Xpeng is hoping that its new car would help improve the company’s losses even as it has recorded a return to quarterly growth in deliveries.
Shares of Chinese electric vehicle (EV) maker Xpeng Motors (NYSE: XPEV) rose following the company’s report of car deliveries, signifying a quarterly return to growth. XPEV climbed 11% in response to the news of growth, after continuous declines for over a year.
According to data from MarketWatch, Xpeng shares listed in the US have climbed 42.84% over the last five days and 71.73% in a month. The shares have also seen a 31.92% increase in 3 months and nearly 46% year-to-date (YTD). However, its 1-year performance shows a 52% plunge.
On Saturday, Xpeng revealed a 27% quarterly increase in car deliveries for the year’s second quarter, at a total of 23,205. 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 cars in June, a 15% increase from May. June’s figure is the year’s highest so far.
Xpeng launched its new G6 Ultra Smart Coupe SUV at the end of Q2 and expects deliveries to begin soon. The company hopes that sales would help shore up some of its losses.
Xpeng Shares and Deliveries in Q1
Xpeng stock fell in May after the company released Q1 earnings and a modest forecast for deliveries. The company reported that its Q1 revenue fell 50% year-over-year (YoY). Xpeng’s income was 4.03 billion Chinese yuan, about $571.6 million at the time, much lower than analysts’ expectation of 5.19 billion yuan. The EV maker also reported its expected net loss was 2.34 billion yuan, more than 18% higher than the expected 1.9 billion.
At the time, Chairman and CEO Xe Xiaopeng said he made a few decisive changes to the company’s organizational structure, senior management team, and strategy. He expressed confidence in the changes, stating they would drive product sales growth, customer satisfaction, team morale, and brand reputation.
Since the first quarter of 2022, Xpeng has suffered declines in deliveries each quarter. A lot of the company’s poor performance results from macroeconomic headwinds in China. The company is suffering mixed consumer spending because of an economy recovering from the effects of COVID-19 restrictions.
Competition from EV Manufacturers
Xpeng is also facing fierce competition from other EV makers, including Tesla (NASDAQ: TSLA) and BYD. Last October, Tesla cut prices for its Model 3 sedan and Model Y SUV in China. At the time, the company said it cut prices because it had earlier increased them following a rise in the cost of raw materials.
In January this year, Tesla announced further price reductions in China for both cars amid growing competition. The company then announced a price cut in the US in March and a further reduction in April. However, in early May, Tesla hiked prices for its Model S and Model X vehicles by 19,000 yuan, about $2,751.
In June, EV maker Nio cut prices by nearly $4,200 even though CEO William Li claimed the company would not join a “price war”.
Tolu is a cryptocurrency and blockchain enthusiast based in Lagos. He likes to demystify crypto stories to the bare basics so that anyone anywhere can understand without too much background knowledge.
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