Chinese buyers not living in lockdown shake off EV price hikes
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Guangzhou-based Xpeng was one of many Chinese electric vehicle companies to open overseas.
Getty Images| Future Publishing | Getty Images
BEIJING — In a sign Chinese drivers are still willing to buy electric, start-up XpengIt stated that the price rises have had little impact on car demand.
Start at NioTo Tesla, electric car companies in China have raised pricesIn the past few months, they have cited the effect of rising commodity costs like those for batteries.
After hiking prices by a few thousand U.S. dollars in MarchXpeng’s demand has been recovering in areas not affected in the recent Covid lockdowns in China. Brian Gu, Vice Chairman and President of Xpeng, stated Tuesday during an exclusive interview with CNBC’s “Xpeng.”Squawk Box Asia.”
Gu stated that the ability to pass rising raw material costs onto consumers will allow Gu to “continue innovation and investment.”
CNBC interviewed William Li, CEO of Nio last week about his company’s financial situation. biggest problem was supply chain disruptions, not demand for electric cars in China.
Passenger car sales fell by 35.5% year-on-year in April, but new energy vehicles — which include battery-powered electric cars — saw sales surge by 78.4%, according to the China Passenger Car Association.
Xpeng’s shares dropped 5.5% during overnight U.S. trades after Covid gave second-quarter guidance lower than expected.
According to the electric car manufacturer, total revenues will nearly double from last year’s quarter to 6.8 billion Yuan ($1.02billion) to 7.5 billion Yuan. This was however below the FactSet estimates, which ranged from 7.08 billion yuan up to 9.02 million yuan.
In the first quarter, Xpeng did report a smaller-than-expected loss of 1.8 yuan per share, versus the FactSet estimated loss of 1.9 yuan per share. FactSet forecasts for 7.39 trillion yuan, which Xpeng also reported 7.45 billion in revenue.
Chip shortage, covid all have their toll
Gu stated to CNBC that the second quarter would be difficult due to Covid’s impact, especially in April.
“There are not operations in Shanghai, or some surrounding areas per se,” he stated on Tuesday.
Covid has plagued Shanghai, a southeastern city. Citywide lockdowns are now approaching the two-month mark. The city in mid-April started to prioritize some businesses — especially in the auto sector — for resuming production within a bubble.
Shanghai plans to return to normal work and life by the middle of June. The incident occurred in downtown Shanghai, where residents were prohibited from leaving their homes. challenges to reopening quickly.
Gu mentioned earlier that Covid lockdowns affected “important market” for Xpeng and that he anticipates strong order momentum when those areas are freed from restrictions.
Xiaopeng, CEO of the company, said that Covid controls were not the only problem.
He stated that if there wasn’t a COVID resurgence right now in China, then I believe the majority of our peer or all the new EV manufacturers in China will actually be limited by either the availability or capacity of the chip.
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