XPeng Stock Is Surging. It Expects ‘Stunning Cost Savings’ From New Platform.

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Shares of Chinese electric-vehicle maker XPeng soared on Monday after the company detailed plans for a new technology platform that it expects will sharply cut costs. 

XPeng

(ticker: XPEV) said its Smart Electric Platform Architecture 2.0 will shorten the research-and-development cycle for future models by 20% and reduce manufacturing costs, in a statement on Sunday. 

“It will make rapid advancements in technology available for our customers as standard, with faster software upgrades, stunning cost savings and elevated product experience,” Chief Executive He Xiaopeng said.

Cost reduction of that magnitude would be a game changer for XPeng and the EV industry. Electric vehicles are still more to purchase up front than gasoline-powered cars. EVs, however, are cheaper to maintain and electricity for recharging is far cheaper than gasoline currently.

American depositary receipts of XPeng were up more than 11% in premarket trading on Monday. ADRs of fellow Chinese EV maker

NIO

(

NIO

) were up more than 3%, Li Auto (LI) was up 4.80.

S&P 500
futures were up about 0.1%.

Nasdaq Composite
futures were down about 0.1%.

BYD

(1211. Hong Kong) stock closed up 2.2% in Hong Kong. XPeng’s Hong Kong-listed shares closed up 12.5%.

XPeng’s shares can use a boost. Deliveries have started to lag those of its peers. XPeng has delivered an average of about 6,000 EVs a month for the past three months. Li and NIO have delivered about 17,500 and 10,000 a month, respectively.

A year ago, XPeng was delivering about 11,500 a month. Li and NIO were delivering about 10,500 and 8,500 a month, respectively.

Coming into Monday trading, XPeng U.S.-listed ADRs were down about 63% over the past 12 months. NIO ADRs were down about 53%. Li ADRs were down roughly 5%.

XPeng’s fourth-quarter earnings fell short of expectations and management said at the time they were looking at restructuring to reduce costs.

Write to Adam Clark at [email protected]