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Tesla’s Chinese rival Xpeng wants to sell half of its cars overseas

Xpeng CEO He Xiaopeng stands next to the company’s P7 electric sedan as he addresses the media at the 2020 Beijing auto show.

Evelyne Cheng | CNBC

BEIJING – Chinese electric car start-up Xpeng plans to become a global automaker, with half of vehicle deliveries going to countries outside of China, Vice President and President Brian Gu said on Wednesday.

“As a company that focuses on global opportunities, we want to balance our contribution to delivery – half of China, half of outside China – in the long term,” Gu said in an interview. exclusive with CNBC’s Arjun Kharpal on “Squawk Box Asia.”

Gu did not provide a specific timeline for achieving this goal.

For comparison, U.S.-based Tesla said in the third quarter that its home market accounted for 46.6% of total sales.

China accounted for 22.6% of Tesla’s overall sales, down from just under 20% a year ago. Car maker Elon Musk opened a factory in Shanghai and started delivering locally made cars just before the pandemic began in January 2020.

Gu said Guangzhou-based Xpeng will invest more in international markets this year and next, and expects to enter Sweden, Denmark and the Netherlands next year.

Xpeng began shipping cars to Norway in December 2020. Other Chinese automakers focused their initial overseas expansion on the country, where government incentives supported local demand for electric cars.

The Chinese start-up Nio, listed in the United States, opened a flagship store in Oslo and began deliveries of local cars in September.

BYD, backed by US billionaire Warren Buffett, began shipping electric cars to Norway this summer and aims to deliver 1,500 cars there by the end of the year. Last week BYD announced it had started deliveries to the Dominican Republic, following a similar expansion to Brazil, Mexico, Colombia, Uruguay, Costa Rica and the Bahamas in October.

Profitability still elusive

Shares of Xpeng, listed in the United States, rose more than 8% overnight after the company reported a decline in third-quarter revenue, reaching 5.72 billion yuan (887.7 million yuan). dollars). This exceeded expectations by 5.03 billion yuan, according to StreetAccount.

However, the start-up reported a larger-than-expected loss of 1.77 yuan (27 cents) per share, compared to an expected loss of 1.17 yuan, according to StreetAccount.

Gu said on Wednesday that he expects the automaker to be able to break even in two years.

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In late 2019, ahead of the coronavirus pandemic and the resulting chip shortage, Gu told CNBC he expects to break even in about two or three years – if the company is able to produce. 150,000 cars per year.

Xpeng said last month it has produced just over 100,000 cars in total since its inception six years ago.

The company launched its first commercially available vehicle, the G3 SUV, in December 2018. But the P7 sedan, whose deliveries began last summer, has proven to be much more popular and accounts for over 77% of sales. deliveries, according to Gu.

Xpeng began shipping a third electric model, the P5 sedan, in October. Last week, the startup unveiled a new electric SUV, the G9, which Xpeng says is designed for the international and Chinese markets.

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