On the last trading day of November, Xpeng Motors, a leading player in the new energy vehicle (NEV) sector, captured headlines across the financial markets.

On November 30, shares of Xpeng Motors surged by 47.28%, inflating its market capitalization by nearly $2.99 billion, equivalent to approximately 21.1 billion yuanSuch an increase in the Chinese A-share market could be equated to a total of four trading limit ups.

This spike was significantly influenced by Xpeng's introduction of a limited-time price protection policy, which ignited a strong bullish sentiment among investorsAnalysts suggest that this new strategy might be an attempt to revitalize consumer interest, especially given the company's lackluster sales performance.

Despite the notable short-term rebound in stock price, Xpeng Motors remains in a tough spot, grappling with persistent financial losses and currently boasting the lowest sales target completion rate among its peers in the new energy vehicle landscape.

Amid rising operational costs, Xpeng is under pressure to sell more vehicles to improve profitabilityHowever, the previously popular model, the P7, seems unable to shoulder the burden, while the recently launched G9 model has seen only modest sales figures.

Once celebrated as a star automaker, Xpeng now finds itself losing its shine.

In a candid public interview, a journalist probed Xpeng’s founder, He Xiaopeng, asking, “How far behind are you compared to Elon Musk?” He confidently asserted, “We have no significant gap.”

When He Xiaopeng embarked on his second venture into the automotive industry, it is likely that he set high aspirations for himself to "prove" his capabilities once againYet, it is essential to understand that dreams often diverge from reality.

The year 2020 marked a significant turning point in the electric vehicle space.

In that year, after waiting 16 years, Tesla reported a profit of around 5.09 billion yuan for the first time

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This trend continued with earnings of approximately 38.98 billion yuan and 23.25 billion yuan in the first three quarters of 2021 and 2022, respectively.

Achieving profitability akin to Tesla remains an aspiration for Xpeng MotorsSince its IPO in 2020, the company has continuously operated at a lossData reveals that from 2020 to the first three quarters of 2022, Xpeng's net profit attributed to shareholders was -2.73 billion yuan, -4.86 billion yuan, and -6.78 billion yuan, respectively.

In the first three quarters of this year, Xpeng Motors sold approximately 98,500 vehicles, suggesting a staggering loss of roughly 68,800 yuan for each car sold.

The primary culprits behind the losses encompass rising raw material prices along with ongoing substantial investments in research and marketing expenses.

Publicly available data indicates that the spot price of battery-grade lithium carbonate has increased over nine-fold in the last two yearsAdditionally, research and marketing expenses exceeded 9.8 billion yuan and 13.1 billion yuan during the same timeframe.

For Xpeng to achieve profitability, it must leverage the benefits of scale to offset these costsHowever, as the second half of 2022 progressed, Xpeng experienced sluggish sales figures, burdened by rising operational costs that were not matched by corresponding increases in sales, plunging the company deeper into the red.

In the first half of 2022, the five leading new energy vehicle manufacturers were Xpeng, NETA, Li Auto, Leap Motor, and NIO, with sales figures of approximately 68,900, 63,100, 60,000, 51,900, and 50,800, respectively, placing Xpeng at the top.

However, upon entering the second half of the year, emerging second-tier automakers began to rise, with NETA overtaking Xpeng to take the lead and Leap Motor surpassing NIO for fourth place.

Between January and October 2022, Xpeng sold a total of 103,700 cars, falling to second place

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Its sales target for the year was set at 250,000 units, but by October, it had only achieved a completion rate of 41.48%. In contrast, NETA, Leap, NIO, and Li Auto all exceeded a completion rate of 57% during the same period.

Consequently, among the new energy vehicle manufacturers, Xpeng's rate of completion for its sales targets ranked at the bottom.

Note: The completion rate for sales targets is calculated as current sales divided by sales goals.

Xpeng has recently announced that it anticipates delivering between 20,000 and 21,000 cars in the fourth quarter of 2022, suggesting that its total annual sales will likely fall below 125,000, thereby only achieving at best half of its sales target for the year.

Traditionally, Xpeng’s sales growth has largely stemmed from the soaring popularity of its smart sports sedan, the P7.

The P7 was launched in April 2020, priced between 240,000 and 430,000 yuan, and its primary competitors include the BYD Han and the Tesla Model 3.

However, after more than two years on the market, the P7’s “golden era” appears to be nearing its end, and with newer models entering the sector, it is struggling to maintain its significant role.

Recent data shows that in the third quarter of 2022, deliveries of the P7 totalled 16,776 units, a 15% decline compared to 19,731 units during the same period in 2021.

In an effort to spur sales, Xpeng is pivoting towards the premium market segment.

In late September, the company launched the G9, priced above 300,000 yuan, with He Xiaopeng asserting that "the G9 is the best SUV under 500,000."

However, G9's launch was not smooth, suffering from consumer complaintsSome customers claimed, “Having test-driven the vehicle, the G9 does not perform as advertised; the UI interface is lacking, the space is too small, and the air suspension is average.”

Critics argue that the complaints reflect poor coordination among Xpeng's internal tech, product, and marketing departments

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