Chinese electric vehicle manufacturer XPENG (or Xiaopeng Motors) ($XPEV) is getting a lot of attention on the stock market today. This is partly the result of earlier reports of an increase in car sales of 229% compared to the same month last year. This equates to 3,040 vehicles delivered to customers in October. For the year as a whole, this is an increase of 64% and a total of 17,117 car sales. Xpeng’s figures for Q3 are expected on November 12, 2020 and it looks like a good run-up to this day is imminent. The share has risen by approximately 6% since the stock market opening this morning.

robots in the city VS robots on the highway

Xpeng also seems to have given a clear signal about the future and the specializations in which they see a high-potential. For example, the robot taxi is a project in which they do not see any big prospects at the moment. The company states that a robot should not only be able to replace humans, but must also provide added value for it to be a success. It is currently believed that it will be a long time before this happens. Particularly in areas with a high density and high traffic flows, it is a difficult challenge to replace human drivers. Another argument mentioned is that taxis in different parts of the world are relatively cheaper than in Western countries. In these areas, the cost picture is in a different way essential during the transition. For these countries it seems the robot taxis are less profitable and less necessary.

This does not mean that autonomous driving completely disappears from the company’s future plans in other vehicle sectors. Instead of robot taxis, Xpeng would like to focus more on self-driving trucks for long-distance and robots that take care of last-mile deliveries. The company is convinced that this form of modality can be automated more efficiently. Concrete plans for this development are unknown so far.


What shows that confidence is increasing?

Earlier in September, confidence in Xpeng rose when it announced it would receive ¥4 billion ($587 million) from the Guangzhou government to build a new factory and boost its growth. The plant is expected to be completed in December 2022 and to start the production of more vehicles. Currently the company can produce up to 100,000 per year and this needs to be increased significantly. The government agency’s share of the new plant is currently estimated at ¥1.3 billion ($ 194 million).

Under the partnership with Xpeng, the Guangzhou Economic and Technological Development Zone will rent out the factory first and sell it to the car manufacturer at a later stage when the lease expires in seven years. The motivation for a project in this segment is that truck deliveries already take place over long distances on the highways. This structured infrastructure can be more easily generated and processed by artificial intelligence. “Fully” autonomous and more sustainable driving has now generated billions of dollars in investment worldwide and is seen as one of the most important and promising sectors within artificial intelligence.

Xpeng’s autopilot system, Xpilot 3.0, will be included in the P7 smart sedan. At the beginning of 2021, it will give motorists the option of having the vehicle drive independently on motorways and it features full-parking assistance.

A strong foundation has been built this year

Due to the rise of several Chinese car manufacturers and the extreme rise of Tesla earlier this year, it seems that this sector is still on the rise for the time being. In recent months, the Chinese start-ups (like NIO, Inc. and Li Auto) have managed to raise more funds and subsidies to expand production and sell more electric vehicles worldwide.

Neither PSN nor its owners, members, officers, directors, partners, consultants, nor anyone involved in the publication of this website, is a registered investment adviser or broker-dealer or associated person with a registered investment adviser or broker-dealer and none of the foregoing make any recommendation that the purchase or sale of securities of any company profiled in the PSN website is suitable or advisable for any person or that an investment or transaction in such securities will be profitable. The information contained in the PSN website is not intended to be, and shall not constitute, an offer to sell nor the solicitation of any offer to buy any security. The information presented in the PSN website is provided for informational purposes only and is not to be treated as advice or a recommendation to make any specific investment. Please consult with an independent investment adviser and qualified investment professional before making an investment decision.