(Reuters) – Electric-car maker Xpeng Inc priced its latest G6 sport utility vehicle about 20% lower than Tesla’s Model Y in China, sending its U.S.-listed shares up 7.6% in premarket trading on Friday.
U.S.-listed shares of its peers Li Auto and Nio also rose 0.3% and 2.2%, respectively, in trading before the bell.
Warren Buffett-backed BYD dominates the Chinese market and U.S. automaker Tesla is set to hit another record quarter in China, with sales in the country expected to increase 13% from the previous three months, analysts said.
China was the biggest market for Tesla’s Model Y electric sport utility vehicles in the first quarter of the year, helping it become the world’s top selling vehicle during the period.
Xpeng is pinning hopes on the new SUV to help turnaround its sales, after the company reported lackluster deliveries in May.
The price of Xpeng G6 starts at 209,900 yuan ($28,882.01), compared with Tesla Model Y’s starting price of 263,900 yuan in China.
“We do admit the G6 pricing strategy created a unique product segment of BEV (battery electric vehicle) SUV at the 200,000-230,000 yuan range which attracts customers wanting an entry level mid-sized BEV SUV but cannot afford a Tesla model-Y or Xpeng P7i,” Citigroup analysts wrote in a note.
Citigroup analysts expect 10,000 monthly unit sales of the SUV. Beijing’s 520 billion yuan tax break for new energy vehicle purchases is also expected to boost demand.
Tesla is expected to report as early as this weekend record global deliveries of 445,000 vehicles in April to June, according to average estimates of nine analysts polled by Refinitiv.
($1 = 7.2675 Chinese yuan renminbi)
(Reporting by Chavi Mehta in Bengaluru; Additional reporting by Brenda Goh; Editing by Krishna Chandra Eluri)
