Chinese EV demand continues to rise, with a strong triple digit gain in November pushing NEV sales to a YTD gain, while sales in traditional vehicles remain down.
CAAM reported that total auto sales rose 12.6% YoY for November, although "sales of new-energy vehicles, the bulk of which are electric cars,
more than doubled to 200,000 units." NEV sales now are showing 3.9% growth YoY to 1.1 million units from January to November, representing the demand resilience from the pandemic-related slump in sales in the beginning of the year, as well as an acceleration of EV adoption as manufacturers continue to ramp up production to meet demand.
XPeng continues to show rapid growth in deliveries through Q4, with
November's 4,224 units delivered representing a
342% growth rate YoY, after the company successfully finished a rapid production of 10,000 units of the P7 (
shown above) in just 160 days by late October. With
October's 3,040 units delivered (for YoY growth of 229%), deliveries for Q4 so far have hit 7,264, just 1,000 shy of Q3's total, as XPeng heads for another very strong quarter of deliveries growth. XPeng has delivered
21,341 units so far this year (87% growth YoY), with December possibly pushing that above 26,000 units.
Q3's deliveries of 8,578 generated
RMB1.99 billion in revenues (USD293 million) due to the sharp rise in deliveries associated with XPeng's successful rapid scalability of manufacturing. Aside from this heavy triple digit revenue growth, XPeng's growth in deliveries (and continual growth through Q4),
has led to positive margins, even though net loss widened a bit to RMB864.9 million. Gross margin rose 1470 bp YoY and 630 bp QoQ to 4.6% while vehicle margin rose 1400 bp YoY and 880 bp QoQ to 3.2% during the quarter, as both metrics were boosted by delivery growth offsetting production overhead costs.
For Q4, revenues should grow at a solid clip QoQ, rising to RMB2.67b to RMB2.87b (USD410-440 million) should December show near 5,000 deliveries (for quarterly deliveries above 12,000); this would exceed internal guidance of 10,000 units and RMB2.2b in revenues. That would lead to a 12-month forward revenue estimate at/above RMB10.0b, or USD1.49b, by Q2 '21.
Revenues should continue to rise significantly as capacity extends to its full amount during 2022 and will be aided by new production in Guangzhou in 2023; XPeng noted that "in addition to its wholly owned plant in Zhaoqing, Guangdong province, which has an annual production capacity of 100,000 units,
XPeng’s new Smart EV Manufacturing Base in Guangzhou will significantly expand the Company’s production capacity and accelerate XPeng’s momentum to achieve its goals in innovation, technological advancement and growth." Zhaoqing's capacity of just over 8,000 units per month still hasn't been fully translated into deliveries, which sit at about half of that figure; however, there's much more room for growth in monthly deliveries and quarterly revenues as deliveries start to rise closer to that max capacity level. Future capacity expansion will only aid revenues as higher delivery potential will be unlocked.
For 2021, strong revenue growth to a potential
RMB14.5b will be aided by the
large, 100+ physical store footprint and margin expansion, with vehicle margin possibly rising another 400 to 600 bp to just under 10%, with gross margin about the same; this would mean that XPeng's margins could remain weaker than peers
Li (19.8% vehicle and gross margin for Q3) and
NIO (14.5% vehicle and 12.9% gross margin for Q3).// A neg-- XPeng's cost of production could remain a very significant (80+%) of revenues moving forward through 2021 as the company is dedicated to heavy R&D investment.<---
XPeng is also taking tentative steps into European expansion, a market which provides a significant amount of room for growth. An initial
100 units of the G3 model had begun delivery to
Norway just over a week ago, kicking off XPeng's international expansion plans ahead of a slated
P7 launch in Europe within the next 12 months.
Yet the R&D investment picture already looks promising, and could potentially allow XPeng to start grabbing more market share in the mid to high-end market, as its two models compete with other EVs for top-of-the-line specs and features while offering a longer range per change, beating out foreign imports based on price. XPeng announced in November that it "has significantly upgraded its autonomous driving software and hardware systems for the 2021 production models,"
introducing Lidar systems to new vehicle production.<-------
XPeng also received the "
Car of the Year 2021 by the Xuanyuan Awards, China’s most prestigious badge of auto quality and innovation"
for the P7, highlighting XPeng's prestige status in creating and elevating a "superior human-car experience that breaks the stereotype of an electric sports car." This recognition of quality and status could lead to more sales through 2021, although it's no guarantee.<---- Hello Apple....
XPeng has the cash and desire to continually push R&D standards higher, so combining that with capacity expansion paints a positive outlook, even in a fragmented market. XPeng had nearly RMB20 billion in cash and equivalents at the end of Q3, and raised another RMB16.3 billion (US$2.5 billion) from the
recent share offering.<----
VAN I ASK YOU TO GET ON BOARD WITH ME-- I HAVE CUSTOM ORDERED A P-7 !!!!
