China EV war: Xpeng expects sales to rev up as it snaps at Tesla’s heels on the mainland
- Guangzhou-based carmaker expects to deliver between 24,362 and 26,362 vehicles in the final two months of the year
- EV start-up, however, reports mounting losses in the third quarter to US$248.8 million, up from US$180 million a year ago
The Guangzhou-based carmaker backed by e-commerce giant Alibaba Group Holding, which also owns the South China Morning Post, and smartphone maker Xiaomi, said in its earnings report that it would deliver between 24,362 and 26,362 vehicles in November and December, following strong sales in the previous two months.
Net loss in the third quarter widened to 1.59 billion yuan (US$248.8 million), from 1.15 billion yuan a year ago because of higher marketing costs, the carmaker said.
“It will be interesting to watch if a domestic carmaker can truly become a Tesla rival in terms of sales,” said Eric Han, a senior manager with Shanghai-based business advisory Suolei. “Then the competition for a leading position in China’s smart EV market will escalate.”
Xpeng, along with Shanghai-based NIO and Beijing-headquartered Li Auto, are dubbed the three Chinese challengers to Tesla. They all develop intelligent EVs with advanced driver assistance systems, sophisticated in-car entertainment systems and high-performance batteries that ensure long driving range on a single charge.
Xpeng powered ahead of its two domestic rivals over the last two months, with monthly deliveries exceeding 10,000 units in September and October. An accelerated pace of electrification in mainland China has fuelled EV sales.
On the mainland, deliveries of 10,000 cars a month is seen as an important threshold for defining a powerful carmaker.
Xpeng reported a 187 per cent year on year jump in revenue to 5.72 billion yuan for the three months ended September 30, higher than analysts’ median estimate of 5.21 billion yuan tracked by Bloomberg.
The company said its vehicle margin in the third quarter increased to 13.6 per cent, from 11 per cent in the previous quarter.
In July, Xpeng raised HK$14 billion (US$1.8 billion) in a second primary listing in Hong Kong, less than 12 months after a US$1.72 billion initial public offering and a US$2.48 billion top-up sale in New York.
02:18
Chinese XPeng electric car can drive and park by itself
Teresio Gigi Gaudio, founder and chief executive of Italian automotive design group Icona, told reporters on a video conference during the China International Import Expo in Shanghai on November 7 that some problems have to be addressed before autonomous driving can go mainstream and this would require huge investments.
“Human beings are afraid to give control to intelligent robots, and there is a lot to be done to convince people that such systems are reliable,” Gaudio said.
Xpeng, which began selling the P5, the world’s first lidar-guided EV in September, said that the new model had a strong order backlog.
Last week, the company unveiled its fourth model, the G9 SUV, at the Guangzhou International Automobile Exhibition, which will be equipped with a semi-autonomous driving system.
