Chinese electric car company Xpeng has recently seen a significant increase in its shares following the announcement of an improvement in its profit margin. The company’s Hong Kong-listed shares rose more than 13% in morning trade on Wednesday, with U.S.-listed shares also climbing by nearly 6% after reporting first quarter results. Xpeng reported a 5.5% increase in vehicle margin in the first quarter, a stark improvement from the negative 2.5% margin in the previous quarter. The rise in margin indicates a higher level of profitability for the company in terms of car sales.
Xpeng has also provided an upbeat outlook for second-quarter deliveries, forecasting a year-on-year increase of at least 25%. The company aims to deliver between 29,000 to 32,000 cars in the second quarter, building on its delivery of 21,821 cars in the first quarter and 9,393 cars in April. This positive forecast has garnered attention from analysts, with Nomura analysts reviewing their estimates for Xpeng in light of the company’s recent performance. Despite the competitive nature of the electric vehicle market in China, Xpeng is pushing forward with its business plans and is set to launch a new model under the MONA brand next month.
In a bid to stay competitive in the evolving Chinese electric car market, Xpeng is expanding its product lineup with a lower-cost vehicle brand called Mona. The first Mona car, an electric sedan priced below 200,000 yuan ($27,890), is scheduled for release in June and mass deliveries are expected to begin in the third quarter. Xpeng’s partnership with German automaker Volkswagen has attributed several hundred million yuan in services revenue to the company, with the services segment overall seeing a 93.1% surge year-on-year to 1 billion yuan in the first quarter.
Xpeng is not only focusing on the domestic market but also on expanding its presence globally. The company is establishing partnerships with auto dealership groups in Western Europe, Southeast Asia, the Middle East, and Australia to open new stores. Xpeng plans to expand its sales network to more than 20 countries in the near future, showcasing its ambition to become a key player in the global electric car market. The company’s strategic partnerships and expansion plans highlight its commitment to growth and innovation in the evolving automotive industry.
Xpeng’s recent performance, profit margin improvement, and optimistic delivery outlook have positioned the company for future success in the competitive electric car market. With a focus on expanding its product lineup, establishing key partnerships, and entering new markets, Xpeng is set to shape the future of electric mobility. Investors and industry observers alike will be closely monitoring Xpeng’s developments to see how the company continues to forge ahead in the ever-evolving automotive landscape.