XPeng: China's EV King Of Deliveries
Summary
- No company in XPeng’s industry group grows deliveries as fast as XPeng.
- XPeng sold 16 thousand EVs in December, generating 181% year-over-year growth.
- New product launches in FY 2022 will add to XPeng’s sector-leading delivery growth.
Robert Way/iStock Editorial via Getty Images
Once again, Chinese electric vehicle maker XPeng (NYSE:XPEV) crushed the competition regarding delivery growth in the last month of FY 2021. XPeng had the largest EV output in its industry group, which includes NIO (NIO) and Li Auto (LI), and continues to generate the fastest electric vehicle delivery growth. Because of XPeng’s discounted sales growth and fast production ramp, XPeng’s shares can revalue higher in 2022!
XPeng is still the king of EV deliveries
XPeng maintained its delivery momentum all the way through the last month of 2021 and the electric vehicle company once again showed its rivals what spectacular EV delivery growth rates look like. In the last month of the year, XPeng delivered 16 thousand electric vehicles, the second straight month in which deliveries surpassed 15 thousand EVs. XPeng currently sells three models, including the P7 sport sedan, the P5 family sedan and the G3/G3i sport utility vehicle.
In December 2021, XPeng delivered 7,459 P7s, 5,030 P5s and 3,511 G3/G3is. The XPeng P5 just launched 4 months ago and saw 134% month-over-month growth in deliveries in December. Besides the three existing models already selling in its domestic market, XPeng is set to launch a fourth model in FY 2022, the G9 luxury sport utility vehicle which is expected to go on sale in China in the third quarter. The G9 has specifically been developed for international markets and might already be sold in Europe toward the end of the year, or the beginning of FY 2023.
The delivery growth trend for XPeng’s various EV models is very positive and the company has seen accelerating momentum all throughout FY 2021.
(Source: InsideEVs)
XPeng’s total delivery growth in December was 181.0% year over year and the electric vehicle startup continued to have the largest EV output in its industry group. The second-highest number of deliveries was done by Li Auto which delivered 14,087 EVs, showing a growth rate of 130.0%. NIO, again, got the third spot on the customer delivery list with December deliveries totaling 10,489 EVs. For NIO, it was the second straight month where deliveries surpassed the 10 thousand benchmark.
Deliveries | November | Nov Y/Y Growth | December | Dec Y/Y Growth |
XPEV | 15,613 | 270.0% | 16,000 | 181.0% |
LI | 13,485 | 190.2% | 14,087 | 130.0% |
NIO | 10,878 | 105.6% | 10,489 | 49.7% |
(Source: Author)
XPeng also had the highest number of EV deliveries in the fourth quarter (41,751) and in FY 2021 (98,155). Li Auto got the silverware for delivering 35,221 electric vehicles in Q4’21 and 90,491 EVs in 2021. The bronze medal, regarding both absolute factory output and delivery growth rate, went to NIO which delivered 25,034 EVs in the last quarter and 91,429 EVs in total in FY 2021. XPeng pulled further ahead of NIO in the fourth quarter, regarding total deliveries, as the electric vehicle maker sold 67% more EVs in Q4’21 than NIO.
NIO has been retooling its production lines in the fourth quarter which lowered the firm's factory output materially, especially in October.
For FY 2022, I estimate that XPeng will surpass 200 thousand EV deliveries, in part due to new product launches and strong customer adoption of the P5. XPeng will likely be the EV startup with the fastest delivery growth throughout this year as well.
Deliveries | Q4'21 deliveries | Y/Y Growth | 2021 deliveries | Y/Y Growth | |
XPEV | 41,751 | 222.0% | 98,155 | 263.0% | |
LI | 35,221 | 143.5% | 90,491 | 177.4% | |
NIO | 25,034 | 44.3% | 91,429 | 109.1% |
(Source: Author)
Growth at the right price
Regarding execution and production ramp, XPeng is the best deal in China’s electric vehicle sector, ahead of NIO and Li Auto. Based off of sales of $5.9B in FY 2022, XPeng has a lower sales volume than NIO and Li Auto, but the EV maker has the highest potential to outperform its rivals regarding sales and delivery growth. For that reason, XPeng also has the highest P-S ratio in the industry group which I find justifiable.
Risks with XPeng
China has been heavily subsidizing the purchase of electric vehicles to support the government’s policy target of reaching a 20% EV share by 2025. The central government and municipalities heavily support electric vehicle adoption which is why China has the fastest growing EV sector in the world.
The central government has been reviewing EV subsidies for a while and announced a 30% cut in subsidies at the end of 2021. This change in subsidy policy will make electric vehicles in China more expensive which may lower demand for EVs and slow down the sector’s production and delivery growth. If this happens, industry sales growth is also going to slow down and, potentially, China’s EV makers may start to trade at lower sales multipliers.
Final thoughts
XPeng once again showed its rivals how it’s done. Ending the year with 16 thousand monthly deliveries, which was a record for the company, implies that strong momentum is set to carry over into FY 2022. XPeng could deliver close to 200 thousand EVs this year as the firm’s new G9 SUV will start to sell in the second half of the year, adding additional unit growth. XPeng’s revenue and delivery growth has the deepest value in the industry group and shares are set for a major revaluation in FY 2022!
This article was written by
Analyst’s Disclosure: I/we have a beneficial long position in the shares of XPEV, NIO, LI either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.
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