Chinese luxury EV maker Xpeng reported a 24% year-over-year increase in deliveries for June, reaching a total of 10,688 units. This number also represented a 5% increase compared to the previous month, with the X9 multi-purpose vehicle driving sales. Despite this growth, Xpeng continues to lag behind competitors like Li Auto and Nio. Li Auto delivered 47,774 vehicles in June, a 46.7% increase from the previous year, while Nio delivered 21,209 vehicles, a 98% year-over-year increase. Xpeng’s stock has experienced fluctuations, with an 80% decline from early 2021 to around $8 currently, underperforming the S&P 500.
The Trefis High Quality Portfolio, consisting of 30 stocks, has consistently outperformed the S&P 500 over the same period. Xpeng’s financial metrics have shown improvement, with average revenue per vehicle increasing to $42,000 in Q1 2024 from $28,000 in the year-ago quarter. Gross margins have also improved to 13% from under 3% in the year-ago quarter, attributed to higher sales of technical services in collaboration with the Volkswagen Group. Xpeng’s self-driving software adoption is rising, with an 84% penetration rate for driving assistance tools in urban scenarios in June. A major upgrade to its in-car operating system is planned for Q3 to enhance competitiveness.
Xpeng’s future plans include launching more than 10 new models over the next three years and partnering with Volkswagen to co-develop VW-branded EVs. The company aims to expand beyond the luxury market to target mass-market models, with the introduction of a new sub-brand called Mona offering vehicles priced under $21,000. This move will position Xpeng to compete with larger volumes in the mass market, challenging rivals like BYD. For a detailed comparison of Chinese EV stocks, including Xpeng, Li Auto, and Nio, investors can refer to Trefis’ analysis.
In summary, despite Xpeng’s recent growth in deliveries and improvements in financial metrics, the company continues to face challenges in outperforming competitors and the overall market. The uncertain macroeconomic environment, including high oil prices and elevated interest rates, could impact Xpeng’s performance in the coming months. However, with strategic partnerships, new model launches, and technology upgrades planned, Xpeng remains focused on expanding its market reach and enhancing competitiveness in the evolving EV industry. Investors may want to keep a close watch on Xpeng’s progress and developments to assess its potential for future growth and success in the market.
