Chinese Tesla rival Xiaopeng wants to sell half of its cars overseas

Read Time:2 Minute, 51 Second

When speaking to the media at the 2020 Beijing Auto Show, Xiaopeng CEO He Xiaopeng stood beside the company’s P7 electric car.

Eve Zheng | NBC Finance Channel

BEIJING – Xiaopeng Motors, a Chinese electric car start-up, plans to become a global automaker. Its vice president and chairman Gu Laien said on Wednesday that half of its cars are delivered to countries outside of China.

“As a company focused on global opportunities, in the long run, we want to maintain a balance with our delivery contributions-half from China and half from outside China -” Gu said in an exclusive interview with CNBC’s Arjun Kharpal. Asia. “

Gu did not provide a specific time frame for achieving this goal.

In contrast, US-based Tesla said in the third quarter that its domestic market accounted for 46.6% of total sales.

China accounts for 22.6% of Tesla’s total sales, up from less than 20% a year ago. Elon Musk’s automaker has opened a factory in Shanghai and will begin delivering locally-made cars before the pandemic begins in January 2020.

Gu said that Guangzhou-based Xiaopeng Motors will increase investment in the international market this year and next, and is expected to enter Sweden, Denmark and the Netherlands next year.

Xiaopeng Motors started shipping cars to Norway in December 2020. Other Chinese automakers have focused their initial overseas expansion on the country, where government incentives support local demand for electric vehicles.

A Chinese start-up listed in the United States, NIO, opened a flagship store in Oslo and began delivering cars there in September.

With the support of American billionaire Warren Buffett, BYD began shipping electric vehicles to Norway this summer, and plans to deliver 1,500 vehicles there by the end of this year. Last week, BYD said that after similar expansions to Brazil, Mexico, Colombia, Uruguay, Costa Rica and the Bahamas in October, it began delivering products to the Dominican Republic.

Profitability remains elusive

After the US-listed Xiaopeng Motors announced its third-quarter revenue of more than 5.72 billion yuan (887.7 million US dollars), its stock price rose by more than 8% overnight. According to StreetAccount, this exceeded expectations of 5.03 billion yuan.

However, according to StreetAccount data, the startup reported a loss of 1.77 yuan (27 cents) per share, which was higher than expected, compared to expectations of 1.17 yuan.

Gu said on Wednesday that he expects the automaker to break even within two years.

Read more about electric vehicles from CNBC Pro

At the end of 2019, before the coronavirus pandemic and subsequent chip shortages, Gu told CNBC that he expected to break even in about two to three years-if the company could produce 150,000 cars per year.

Xiaopeng Motors said last month that since its establishment six years ago, it has produced more than 100,000 vehicles in total.

The company launched its first commercial vehicle, the G3 SUV, in December 2018. But according to Gu, the P7 sedans delivered last summer have proven to be more popular, accounting for more than 77% of deliveries.

Xiaopeng Automobile started to deliver the third electric model P5 sedan in October. Last week, the start-up company released a new electric SUV G9, which Xiaopeng Motors said was designed for the international and Chinese markets.

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