Tesla’s Chinese competitor Xpeng wants to sell half of its vehicles overseas

BEIJING – Chinese electric vehicle startup Xpeng is set to become a global automaker with half of its car shipments going to countries outside of China, vice president and chairman of the board Brian Gu said Wednesday.

“As a company that focuses on global opportunities, we want to be balanced with our contribution to supply – half from China, half from outside China – in the long term,” Gu told CNBC in an exclusive interview with Arjun Harpal on Squawk Box. Asia “.

Gu did not specify a specific timeline for achieving this goal.

By comparison, US company Tesla said in the third quarter that its domestic market accounted for 46.6% of total sales.

China accounted for 22.6% of Tesla’s total sales, up from just under 20% a year ago. Carmaker Elona Musk opened a plant in Shanghai and began shipping locally made cars shortly before the pandemic began in January 2020.

Gu said Guangzhou-based Xpeng will invest more in international markets this year and next, and plans to expand into Sweden, Denmark and the Netherlands next year.

Xpeng began delivering vehicles to Norway in December 2020. Other Chinese automakers have focused their initial overseas expansion on the country, where government incentives have supported local demand for electric vehicles.

US-registered Chinese startup Nio opened a flagship store in Oslo and began shipping locally in September.

BYD, backed by American billionaire Warren Buffett, began shipping EVs to Norway this summer and plans to deliver 1,500 cars there by the end of the year. BYD said last week that it began deliveries to the Dominican Republic after similar expansion to Brazil, Mexico, Colombia, Uruguay, Costa Rica and the Bahamas in October.

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Profitability is still out of reach

Xpeng, a U.S.-listed stock, gained more than 8% overnight after the company reported improved third-quarter revenue to 5.72 billion yuan ($ 887.7 million). According to StreetAccount, this exceeded expectations of 5.03 billion yuan.

However, according to StreetAccount, the startup reported a larger-than-expected loss of 1.77 yuan (27 cents) per share against expectations of a loss of 1.17 yuan.

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

In late 2019, ahead of the coronavirus pandemic and its associated chip shortage, Gu told CNBC that he expects break even in about two or three years – if the company can produce 150,000 vehicles a year.

Xpeng said last month that it has produced a total of just over 100,000 vehicles since it was founded six years ago.

The company launched its first commercially available vehicle, the G3 SUV, in December 2018. But the P7 sedan, which began deliveries last summer, has proven much more popular and, according to Gu, accounts for more than 77% of deliveries.

Xpeng began shipping its third electric model, the P5 sedan, in October. Last week, the startup unveiled the new G9 electric SUV, which Xpeng says is targeted at the international and Chinese markets.

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