Amidst what was a relatively quiet day in the markets, some of the biggest winners happened to be foreign companies listed on U.S. exchanges. In particular, Chinese electric vehicle companies aiming to compete against the likes of Tesla (NASDAQ: TSLA) were up substantially on Thursday. One of them is XPeng (NYSE: XPEV), a $30 billion market cap Chinese electric car maker whose stock jumped by around 33.5% this morning after releasing its third-quarter financial results.
While the company is still reporting a loss of around $169.2 million, that’s more than offset by the fact that revenue is up by over 300%. Car deliveries jumped by 270% in comparison to last year as well, with the company reporting that total car deliveries had reached 7,578 for this quarter. Monthly deliveries for the month of October were up to 3,040, while fourth-quarter deliveries are expected to rise to around 10,000, according to XPeng’s internal estimates.
“The robust results we achieved in the third quarter, from delivery numbers, production ramp-up, and advancement in R&D, to expansion plans for the new factory and overseas business, reflect the strong market appeal of our products, the resonance of our strategy, and our ability to adeptly execute our operational plan,” said XPeng’s President, Dr. Brian Gu.
While this is a far cry from the numbers that Tesla is reporting, its pretty good growth considering how young the company is. To put it into perspective, XPeng only went public on the NYSE this August. Since then, however, shares have risen from just $0.40 from its first day of trading all the way to just under $45 per share, a 100-fold increase as excited investors jumped on the company.
When it comes to the electric vehicle market, growth is seen as more important than profitability, as Tesla’s success story proved to the world. As such, even if these smaller, niche EV makers fail to post a profit for many years to come, as long as their revenue continues growing, their share prices will continue to skyrocket.
Other Chinese EV makers are up as well by association. Nio (NASDAQ: NIO) is up around 17% right now as well. Despite the fact that there was little other noteworthy news for the company, it seems that investors are using whatever excuse they can to jump on Nio. Over the past few months, the Chinese EV maker has been one of the most volatile stocks on the market.
Most analysts covering either of these two companies are optimistic not just for these specific businesses but also for the overall industry as well. Chinese demand for electric vehicles is projected to skyrocket in the coming years. A rising tide lifts all ships, and this trend is expected to do wonders for both large and small electric vehicle manufacturers alike.
XPeng Company Profile
XPeng Inc is a Smart Electric Vehicle company designing, developing, manufacturing and marketing smart electric vehicles in China. The company manufactures environmentally friendly vehicles, namely an SUV (the G3) and a four-door sports sedan (the P7). It targets the mid- to high-end segment in China’s passenger vehicle market. – Warrior Trading News
