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XPeng (XPEV), a leading Chinese smart EV manufacturer, released its Q3 2022 earnings Wednesday, missing top and bottom line estimates while offering a less-than-ideal delivery outlook for the rest of the year. Despite this, XPeng stock is racing higher. Let’s see why investors are jumping back in.

Since its foundation in 2015, XPeng has trailblazed its way to becoming a leading electric vehicle maker in the largest EV market globally.

XPeng focuses on delivering “smart EVs,” loaded with leading software and hardware, connectivity features, advanced driver assistance systems, and core vehicle systems. In September 2021, the company began deliveries of its XPeng P5, one of the first mass-produced smart EVS equipped with LIDAR.

The EV maker is building a diverse portfolio of vehicles to fit a wide range of consumer needs, including the following:

  • G3i – Compact SUV
  • P7 – Sports sedan
  • P5 – Family sedan

In addition, XPeng launched its flagship G9 SUV, which began mass deliveries at the end of October. The company believes the G9 will help drive future sales volume with an 800V platform and charging speeds that will “outperform any of its competitors in the market.”

Meanwhile, like many young EV makers, XPeng is absorbing higher costs while trying to manage widening losses. To make matters worse, increasing competition and renewed COVID-19 lockdowns in China are presenting an extra challenge.

In the second quarter, XPeng’s loss widened to $403 million as EV deliveries fell and higher material costs caused gross margins to slip to 10.9%.

XPeng warned EV deliveries would fall further in Q3, indicating between 29,000 and 30,000. With 29,570 total deliveries, the EV maker hit its mark, but not by much. Either way, XPeng stock is soaring today.

XPeng-stock-1
XPeng G9 (Source: XPeng)

XPeng Q3 financial and delivery results

Total deliveries in the third quarter hit 29,570, up 15% from Q3 2021, yet Xpeng’s EV sales have continued trending lower since hitting a peak of 41,751 in the fourth quarter of 2021. The deliveries included:

  • P7 – 16,776
  • P5 – 8,703

Revenue from vehicle sales reached $880 million, up 14% from Q3 2021 but decreasing 10% from the second quarter. Despite this, the cost of sales increased 20.4% from last year as material prices continue cutting into margins.

XPeng’s gross margins bounced back from 10.9% last quarter to 13.5% in Q3 as the automaker has implemented several measures to boost efficiency. During the company’s third-quarter earnings call, the president of XPeng, Dr. Hongdi Brian Gu, spoke about an internal organization restructuring to cut costs and drive long-term results.

We will implement prudent cost control initiatives and improve operational efficiency. As we plan a number of upcoming product and technology rollouts, we are confident that we can achieve significant improvement in both sales volumes and average selling price.

XPeng compared the current EV race in China to a marathon competition, claiming only the strongest players with “well-rounded capabilities, core technology,” and perhaps most importantly, the ability to “monetize from both hardware and software” will win in the long run.

The aim is to be “more concentrated and efficient” to drive future profitability and competitiveness. (Rivian’s CEO also spoke on this.)

Despite the company’s best efforts, XPeng’s loss widened to $330 million (RMB2.38 billion) from around $224 million (RMB1.59 billion) last year as the company scales production. Xpeng issued the following guidance for Q4:

  • EV deliveries: Between 20,000 and 21,000
  • Revenue: Between RMB4.8 and RMB5.1 billion

The downbeat outlook is due to renewed lockdowns in China causing ongoing supply chain disruptions while ramping production of its flagship G9 SUV.

Why is XPeng stock trending

Even with the cautious guidance, XPeng stock is up over 40% today. For one thing, XPeng’s cost-cutting measures are good news. Maintaining efficiency through the production ramp will be critical to the company’s success.

Gu says the effects of XPeng’s internal restructuring will likely become visible in the second half of 2023 when he also expects the EV market to accelerate further. The stock market is forward-looking and could be looking past short-term hurdles.

Management also noted that, although a slowdown is expected this month, December should see sales rebound “sharply” as we roll into the new year.

Lastly, protests have erupted in China over the fresh “zero-Covid” mandates that may be sparking hope for an eased policy, with several Chinese EV stocks trending higher today.

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Europe’s wind power hits 20%, but 3 challenges stall progress

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Europe’s wind power hits 20%, but 3 challenges stall progress

Wind energy powered 20% of all electricity consumed in Europe (19% in the EU) in 2024, and the EU has set a goal to grow this share to 34% by 2030 and more than 50% by 2050.

To stay on track, the EU needs to install 30 GW of new wind farms annually, but it only managed 13 GW in 2024 – 11.4 GW onshore and 1.4 GW offshore. This is what’s holding the EU back from achieving its wind growth goals.

Three big problems holding Europe’s wind power back

Europe’s wind power growth is stalling for three key reasons:

Permitting delays. Many governments haven’t implemented the EU’s new permitting rules, making it harder for projects to move forward.

Grid connection bottlenecks. Over 500 GW(!) of potential wind capacity is stuck in grid connection queues.

Slow electrification. Europe’s economy isn’t electrifying fast enough to drive demand for more renewable energy.

Brussels-based trade association WindEurope CEO Giles Dickson summed it up: “The EU must urgently tackle all three problems. More wind means cheaper power, which means increased competitiveness.”

Permitting: Germany sets the standard

Permitting remains a massive roadblock, despite new EU rules aimed at streamlining the process. In fact, the situation worsened in 2024 in many countries. The bright spot? Germany. By embracing the EU’s permitting rules — with measures like binding deadlines and treating wind energy as a public interest priority — Germany approved a record 15 GW of new onshore wind in 2024. That’s seven times more than five years ago.

If other governments follow Germany’s lead, Europe could unlock the full potential of wind energy and bolster energy security.

Grid connections: a growing crisis

Access to the electricity grid is now the biggest obstacle to deploying wind energy. And it’s not just about long queues — Europe’s grid infrastructure isn’t expanding fast enough to keep up with demand. A glaring example is Germany’s 900-megawatt (MW) Borkum Riffgrund 3 offshore wind farm. The turbines are ready to go, but the grid connection won’t be in place until 2026.

This issue isn’t isolated. Governments need to accelerate grid expansion if they’re serious about meeting renewable energy targets.

Electrification: falling behind

Wind energy’s growth is also tied to how quickly Europe electrifies its economy. Right now, electricity accounts for just 23% of the EU’s total energy consumption. That needs to jump to 61% by 2050 to align with climate goals. However, electrification efforts in key sectors like transportation, heating, and industry are moving too slowly.

European Commission president Ursula von der Leyen has tasked Energy Commissioner Dan Jørgensen with crafting an Electrification Action Plan. That can’t come soon enough.

More wind farms awarded, but challenges persist

On a positive note, governments across Europe awarded a record 37 GW of new wind capacity (29 GW in the EU) in 2024. But without faster permitting, better grid connections, and increased electrification, these awards won’t translate into the clean energy-producing wind farms Europe desperately needs.

Investments and corporate interest

Investments in wind energy totaled €31 billion in 2024, financing 19 GW of new capacity. While onshore wind investments remained strong at €24 billion, offshore wind funding saw a dip. Final investment decisions for offshore projects remain challenging due to slow permitting and grid delays.

Corporate consumers continue to show strong interest in wind energy. Half of all electricity contracted under Power Purchase Agreements (PPAs) in 2024 was wind. Dedicated wind PPAs were 4 GW out of a total of 12 GW of renewable PPAs. 

Read more: Renewables could meet almost half of global electricity demand by 2030 – IEA


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Podcast: New Tesla Model Y unveil, Mazda 6e, Aptera solar car production-intent, more

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Podcast: New Tesla Model Y unveil, Mazda 6e, Aptera solar car production-intent, more

In the Electrek Podcast, we discuss the most popular news in the world of sustainable transport and energy. In this week’s episode, we discuss the official unveiling of the new Tesla Model Y, Mazda 6e, Aptera solar car production-intent, and more.

The show is live every Friday at 4 p.m. ET on Electrek’s YouTube channel.

As a reminder, we’ll have an accompanying post, like this one, on the site with an embedded link to the live stream. Head to the YouTube channel to get your questions and comments in.

After the show ends at around 5 p.m. ET, the video will be archived on YouTube and the audio on all your favorite podcast apps:

We now have a Patreon if you want to help us avoid more ads and invest more in our content. We have some awesome gifts for our Patreons and more coming.

Here are a few of the articles that we will discuss during the podcast:

Here’s the live stream for today’s episode starting at 4:00 p.m. ET (or the video after 5 p.m. ET):

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BYD’s new Han L EV just leaked in China and it’s a monster

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BYD's new Han L EV just leaked in China and it's a monster

The Chinese EV leader is launching a new flagship electric sedan. BYD’s new Han L EV leaked in China on Friday, revealing a potential Tesla Model S Plaid challenger.

What we know about the BYD Han L EV so far

We knew it was coming soon after BYD teased the Han L on social media a few days ago. Now, we are learning more about what to expect.

BYD’s new electric sedan appeared in China’s latest Ministry of Industry and Information Tech (MIIT) filing, a catalog of new vehicles that will soon be sold.

The filing revealed four versions, including two EV and two PHEV models. The Han L EV will be available in single- and dual-motor configurations. With a peak power of 580 kW (777 hp), the single-motor model packs more power than expected.

BYD’s dual-motor Han L gains an additional 230 kW (308 hp) front-mounted motor. As CnEVPost pointed out, the vehicle’s back has a “2.7S” badge, which suggests a 0 to 100 km/h (0 to 62 mph) sprint time of just 2.7 seconds.

BYD-Han-L-EV
BYD Han L EV (Source: China MIIT)

To put that into perspective, the Tesla Model S Plaid can accelerate from 0 to 100 km in 2.1 seconds. In China, the Model S Plaid starts at RBM 814,900, or over $110,000. Speaking of Tesla, the EV leader just unveiled its highly anticipated Model Y “Juniper” refresh in China on Thursday. It starts at RMB 263,500 ($36,000).

BYD already sells the Han EV in China, starting at around RMB 200,000. However, the single front motor, with a peak power of 180 kW, is much less potent than the “L” model. The Han EV can accelerate from 0 to 100 km/h in 7.9 seconds.

BYD-Han-L-EV
BYD Han L EV (Source: China MIIT)

At 5,050 mm long, 1,960 mm wide, and 1,505 mm tall with a wheelbase of 2,970 mm, BYD’s new Han L is roughly the size of the Model Y (4,970 mm long, 1,964 mm wide, 1,445 mm tall, wheelbase of 2,960 mm).

Other than that it will use a lithium iron phosphate (LFP) pack from BYD’s FinDreams unit, no other battery specs were revealed. Check back soon for the full rundown.

Source: CnEVPost, China MIIT

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