The Yahoo Finance Live team discusses the latest movements in XPeng's stock and the company's restructuring plan.
Video Transcript
- There's another company that has its work cut out for them. It's XPeng. That stock is jumping today. The Chinese EV maker posted a loss per share of $0.20 for its latest quarter. With sales coming in noticeably lower than the same period last year. But the stock is up today because the startup has announced cost cutting measures and also restructuring measures going forward.
So in recent months, Xpeng vehicles haven't been selling as well because of competition. Tesla lowered its prices for its vehicles. And XPeng followed suit as well. So shares are down about 89% from their record of $74 back in November 2020. The Chinese market is much more competitive than here in the US. The EV adoption is greater in China than in the US. And the competition in China is fierce.
Tesla is still seen as the top tier along with NIO as well. And it's been uphill for Xpeng because even though they did well last year, they are seeing a slowdown. They have had to lower their prices to sort of-- because they can't have prices higher than Tesla's.
- Yeah, certainly We saw that pressure on their margins, hence the pressure that we saw in XPeng's latest results here. Also their revenue down 40% year over year. The deliveries a significant hit for this past quarter. It's also supposed to drop, what, almost 50%. In the current quarter when we're talking about the expectation now 18,000 to 19,000.
You're right. When you look over to China certainly it's a different competition picture when it comes to EVs. Lots of stiff competition from those Chinese companies. Tesla making its way there too, picking up some of that market share. Just really complicates the whole spending factor, the whole, I guess, outlook here for that company. And XPeng actually pushed out its view for profitability out to 2025. And that really just paints or illustrates the competitiveness of that market.
- It's a tough market. But I do think when you hear words restructuring, when you hear layoffs, when you hear anything like that you're going to be rewarded on the street because right now the focus is on profitability. We're just talking about how much competition is in the EV space. Especially new competition. So any sign that you can improve those margins, that's what investors want to hear.
