Fresh Start

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What's going on?

Xpeng reported strong quarterly results on Thursday, and the Chinese automaker is hoping drivers never have their fill of that new electric car smell.

What does this mean?

Investors came into this update already aware that Xpeng – one of three US-listed Chinese electric carmakers – delivered more than 13,000 electric vehicles (EVs) last quarter. That ticked off a laundry list of achievements: it was a company record, a 3% uptick from the quarter before, and five times more than the same time a year before. So it wasn’t exactly a surprise when Xpeng posted a third-straight quarterly increase in sales on Thursday. What was a surprise was its smaller-than-expected loss, as well as the more-than 600% leap in revenue from the same time last year.

 

Why should I care?

The bigger picture: China’s EV market is cutthroat. 


EVs are booming in China, even if the country did have to hand over its title of world’s biggest EV market to Europe last year. So it must’ve come as a disappointment to Tesla to see that it suffered a serious drop-off in sales last month, according to new data from Chinese authorities. That must be especially annoying considering its rivals didn’t, and the cars it did produce were mostly shipped overseas – both of which raise questions about how much the country really wants them. And as Chinese tech giants spend big on carving out space for themselves, this battlefield’s only going to get more brutal.



Zooming out: The battle isn’t just for customers, it’s for materials too. 


Cobalt is a key material used in the lithium batteries for EVs, and China has managed to get its hands on long-term supply agreements with DR Congo, the biggest producer of the metal. But the US and Europe haven’t, and mining giant Glencore has warned that it could leave Western carmakers lagging a long way behind their Chinese counterparts.

Originally posted as part of the Finimize daily email.

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