Shares for China-based electric vehicle manufacturer Xpeng reportedly saw a 13% increase after the EV giant reported positive growth for its profits and vehicle deliveries in the upcoming months.
As per NBC, Wednesday morning trading saw a more than 13% increase in the company's Hong Kong-listed shares. Following the release of first-quarter data, US-listed shares saw a roughly 6% increase in trading on Tuesday.
According to Xpeng, vehicle margin increased from negative 2.5% in the previous quarter to 5.5% in the first three months of the year. Vehicle margin is a measure of profitability; the bigger the margin, the more money the business makes on the sale of cars.
The business predicted 29,000 to 32,000 cars would be delivered in the second quarter, representing a minimum 25% rise in sales year over year. Xpeng delivered 9,393 automobiles in April and 21,821 cars in the first quarter of the year.
With its cooperation with German automaker Volkswagen, Xpeng could credit several hundred million yuan in services income. At 1 billion yuan in the first quarter, the services segment grew by 93.1% year over year.
The Chinese business announced that it is forming joint ventures with car dealership companies in Australia, Southeast Asia, the Middle East, and Western Europe to launch new outlets in the first half of this year.
Xpeng mentioned that it intends to reach over 20 nations with its sales network expansion. This is based on a FactSet transcript of the company's first-quarter results call.
Chinese EVs vs US Models
Chinese EVs continue to compete in the industry with several companies already introducing models meant to directly rival US models. Recently, China's Nio unveiled the first EV under its more affordable Onvo brand, called the L60 SUV. It is expected to be more affordable than both the Tesla Model Y and the Toyota RAV4.
At 219,900 yuan ($30,465, £23,990), the beginning price of the world's most popular electric car (EV), Tesla's Model Y, is more than 10% more expensive than the L60 SUV. In Shanghai, the car was unveiled by Nio CEO William Li.
With the help of the Onvo brand, Nio might be able to expand its business outside of its own country. But it has to contend with 100% US tariffs and an ongoing EU anti-subsidy probe into Chinese EV imports.
Tesla in China
Tesla, however, is still having trouble in China. The US-based EV giant's sales of China-made electric vehicles reportedly fell 18% in April compared to the same month last year, following a 30% decline in sales in March.
Tesla was the second-largest EV seller in April, with BYD being its primary rival. Last month, the Shenzhen-based automaker sold about 330,000 new energy vehicles, which experienced a 49% surge in sales.
Warren Buffett-backed BYD momentarily dethroned Tesla as the global leader in EV sales in the fourth quarter of 2023.
Following an unplanned visit to Beijing last month, Tesla is allegedly attempting to raise its reputation in China by lowering prices and making major advancements toward the full rollout of its self-driving driver assistance technology.
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