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The US-listed shares of China-based electric vehicle maker XPeng skyrocketed Wednesday, as investors cheered changes in China’s COVID policy while shrugging off weak third-quarter results and a downbeat outlook. The rally comes even after XPeng reported a wider-than-expected loss for the third-straight quarter, missed on revenue for the first time, and said it expected fourth-quarter revenue to fall 40% to 44% from a year ago.
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The EV carmaker suffered a net loss of 2.38 billion Chinese yuan versus the 2.09 billion yuan expected. That was wider than the 1.59 billion net loss posted in the same period last year but narrower than the second quarter. While its revenue stood at 6.82 billion Chinese yuan ($960.9 million) versus the 7.26 billion yuan expected, representing a 19.3% year-on-year rise.
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XPeng’s stock rally also comes at a time when investor sentiment had soured. XPeng delivered 29,570 electric vehicles in the third quarter, 15% more than the same period last year. However, that was a 14% decrease from the year's second quarter.
Why it matters
The firm has faced several challenges recently, including widespread Covid lockdowns in China as the country battles outbreaks in various cities. Like other carmakers, XPeng has been dealing with rising material costs, which forced the company to hike the price of its cars earlier this year. XPeng’s stock soared 60.7% in November but has still tumbled 41.7% over the past three months.
