By Sherry Qin


XPeng's shares rose after the Chinese electric-vehicle maker disclosed plans to launch a cheaper mass-market brand amid intensified competition in China's EV market.

The automaker's Hong Kong-listed shares rose as much as 6.3% before paring gains to 4.4% at 39.45 Hong Kong dollars (US$5.04) on Monday afternoon.

The Guangzhou, China-based startup plans to launch a new brand within the next month offering cars in the 100,000 yuan-150,000 yuan (US$13,897-US$20,845) price range, said He Xiaopeng, XPeng's chairman and chief executive, at an industry meeting on Saturday, according to its official WeChat account.

XPeng said it will "gradually launch a series of new models under the brand with different levels of intelligent driving capabilities."

The company's current models are mainly priced in the CNY200,000-CNY300,000 range.

"The CNY100,000-CNY150,000 price range has great market potential," He said in a Weibo post on Saturday.

Competition in China's EV market is heating up as carmakers, led by BYD, continue to slash prices, while smartphone giant Xiaomi is slated to break into the market.

Last August, XPeng said it would acquire ride-hailing giant Didi's smart auto development assets for HK$5.83 billion and partner with Didi to launch a smart EV model under a new brand targeting the mass-market segment.

Separately, the EV maker also plans to introduce an artificial-intelligence model to its vehicles in the second quarter, and seeks to invest CNY3.5 billion in AI research and development and hire 4,000 more employees in 2024.

The model will be the industry's first mass-produced car to deploy in-vehicle AI and an in-vehicle cognitive engine, XPeng said.

XPeng, which has yet turn a profit, reported net loss of CNY3.89 billion in the third quarter despite a jump in vehicle sales. The EV maker is due to report fourth-quarter results Tuesday after market close.

He said after the company's third-quarter results that changes made in 2023 would "yield more positive results in 2024." Meanwhile, Co-President Hongdi Brian Gu said the company expects to report stronger free cash flow for the fourth quarter, "marking the starting point of our journey towards long-term scalable profitability."

However, Daiwa analyst Kelvin Lau said he doesn't expect XPeng to turn profitable in 2024. "More positive results may mean only narrowing loss," he said.


Write to Sherry Qin at sherry.qin@wsj.com


(END) Dow Jones Newswires

03-18-24 0215ET