Last year was a tough one for former electric vehicle (EV) highflyer XPeng Inc. (XPEV.US, 9868.HK), which stumbled badly in the second half of the year on a series of major missteps. But investors seem to be buying into the company’s newly detailed comeback story, driving up its valuation ratios past its top two rivals in the days after its latest results announcement.
Only time will tell if the rally is justified, following a dismal 2022 that XPeng would probably rather forget. In the race to win buyers in China’s ultra-competitive electric vehicle (EV) market, XPeng spent last year falling further behind its two main rivals, Li Auto (LI.US; 2015.HK) and Nio (NIO.US; 9866.HK), as its losses also ballooned.
XPeng’s revenue rose by a modest 28% to 27 billion yuan ($3.9 billion) for all 2022, according to its latest earnings report issued earlier this month. Its vehicle deliveries for the year rose by a similar 23% to 120,757 units, slowing sharply from the triple-digit growth in the previous two years. The company’s net loss nearly doubled to 9 billion yuan, despite a drop in both sales and marketing and R&D expenses.