Shares of Chinese Tesla rival Xpeng rocket 11% as EV deliveries return to growth

Shares of Xpeng surged in pre-market trade in the U.S. after the Chinese electric vehicle maker reported a quarterly return to growth for car deliveries, following more than a year of declines.

Xpeng on Saturday said it delivered 23,205 cars in the second quarter of 2023, logging a 27% quarter-on-quarter rise. This surpassed the company’s own delivery forecast of between 21,000 and 22,000 units. That was still lower than the 34,422 cars delivered in the second quarter of last year.

U.S.-listed shares of Xpeng surged more than 11% in pre-market trade before paring some of those gains.

Deliveries have been declining each quarter since the first quarter of 2022 for Xpeng, as it struggled with a tough macroeconomic environment in China and heightened competition from domestic rivals and from Tesla, which has been cutting prices in China to spur demand. That has also hurt Xpeng’s competitiveness.

Tesla’s strategy seems to be working with the company reporting global vehicles deliveries of 466,140 in the second quarter, beating analysts expectations.

Xpeng said deliveries in June alone totalled 8,620 cars, marking a 15% increase over May and the highest monthly delivery figure this year.

The Guangzhou, China-headquartered company said deliveries of its flagship P7 sedan rose 17% in June from May, but did not give a specific unit figure.

Xpeng’s latest car — the G6 Ultra Smart Coupe SUV — was launched at the end of the second quarter, with deliveries beginning this month. Xpeng is hoping this will boost sales in the coming quarters.

Xpeng’s losses continue to widen and competition is getting fiercer. Last month, Chinese EV start-up Nio made big price cuts to its cars.

Xpeng has been reorganizing its management structure and overhauling the company over the past few months in the hope of unlocking growth.

Some of the company’s rivals have fared better. Li Auto delivered 32,575 vehicles in June while its second quarter figures totaled 86,533. Nio meanwhile delivered 10,707 vehicles in June and 23,520 cars in the second quarter, not far ahead of Xpeng.

Meanwhile, Warren Buffett-backed automaker BYD delivered 253,046 new energy vehicles — which includes battery and plug-in hybrids — in June alone, representing a 96% year-on-year rise.