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Xpeng Expects to Meet or Beat Sales Targets After Stellar May

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·2 min read
Xpeng Expects to Meet or Beat Sales Targets After Stellar May
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(Bloomberg) -- Chinese electric-vehicle maker Xpeng Inc. is confident of meeting or exceeding its second-quarter delivery targets after posting strong sales growth in May, President Brian Gu said.

And the chip shortage that has crushed global auto production should start to ease later this year, Gu said in an interview with Bloomberg TV on Wednesday.

Xpeng delivered 5,686 vehicles in May, taking year-to-date deliveries to 24,173 units, a 427% increase from the first five months of 2020, when the emergence of coronavirus in China squeezed sales.

“We are on track to meet or exceed second-quarter delivery numbers, which I think means Chinese EV demand is still very strong,” Gu said in the interview. “After a short pause during China New Year, the industry has rebounded very strongly and I think the whole year outlook is very, very strong as well.”

U.S.-traded shares of Xpeng and Nio Inc. surged in New York on Tuesday after the two Chinese EV makers reported May sales and Citigroup Inc. boosted its estimates for the industry. The optimism also lifted Workhorse Group Inc., Nikola Corp., Lordstown Motors Corp. and Fisker Inc., with SNE Research saying global EV battery sales more than doubled in the first four months of the year.

Read more: China Electric Car Makers Outshine Peers on Growing Optimism

Xpeng’s American Depositary Receipts closed up 7.7% and Nio jumped 9.6%.

On the chip shortage, Gu said it should start to ease in the second half, and “hopefully by early next year we’ll be back to normal again.”

Carmakers from Volkswagen AG and Stellantis NV to Ford Motor Co. and Nissan Motor Co. have warned the chip shortage is set to worsen, while Li Auto Inc. President Kevin Shen last week said it may last into the start of next year.

Companies have suspended production and are starting to strip out high-tech features to cope with the crisis. The shortage may cost global automakers $110 billion in lost sales, according to AlixPartners.

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