Technology

Chinese Tesla rival Xpeng plans to sell half of its cars abroad

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BEIJING – Chinese electric car startup Xpeng plans to become a global automaker, with half of vehicle deliveries going outside of China, Vice President and Chairman Brian Gu said on Wednesday.

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

Gu did not provide a specific timeframe for achieving this goal.

For comparison, US company Tesla said in the third quarter that its home 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. Elon Musk automaker opened a factory in Shanghai and began shipping locally made cars just before the pandemic broke out in January 2020.

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

Xpeng started shipping cars to Norway in December 2020. Other Chinese automakers focused their initial overseas expansion in the country, where government incentives have supported local demand for electric cars.

The US-listed Chinese start-up Nio opened a flagship store in Oslo and began delivering cars locally in September.

BYD, supported by US billionaire Warren Buffett, started shipping electric cars to Norway this summer and plans to ship 1,500 cars there by the end of the year. Last week BYD announced that it started deliveries to the Dominican Republic in October after similar expansion into Brazil, Mexico, Colombia, Uruguay, Costa Rica and the Bahamas.

Read more about electric vehicles from CNBC Pro

Profitability still elusive

Xpeng’s shares, listed in the US, rose more than 8% overnight after the company posted a jump in sales of 5.72 billion yuan ($ 887.7 million) in the third quarter. That exceeded expectations of 5.03 billion yuan, according to StreetAccount.

However, according to StreetAccount, the start-up posted an unexpectedly large loss of 1.77 yuan (27 cents) per share versus expectations of a loss of 1.17 yuan.

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

In late 2019, ahead of the coronavirus pandemic and the resulting chip shortage, Gu told CNBC that he expected to break even in about two or three years – if the company was able to produce 150,000 cars a year.

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

The company launched its first commercially available vehicle, the G3 SUV, in December 2018. However, the P7 sedan that shipped last summer has proven to be far more popular, accounting for more than 77% of deliveries, according to Gu.

In October, Xpeng began delivering a third electric model, the P5 sedan. Last week the startup unveiled a new electric SUV, the G9, which Xpeng said was being developed for the international and Chinese markets.

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