Chinese buyers who are not living in lockdown are shaking off price increases for electric vehicles
Guangzhou-based Xpeng is one of several Chinese electric car companies that have started expanding overseas.
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BEIJING – In a sign Chinese drivers are still willing to buy electric, start-ups Xpeng he said demand for his cars has shrugged off the impact of price hikes.
From no to Tesla, Electric car companies in China have raised their prices in recent months, citing the impact of rising costs of raw materials such as those for battery components.
After the price hike of a few thousand dollars in MarchXpeng has seen a recovery in demand in regions not affected by the latest Covid blockades in China, Brian Gu, vice president and president, said in an exclusive interview with CNBC. “Squawk Box Asia. “
With that ability to pass on rising raw material costs to consumers, Gu said the company can then “continue our innovation and investment.”
Last week, Nio CEO William Li told CNBC about his company The biggest problem was supply chain disruptions, not the demand for electric cars in China.
Passenger car sales fell 35.5% year-on-year in April, but new-energy vehicles, which include battery electric cars, saw sales increase 78.4%, according to the China Passenger Car Association. .
Covid controls still put a strain on Xpeng, whose shares fell 5.5% in U.S. overnight trading after providing below-expectations second-quarter guidance.
The electric car company said it expects total revenue to nearly double in the second quarter from a year ago, between 6.8 billion yuan ($ 1.02 billion) and 7.5 billion yuan. But this was below previous FactSet estimates which ranged from 7.08 billion yuan to 9.02 billion yuan.
In the first quarter, Xpeng reported a lower-than-expected loss of 1.8 yuan per share, compared with FactSet’s estimated loss of 1.9 yuan per share. Revenues of 7.45 billion yuan also exceeded FactSet’s expectations of 7.39 billion yuan.
Gu told CNBC “the second quarter will be challenging” due to the impact of Covid, particularly in April.
“There are no operations per se in the city of Shanghai and some surrounding areas,” he said on Tuesday.
The southeastern metropolis of Shanghai has been battling Covid since March, with blockades across the city approaching two months. The city in mid-April began prioritizing some activities, particularly in the automotive sector, for the resumption of production within a bubble.
Shanghai also plans to restore normal life and work by mid-June. But over the weekend a downtown neighborhood banned residents from leaving their apartment complexes again, illustrating the challenges to reopen quickly.
Gu previously said in an earnings call, accessed via Refinitiv Eikon, that the Covid lockdowns affected “important markets” for Xpeng and that he expected strong order momentum as those areas eased. restrictions.
In addition to the Covid checks, company CEO Xiaopeng He added to the call that the ongoing chip shortage was an issue.
“If there was no resurgence of COVID in China right now, I think most of our colleagues or all new electric vehicle manufacturers in China right now will actually be limited by the capacity or supply of the chip in general,” he said he said.