Any man who can drive safely while kissing a pretty girl is simply not giving the kiss the attention it deserves. – Albert Einstein.
The world of driving is going green, no doubt about it. And it should be.
We believe in our responsibility to save this planet and we got to act now by buying old, rusty, gasoline powered BMW! Seriously!?
Well, let me explain it.
With the rise of Tesla, there are hundreds of Electronic Vehicles (EV) companies proliferating around the globe. Nonetheless, like me, if you are thinking of buying an electronic vehicle, your first though should be Tesla. Tesla is the uncontested market leader in EV market.
The cheapest Tesla (i.e. model 3) cost $40,000, which happens to be just shy of thrice my budget. Therefore, the only option for a responsible world citizen like myself is to buy an old, rusty, gasoline powered car. There are other less expensive models with other brands, but I wish not to own them. At this point in time, my desire to survive and live is greater than my desire to save the world.
After all, with the gasoline price bottom low, it isn’t too bad financially to buy a luxurious brand to drive, which is exactly what this author did.
BMW is more comfortable to drive. Also, it yields more kisses from my wife, which gives me great deal of satisfaction to drive it.
Its likely that Albert Einstein does not approve my kisses since I don’t have any accidents yet!
Electronic Vehicle Market Analysis
Global EV market share is just 1%. That means there is a huge runway for electronic vehicles.
2018 Top 10 Vehicles manufacturers by Global Number of Vehicles Sales Figure.
- Volkswagen Group – 10.8 million
- Toyota – 10.5 million
- Renault–Nissan–Mitsubishi Alliance – 10.3 million
- General Motors – 8.7 million
- Hyundai Motor Group – 7.5 million
- Ford – 5.7 million
- Honda Motor Group – 5.2 million
- Fiat Chrysler Automobiles – 4.8 million
- Groupe PSA – 4.1 million
- Suzuki – 3.2 million
Let me remind you that Tesla sells less than 500,000 vehicles in 2020 and XPeng sells less than 10,000 vehicles in 2020.
Here are the list of notable EV companies that are or are going to make some splash in the industry.
|EV Company||Founded||Based In||Market Cap||Key Notes|
|Rivian Automotive LLC||2009||California||5.3 B||10000 Orders from Amazon.|
Backed by Ford.
|Lucid Motors Inc||2007||California||1 B||Backed by Saudi Arabia State Fund.|
|Lordstown Motors Corp||2019||Ohio||4.4 B||Backed by General Motors.|
|Nikola Corp||2015||Phoenix||10.1 B||Targeting Commercial Trucking Market.|
|Canoo Inc||2018||California||2.4 B||Targeting Microbus Like vehicle.|
|Fisker Inc.||2016||California||4.5 B||Outsourced Manufacturing.|
|NIO Inc.||2014||Shanghai||67 B||Backed by Tencent Holding.|
Main Model SUV Selling for $52k.
1.6 Billion losss in 2019.
4,708 vehicles delivered in 2019.
|Faraday and Future Inc.||2014||California||Targeting luxury SUV starting at $100,000.|
Loss of $2 billion in 2019.
|Xpeng Inc||2015||Guangzhou||36.9 B||Backed by Alibaba Group Holding.|
Sedan Starting at $37K.
Own Autonomous driving software.
10,000 vehicles delivery target for 2020. Sold 8.6K so far.
|Li Auto Inc.||2015||Beijing||31.8 B||Backed by TikTok creator ByteDance Ltd.|
Focusing on Hybrid Luxury SUV.
|Arrival Ltd.||2015||London||5.4 B||Focusing on Passenger Bus.|
Order from UPS for 10,000 vans.
|Tesla||2003||California||490 B||Target to sell 500,000 vehicles in 2020.|
24 Billion Revenue in 2019.
Elon Musk (CEO) owns 20.8% of the company.
81% of total Electronic Vehicle sold in US and 23% in the world are Tesla.
Why XPeng will be the Winner?
I think the future of the Car market will be solely based on two factors.
- Cost of Owning it.
- Self Driving Software.
Lesser the cost, the more chances that it will sell to the masses. The more reliable the auto drive, the more chances that it will sell to the masses. Technology will be the killer application for electronic vehicle in the future.
Even though, there are a ton of competitors out there, Tesla is going to be a winner in the western world and since China is the planet of its own, XPeng will be the winner in that remote planet.
XPeng is founded and run by very smart entrepreneur billionaires: He Xiaopeng and Xia Heng. They are both Computer science graduates and have good track record.
Heng is tasked with the company’s strategic planning and product architecture design. The company initially focused on research and development for new core technologies for use in motors, batteries, electronic control systems and center-display touch screens. Heng recruited former employees from Guangzhou Automobile, BMW, Lamborghini, BYD, ALi, Tencent, Huawei, and Samsung.
At this state of the company, all one can do is simply rely on its managers. And those managers seem reliable.
The company lost $169 million with Revenue of $293 million in Q3 of 2020. Its Market Capitalization reached $53 billion today.
Here is the full financial picture.
“Our commitment to innovation through end-to-end in-house R&D and data-driven capabilities is the cornerstone of our business. This will not only keep XPeng at the forefront of the technologies of Smart EV but also position us well in capturing the significant growth potential in the Smart EV industry. Looking ahead, XPeng will continue to capitalize on its core strengths in technology, while heightening sales and marketing efforts, further enhancing manufacturing capability, and developing our global strategy,” Mr. He concluded.
The stock is skyrocketing since its IPO in the New York Stock Exchange. The Company closed its initial public offering of 114,693,333 American depositary shares (“ADSs”), each representing two Class A ordinary shares, on August 31, 2020. At a price to the public of US$15.00 per ADS, the total offering size was over US$1.72 billion. The number of ADSs issued at closing included the exercise in full of the underwriters’ option to purchase 14,959,999 additional ADSs to cover over-allotments.
This author was stupid enough to pour his hard earned money into this unprofitable, high risk endeavor. A month after the speculation, there certainly is some relief after the stock is up 214%.
I bought its stocks at IPO at $22.5 per ADS, today it sells for $71.55 per ADS. I believe although Tesla is a market leader and is led by a good manager, it is way too expensive to buy now.
It is a pure speculation. There is no ground for any value analysis. A percent of my portfolio goes into any heart wrenching, wild and futuristic movement. XPeng was crazy enough to receive that award.
XPeng is Tesla look-a-like in looks, design and software. By the way, there is a legal case by Tesla against XPeng that one of the Tesla’s employee stole Tesla’s auto drive software and he now works for XPeng!
Don’t assume that I am killing the stock market. Come back for a post to see how I lost 60% of my investment in one of the worst investment of my career.
XPeng Business Outlook
For the fourth quarter of 2020, the Company expects:
- Deliveries of vehicles to be approximately 10,000 vehicles, representing a year-over-year increase of approximately 210.8%.
- Total revenues to be approximately RMB2,200 million, representing a year-over-year increase of approximately 243.7%.
Disclaimer: Long XPeng.