Stock in Chinese electric-vehicle maker
XPeng
is stuck somewhere between euphoria and despair. The firm’s second-quarter results, due out Friday morning, will be very interesting.
Investors want to hear about the direction of pricing and demand for XPeng (ticker: XPEV) and the entire Chinese EV industry. What investors learn will impact many EV makers, including
Tesla
(TSLA).
For the quarter, Wall Street expects XPeng to report a loss of 31 cents a share from sales of $707 million. A year ago, XPeng reported a 46-cent loss from $1.1 billion in sales.
Sales are falling. XPeng delivered about 27,000 vehicles in the second quarter, down from just over 34,000 delivered in the second quarter of 2022. Sales are down even as Chinese wholesale EV shipments rose roughly 40% to 1.4 million units in the second quarter.
Falling sales and lost market share are the big reasons XPeng American depositary receipts, or ADRs, are down about 30% over the past 12 months. But take a different view: Shares are up more than 60% over the past three months. Investors were encouraged by a surprise investment from
Volkswagen
(VOW3. Germany). The pair will develop two EVs for the Chinese market.
(XPeng has shares listed in Hong Kong and the U.S. Each U.S.-listed ADRs represents two shares of common stock.)
Shares peaked at over $23 in late July after the VW announcement. They closed at $15.65 Thursday, down more than 30% from that high. Price cuts on vehicles from several EV manufacturers including Tesla have stoked fears of weakening demand and a price war.
To settle shares down, XPeng will need to deliver solid delivery guidance and positive commentary about overall EV demand in China. Management hosts a conference call at 8 a.m. Eastern time.
Write to Al Root at [email protected]
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