What's going on?
Xpeng reported a mixed set of results on Tuesday, but the Chinese electric vehicle (EV) maker has a crack team of engineers working round the clock to nail it next time.
What does this mean?
Xpeng delivered more than 25,000 cars last quarter – a record high and nearly three times as many as the same time in 2020. That drove revenue up by a much better-than-expected 187% compared to the same time last year. But it had plenty of outgoings too: the company’s been spending big on developing new cars, as well as on self-driving tech that’ll allow it to build robotaxis down the line. So it follows that the company’s research and development costs were twice what they were in the third quarter of last year, and that the company made a bigger-than-expected loss. Still, the company sees that as a necessary bump on the road to glory: Xpeng said it’s expecting to break delivery records this quarter too.
Why should I care?
The bigger picture: This is a big pond.
China’s the biggest EV market in the world, and it’s growing at a rate of knots: EV sales in the country are on track to hit 3 million by the end of the year – more than double last year’s total. And while there is a lot of competition from the likes of Tesla, NIO, and Li Auto, the market’s so big that Xpeng shouldn’t have any problem growing its sales for the foreseeable future.
Zooming out: Feel the power.
It’s not just the carmakers having all the fun: CATL – the world’s biggest manufacturer of EV batteries – became China’s second-biggest domestically listed company by market value earlier this week, having seen its share price more than double over the last year. And that might just be the start: the US government’s next spending proposal includes tax incentives for EV buyers, and it could boost demand for CATL’s batteries even more.