Xpeng plants

Shares in Xpeng (XPEV) rose following news of the company's plans to double its production capacity from 100,000 to 200,000 electric cars a year to increase competition with Li Auto, Nio and Tesla in China.

Shares of Xpeng (XPEV), the Chinese electric car maker, rose 2% on the NYSE premarket on Wednesday after the company said it had embarked on plans to double its production capacity from 100,000 to 200,000 electric cars a year.

Shares in Xpeng, a company with a market capitalisation of $33bn, rose 38.6% in the latest quarter but are down 11.6% YTD.

In a press release, the company wrote: "XPeng today begins the second phase of its smart electric vehicle manufacturing base expansion project in Zhaoqing."

On 1 August, XPeng reported deliveries of its electric cars in July, which were lower than its larger rival Li Auto (LI) for the second consecutive month. From the start of 2021 to 31 July, XPeng's total deliveries reached 38,778 units, an increase of 388% over the same period last year. Li's similar figure is still slightly lower at 38,743 units, but the company is ahead of the rate of increase in deliveries over the past two months.

XPeng is selling the XPeng P7 electric sedan and XPeng G3 SUVs, and is preparing to ship the P5 sedan with a new autopilot at a cheaper price than the Tesla Model 3.

The doubling of XPeng's production capacity should help the company compete with both Li Auto and Nio (NIO) and Tesla (TSLA) in China.

The expansion of XPeng's production capacity is likely to have been made possible by the company raising the equivalent of $1.8bn following a double listing of its shares on the Hong Kong stock exchange in July.

Rival Li Auto also announced plans for a dual primary listing in Hong Kong in early August. XPeng will release its financial results for the second quarter of 2021 on Thursday, 26 August, before the market opens.