XPeng (XPEV), a major player in the Chinese electric vehicle (EV) market, is scheduled to deliver its earnings report tomorrow, an event that’s causing a significant movement in the stock market. The company’s shares are trending downward, a trend that’s been exacerbated by a general slump in the major market indices. There’s considerable bearish sentiment around XPeng’s expected revenue for the past quarter, with many attributing it to an ongoing price war in the EV sector, led by Tesla and followed by other EV makers. This price war is resulting in a race to the bottom, potentially signaling declining margins, and it’s unclear how this will impact XPeng’s top and bottom lines.
In addition to XPeng’s earnings report, tomorrow also marks the launch day for Nio’s (NIO) ES6 electric SUV. Nio’s launch event could influence investor sentiment and potentially drive more investors towards Nio, especially if the ES6 garners significant orders. These two key events could provide valuable insights into the health of the Chinese EV market, as XPeng and Nio are among China’s top pure-play EV options. Analysts will be closely watching the companies’ margins and bottom-line earnings. XPeng, in particular, might see a significant downside if its quarterly loss exceeds the expected 33-cent loss that analysts have predicted. As such, XPeng’s stock is expected to be quite volatile tomorrow.