XPeng Drops After Recall of Over Half of SUVs Delivered

XPeng is recalling nearly 13,400 electric SUVs, more than half the 24,000 it has delivered so far.
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Shares of XPeng XPEV fell Friday after the Chinese car company announced its first vehicle recall since it debuted on American exchanges back in August. 

The Guangzhou electric-vehicle maker will recall 13,399 G3 electric sport utility vehicles due to an inverter issue that may cause the vehicle to lose power and pose a safety risk, according to China's State Administration for Market Regulation.

XPeng said it has delivered more than 24,000 of the vehicles, which were manufactured between March 2019 and September 2020. The recall will begin on Saturday. 

XPeng shares were down 4.8% at $47.73.

Earlier this month, XPeng got a boost after it was granted a 12.8 billion yuan (US$1.98 billion) credit line by Chinese state-owned banks.

That credit line came after the company raised more than $5 billion in pre-initial public offering financing, its IPO and a secondary offering last year. 

The company, which is one of three Chinese electric-vehicle makers viewed as domestic competitors to Tesla  (TSLA) - Get Report, has more than doubled (up nearly 130%) since its debut. 

China's government has unveiled its Made in China 2025 industrial plan, which lists EVs as one of the 10 significant sectors in which China wants to be a global leader.

Meanwhile, Tesla shares were also falling Friday. The stock dipped after the Palo Alto, Calif., company reported mixed results for the fourth quarter. 

Tesla’s China operations contributed significantly to the year’s performance, as its Shanghai Gigafactory ramped up production quickly after coming online early in the first quarter of 2020. 

The China operation contributed nearly a third of Tesla’s deliveries in 2020. The plant is being expanded and has begun manufacturing Tesla’s Model Y SUV.

Tesla shares at last check were down 4.7% to $796.34.