A Chinese start-up is developing an electric vehicle. Vice president and chairman Brian Gu said Wednesday that Xpeng intends to become a global carmaker, with half of its vehicle deliveries going to nations outside of China. In an exclusive interview with CNBC’s Arjun Kharpal on “Squawk Box Asia,” Gu said, “As a firm that focuses on global prospects, we want to be balanced with our contribution of delivery — half from China, half from outside China — in the long run.”
Gu did not specify a timeline for reaching that objective. Tesla, for example, said that its home market accounted for 46.6 percent of total sales in the third quarter. China accounted for 22.6 percent of Tesla’s total sales in 2018, up from just under 20% a year ago. Just before the epidemic began in January 2020, Elon Musk’s firm constructed a facility in Shanghai and began delivering locally made automobiles.
Gu stated that Xpeng, based in Guangzhou, will invest more in overseas markets this year and next year, with plans to penetrate Sweden, Denmark, and the Netherlands. In December 2020, Xpeng began shipping automobiles to Norway.
Other Chinese manufacturers have focused their early global growth on the country, where local demand for electric vehicles has been bolstered by government incentives.
A Chinese start-up that is publicly traded in the United States In September, Nio launched a flagship store in Oslo and began local automobile deliveries. BYD, which is sponsored by Warren Buffett, started shipping electric cars to Norway this summer and plans to deliver 1,500 vehicles by the end of the year. BYD announced this week that it has begun shipping to the Dominican Republic, following a similar expansion in October to Brazil, Mexico, Colombia, Uruguay, Costa Rica, and the Bahamas.
Profitability still elusive
Xpeng’s stock jumped more than 8% overnight after the business posted a higher-than-expected third-quarter sales of 5.72 billion yuan ($887.7 million). According to StreetAccount, this exceeded projections of 5.03 billion yuan. According to StreetAccount, the start-up posted a higher-than-expected loss of 1.77 yuan (27 cents) per share, versus forecasts of a loss of 1.17 yuan.
Gu stated on Wednesday that he believes the manufacturer would break even in two years. Before the coronavirus epidemic and the resulting chip scarcity, Gu told CNBC in late 2019 that he planned to break even in two or three years if the company could make 150,000 cars per year. Xpeng announced this month that since its start six years ago, it has built slightly over 100,000 cars.
The G3 SUV, the company’s first commercially available car, was released in December 2018. According to Gu, the P7 sedan, which began sales last summer, has proven to be significantly more popular, accounting for more than 77 percent of deliveries. In October, Xpeng began shipping its third electric vehicle, the P5 sedan. Last week, the start-up unveiled the G9, an electric SUV aimed at both international and Chinese markets, according to Xpeng.