Shares of the Chinese electric car company rose 13% in pre-market trading on Thursday post the announcement of its third-quarter earnings report. The company had gone public in August this year. Even though the reports revealed mixed numbers with a third-quarter net loss of 864.9 million RMB compares to 750 million RMB last year, investors are optimistic as they observe the increasing delivery growth. Xpeng’s revenue soared by 342.5% reaching 1,990.1 million RMB with the gross margin rising to 4.6% from -10.1% last year.
With the September-ending quarter, vehicle deliveries rose to 8,578, 266% more than last year, and 166% more than the second quarter of 2020. The company’s rival model for the made-in-China Tesla model 3, the P7 sedan, hit deliveries of 6,210 compared to 325 in quarter 2 of 2020.
Bank of America backed a buy rating on Xpeng stock on Wednesday, increasing its price target to 36.20.
Instead of manufacturing its own batteries like Tesla and General Motors, Xpeng collaborates with external industry leaders. Xpeng has launched two models in the Chinese electric car market so far which have received amazing reviews. Another model is set to be released in 2021 with upgrades in technology.
For the fourth quarter, Xpeng expects the deliveries of vehicles to rise to 10,000, more than 211% year-over-year as compared to last year. Revenue will hit 2.2 billion RMB, up by 243.7% from last year. The company has not released any estimates about its profit for the quarter, but it will most likely be a loss since Xpeng continues to invest in manufacturing and R&D.
Xpeng’s Vice President and Chairman Brian Gu said that Tesla’s rise in the country and the Chinese government’s encouragement to customers to buy electric vehicles to control pollution, is helping Xpeng.
Various other electric car stocks also rose early Thursday with Tesla surging 0.3%, Nio jumping 8.5%, and Kandi Technologies climbing 5.6%.