Xpeng (XPEV) looks to still be electrifying investors hot off a well-received August IPO.
Shares of the Chinese electric car maker surged 13% in pre-market trading Thursday following its first earnings report as a public company. The market appears to be putting aside widening third quarter net losses (864.9 million RMB loss versus $750 million RMB loss last year) for the upstart and focusing in on robust delivery growth of 265.8% year-over-year to 8,578 vehicles. Xpeng also saw total revenue rise 342.5% from last year to 1,990.1 million RMB ($293.1 million) as the electric car market in China has remained on an upswing.
“We’re very happy with both the delivery results as well as our financial revenue growth, but more importantly this quarter we also achieved our first ever positive gross margin for the company so I think all very exciting,“ Xpeng Vice President and Chairman Brian Gu told Yahoo Finance Live. Gu also added that Tesla’s rise in the country and the Chinese government incentivizing consumers to buy EVs to reduce pollution is helping Xpeng.
The growth in deliveries and bullish market reaction (the stock is now up more than 70% since the IPO) is likely to bring greater attention to what the Tesla rival does.
Xpeng doesn’t make its own batteries like GM (GM) or Tesla (TSLA), instead partnering with outside industry leaders. But it’s no EV slouch in its own right. The EV maker has two models in the Chinese electric car market that have launched to critical acclaim for its snazzy infotainment systems and autonomous technology. It has another model on the way in 2021 and more upgrades for its autonomous driving technology.
The company’s guidance suggests it’s banking on its new products being well-received and the Chinese car market staying electric.
Xpeng sees fourth quarter deliveries rising 210.8% year-over-year to 10,000 vehicles. Revenues are expected to increase 243.7% from a year ago. The company didn’t provide bottom line estimates for the quarter, but will likely post another net loss as it ramps up manufacturing and invests in R&D.
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