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Tesla-Inspired XPeng Motors Files for US IPO

How does the Chinese automaker compare to Tesla?

On Friday, fully-electric automaker XPeng filed a form F-1 with the SEC indicating their intention for an initial public offering on the US stock exchange.

The automaker, backed by Alibaba, has raised about $1.7B in their six year history and is reportedly valued above $3.6B based on a funding round from 2018. XPeng is a bit notorious for their unabashed emulation of Tesla, right down to their charging stations which they call "superchargers". Tesla has also accused and is suing a former employee for allegedly sharing Autopilot source code with XPeng.

As for their products, XPeng sells a compact SUV and recently released a sedan, priced near the Model 3. The G3 SUV, which starts near $21,100 after subsidies in China, is available in 58 kWh and 67 kWh configurations. Estimated range on the NEDC test cycle, which generally yields much higher results than the EPA test cycle, spans from 286 miles to 323 miles.

The P7 sedan, which began production in May, features 71 kWh or 81 kWh prismatic NCM batteries supplied by CATL. Starting at $33,000 after subsidies in China, the P7 offers a lower price than Tesla's Model 3 in China, which starts around $39,000 after subsidies. The P7's range is listed at 349 miles to 439 miles on the NEDC test cycle, depending on configuration.

Based on the ranges stated by Tesla on their website in China, the P7 would appear to have more range and slightly better efficiency than the Model 3. Strangely, Tesla's listed ranges are only slightly higher than EPA estimates even though NEDC results are often around 40% higher. Perhaps Tesla is attempting to give a more realistic estimate like they did in the US when the Model 3 was first released by intentionally understating the results. If so, the listed XPeng ranges would not be comparable. It may be wise to wait for more third party efficiency testing.

As for the business, XPeng has a ways to go before becoming profitable. They posted a loss of around $113M for the first half of the year on revenues of $142M. Gross margins were -3.5%, which are calculated before accounting for operating costs. However, that was a significant improvement from the -38% gross margins in the first half of 2019.

As the P7 ramps, it will be interesting to see if XPeng can start to post positive gross margins as they work to scale up to the 250,000 vehicle per year capacity they believe their factories to eventually be capable of. In July, XPeng delivered 1,641 P7 vehicles.

For more analysis and some Tesla-specific updates, please see the included video.


Disclosure: Rob Maurer is long TSLA stock and derivatives.