[ad_1]
Text size
The XPeng P5 sedan is an electric vehicle with a price tag as low as $ 25,000.
Business thread
Electric vehicles took a new step on Wednesday. There is a sophisticated electric vehicle equipped with a lidar that can be purchased for less than $ 25,000. The vehicle is not from the EV leader
You’re here,
although.
Chinese manufacturer of electric vehicles
XPeng
(ticker: XPEV) has launched its third production model, the P5 sedan. An electric vehicle equipped with lidar that starts at less than 160,000 Chinese renminbi, or less than $ 25,000.
There are cheaper EVs on the market, but not with advanced lidar compatible driver assistance systems and not with the P5 lineup.
Lidar is essentially a laser radar and enables autonomous driving functions to be activated. XPeng is quick to point out that its driver assistance features, like all others available in passenger vehicles purchased by consumers today, always require drivers to pay attention to the road at all times. Autonomous driving systems can do a lot of things, even make unprotected left turns on city streets, but they’re not really autonomous yet.
Lidar is unusual on a car for consumers. This is an impressive feature for a low cost electric vehicle. Additionally, the P5 sedan will travel approximately 290 to 375 miles on a single charge, depending on the configuration purchased. It also compares favorably to more expensive electric vehicles.
More affordable electric vehicles are opening up a new market segment for the battery electric car industry. Only a few segments of the automotive world have competitive electric vehicles for sale. Light duty vans are coming now. Rivian is expected to begin deliveries of his pickup in 2021. And a Tesla Model 3 as well as a Chevy Bolt, two popular EV models, can sell for between $ 40,000 and $ 60,000. Both are more expensive than Honda Civic or Toyota Corolla type vehicles. Tesla is working on a cheaper model, starting at around $ 25,000 as well. Investors expect this model to arrive around 2023.
Despite the low purchase price of the P5, XPeng Chairman Brian Gu said that the profitability of the P5 should be between its less profitable G3 SUV and the more profitable P7 sedan. XPeng’s gross profit margins on car sales have been positive over the past four quarters, reaching around 11% in the second quarter of 2021. Vehicle profit margins have improved as volumes increased and after the company introduced the P7 sedan.
However, the headline doesn’t react too positively to the announcement. Shares are down 3.7% at midday Wednesday. The
S&P 500
is up 0.5%, while the
Dow Jones Industrial Average
is up about 0.3%. Tesla (TSLA) shares are up around 0.6%
The P5 looks like a winning product, so the disappointment of the launch is probably not responsible for the weakness in the share price. Other things that were raised during the company’s launch conference call may be of concern to investors. Two areas that Gu addressed – in response to questions – were the number of electric vehicle companies in China and competition from overseas competitors.
There are hundreds of electric vehicle companies in China, and the government wants less. Companies such as XPeng, however, are the most important and established players. It will be up to them, and other traditional automakers, to mop up the excess capacity. It could be a surplus of stock, but XPeng could have a chance to increase its manufacturing capacity at a reduced price.
Gu also said he believed that foreign auto makers might be successful in selling electric vehicles in China. It might annoy investors as well, but Gu said his company has a significant lead in offering products at attractive prices to Chinese buyers.
China is the world’s largest market for new cars and electric vehicles. About 10% of all new cars sold in China this year were all-electric or plug-in electric hybrids.
XPeng stock is down about 13% year-to-date, behind the S&P 500’s 19% gain. Still, stocks have risen about 77% in the past 12 months. The S&P is up about 31% over the same period.
Write to [email protected]
[ad_2]
Source link