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Graham Griffin
Graham Griffin
Articles (107) 

Tesla's Chinese Rivals Boast Record Deliveries

Nio and XPeng claw their way toward the EV giant

October 05, 2020 | About:

Tesla Inc.'s (NASDAQ:TSLA) Chinese rivals Nio Inc. (NYSE:NIO) and XPeng Inc. (NYSE:XPEV) have each reported their own record-breaking numbers for the third quarter. Tesla has set its own quarterly delivery record, yet its rivals are seeing numbers rise in leaps and bounds.

Breaking expectations of 137,000 deliveries, Tesla set a record at 139,300 vehicles delivered in the third quarter. The overall number was dominated by the increasingly popular Model 3 and Model Y vehicles at 124,100 deliveries, thanks in part to Model 3 production in the new Shanghai plant.

Nio

Nio, China's premium electric vehicle manufacturer, saw delivery numbers reach new heights at the end of the quarter. The company delivered 4,708 vehicles in September alone, a year-over-year increase of 133.2%. Over the whole quarter, deliveries were up 154.3% year over year at 12,206 vehicles. Yearly deliveries have also seen increases in the triple digits.

September saw the company deliver 16 of its brand new EC6 model that has reached customers for the first time. The vehicle is viewed by some analysts as a potential competitor to Tesla's Model 3.

On Oct. 5, share prices continued to soar up to $21.59 with a market cap of $26.36 billion. The stock struggled throughout the worst period of the pandemic when China's vehicle sales faltered. As the local auto market continues to recover, the prices have followed suit.

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Gurus Jim Simons (Trades, Portfolio), Paul Tudor Jones (Trades, Portfolio) and Steven Cohen (Trades, Portfolio) have all made a killing on the company so far having bought in at an average price of $4.33 during the second quarter.

Even with strong delivery numbers, the company still finds itself issuing new long-term debt and sitting in the distress column based upon its Altman Z-Score of -0.3. Despite these struggles, the company boasts a cash-to-debt ratio of 0.81 that places it higher than 62.96% of its competitors.

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XPeng

Newcomer to the market XPeng also set records for deliveries of its own during the third quarter. The company reported 3,478 deliveries during the month of September, a 31% increase from the prior month and a 145% increase year over year. Overall, the third quarter saw deliveries totalling 8,578 vehicles, representing a 266% increase year over year.

The company raised $1.5 billion in August during its initial public offering and targets its vehicles at the mid- to high-end segment of China's passenger vehicle market. Oct. 5 saw share prices at $19.87 with a market cap of $14.28 billion. Despite the decline since the company first went public, the stock saw a large jump upon the recent delivery reports.

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Analysts believe that customers are buying XPeng's P7 model over the Tesla Model 3 for its better driving range and cost to performance. They believe Tesla's recent price decrease on the Model 3 poses limited impact to the company. As well, the company has just broken ground on its Guangzhou manufacturing base that is set for completion in 2022. The new manufacturing plant is expected to significantly increase future production capability for the company.

Disclaimer: Author owns no stocks mentioned.

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