Another day, another alt energy vehicle producer going IPO. This time we are talking about a direct Tesla competitor in China, XPeng (XPEV).
Existing Xpeng shareholders include Alibaba, Coatue, Qatar Investment Authority and Xiaomi, which means that they are backed by some serious companies and funds already. So why do they need another round of money?
Half of the capital raised through the XPEV IPO will be used for R&D, 30 per cent will be allocated towards selling and marketing, and 20 per cent for general corporate purposes, including working capital needs.capital
The bearish case for Xpeng is that they delivered less vehicles in Q1 and Q2 2020 compared to the same period in 2019. Also, we are in the middle of the economic “cold war” between China and USA.
The bullish case is that this was mostly due to pandemic and Chinese EV market is already 300% bigger than U.S. market and China accounts for 45.1% of global EV sales.
The company designs, develops, manufactures, and sells smart EVs with autonomous driving, smart connectivity and core vehicle systems. XPEV targets the mid to high-end segment in China’s passenger vehicle market and it currently has two models of vehicles under production, G3 (SUV) and P7 (sports sedan).source
The truth is, Xpeng is producing models that look similar to Tesla vehicles but with a price tag that fits Chinese market. But they are not a low quality producer. Recently they partnered with Blackberry to power the Level 3 driving domain controller of Xpeng. Baked in Xpeng’s intelligent cockpit is BlackBerry’s operating system called QNX, which competes with the likes of Android and Linux to enter automakers’ next-gen models.
Overall, $XPEV is similar to $NIO in terms of their stage of production. Both companies have two models of vehicles in production. However, Xpeng seems to have better cost control and financial backing as it has already completed its Zhaoqing plant to build future modelssource
Xpeng autonomous driving system and in-car intelligent operating system allow customers to enjoy a new smart mobility experience, and their Smart EVs can be upgraded through over-the-air, or OTA, firmware updates.
XPILOT, their autonomous driving system, provides assisted driving and parking functions tailored for driving behavior and road conditions in China. Currently deployed on the G3 and the P7, XPILOT 2.5 offers adaptive cruise control, adaptive turning control, lane centering control, automated lane changing and automated parking. Company plans to roll out XPILOT 3.0 by early 2021. XPILOT 3.0 will feature several new functions, including a navigation guided pilot for highway driving and advanced automated parking, in addition to the functions available in XPILOT 2.5.
Xmart OS, in-car intelligent OS, supports a smart cockpit that delivers a seamless, easy-to-use, and voice-controlled smart mobility experience. Xmart OS enables a broad range of smart connectivity functions, such as artificial intelligence, or AI, voice assistant, smart navigation and an app store. The in-car app store allows Xpeng customers to conveniently access third-party services and infotainment.
Xpeng Inc designs, develops and engineer their core vehicle systems in-house, including the development of key technologies relating to powertrain and E/E architecture to deliver superior and reliable vehicle performance.
Tomorrow is IPO day and all signs are telling us that XPEV stock price wont stop at $15 because so called clean energy stocks are not going down any time soon.