New Lower Priced Models Help Xpeng Stock See Record Sales

Company Performance - Xpeng delivered a record 21,352 vehicles in September 2024, representing a 39.5% year-on-year increase and a 52% increase from August 2024 [1] - Year-to-date sales for Xpeng stand at approximately 98,561 vehicles, up 21% compared to the previous year [1] - The growth in Xpeng's sales is largely attributed to its new sub-brand, Mona, with the Mona M03 model selling over 10,000 units in its first full month of deliveries [1] Market Context - The Chinese EV market has shown resilience despite a weak economic backdrop, with new energy vehicle sales accounting for about 50% of overall automotive sales [2] - There is a premiumization trend in the Chinese EV market, with vehicles priced over $30,000 making up a growing share of sales, which may benefit Xpeng as it competes in the premium segment [2] - The Chinese government has introduced incentives of RMB 10,000 (approximately $1,410) for consumers switching to electric or low-emission vehicles, which could support Xpeng's lower-end models [2] Financial Metrics - Xpeng's stock has experienced significant volatility, with annual returns of 18% in 2021, -80% in 2022, and 47% in 2023 [3] - For Q2 2024, Xpeng reported revenues of RMB 6.82 billion (approximately $0.94 billion), a 54.1% year-over-year increase, with gross margins improving to 14% compared to -3.9% in the same period of 2023 [3] - Xpeng's stock trades at about 1.9 times forward revenues, which is higher than peers Nio and Li Auto, but its financial metrics have shown improvement recently [3]