Electric vehicle (EV) company Xpeng Motors generated RMB 3.76 billion (USD 582.5 million) in Q2 2021, up 536.7% year-on-year and beating market expectations, according to the company’s latest financial results released on Thursday.
The Guangzhou-based company delivered 17,398 vehicles in the June quarter compared to 3,228 in Q2 2020, setting a quarterly record in the company’s history. “Notably, deliveries for the first half of 2021 exceeded the total deliveries for the full year 2020, reaching 30,738, an increase of 459% YoY,” chairman and CEO He Xiaopeng said in a statement. The company’s gross margin continued to improve, reaching 11.9% in the past quarter from 11.2% in Q1 2021. Despite the strong results, Xpeng Motors still lags behind rival Nio in delivery volume, as Nio delivered 21,896 vehicles in Q2 2021 and 42,556 for the first half of 2021.
Xpeng Motors expanded into Europe in the June quarter, delivering 500 G3 SUVs to Norway, where the company is ramping up its sales strategy that includes both wholesale and retail. “We are actually going to try a hybrid [sales] model in Europe. For example, in Norway, we’re working with the leading distributor right now. But we also have plans to open up our own retail stores in major cities in the European countries that we target. So we’re experimenting with a mixed model,” He told investors on the earnings call. In its domestic market, Xpeng Motors operates a network of 200 physical stores across 72 cities, while the total penetration of EVs in China’s auto industry surpassed 10% this quarter, according to the CEO.
Xpeng Motors is listed on the New York Stock Exchange and completed an IPO in Hong Kong in July to raise additional funds for R&D as well as sales and marketing. The company has over 3,000 employees committed to R&D as of Q2 2021, a 50% increase from the beginning of the year, and aims to take that headcount to 4,500 by the end of 2021. R&D expenses jumped 170% YoY during Q2 2021.
Xpeng Motors’ P7 coupe is priced around RMB 300,000 (USD 46,000), but going forward, the company expects its continuously improving assisted-driving technologies to take the brand deeper into the premium EV segment. “In the future, we will target an even higher price range at RMB 400,000 (USD 62,000) or even RMB 500,000 (USD 77,000),” He said. Xpeng Motors’ share price fell by 0.47% to USD 40.62 during Thursday trading following the earnings announcement.