivery expectations. The company reported that its revenue in the first quarter was down 50% year-over-year. Xpeng’s income was 4.03 billion yuan, about $571.6 million at the time, far below analysts’ expectations of 5.19 billion yuan. The electric vehicle manufacturer also reported an expected net loss of 2.34 billion yuan, up 18% from the expected 1.9 billion.
At that time, Chairman and CEO Xe Xiaopeng said that he had made some crucial changes to the company’s organizational structure, senior management team, and strategy. He expressed confidence in the changes, noting that they will drive growth in product sales, customer satisfaction, team morale, and brand reputation.
Since the first quarter of 2022, Xpeng has experienced drops in deliveries each quarter. Much of the company’s poor performance results from macroeconomic headwinds in China. The company is experiencing mixed consumer spending as the economy recovers from the effects of COVID-19 restrictions.
Competition from electric vehicle manufacturers
Xpeng also faces fierce competition from other electric vehicle makers, including Tesla (NASDAQ:TSLA) and BYD. Last October, Tesla lowered the prices of its Model 3 sedan and Model Y SUV in China. The company said at the time that it had lowered prices because it had raised them earlier after the cost of raw materials rose.
In January this year, Tesla announced further discounts in China for both cars amid increased competition. The company then announced a price cut in the US in March and another cut in April. However, in early May, Tesla raised the prices of its Model S and Model X cars by 19,000 yuan, about $2,751.
In June, electric vehicle maker Nio slashed prices by about $4,200 even though CEO William Lee claimed the company would not join a “price war.”
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Tolu is a cryptocurrency and blockchain enthusiast based in Lagos. He likes to demystify cryptocurrency stories down to the bare essentials so that anyone anywhere can understand without much background knowledge. When he’s not deep into cryptocurrency stories, Tolo enjoys music, loves to sing, and is a movie lover.
