Wall Street Breakfast Podcast: XPeng Unveils Mass-Market EV

Listen below or on the go on Apple Podcasts and Spotify

XPeng (XPEV) gains on launch of mass-market car Mona, targeting budget-conscious segment. (00:58) Klarna improves profits as AI takes over jobs. (01:41) GM, Samsung SDI (OTCPK:SSNLF) ink deal for $3.5B EV battery plant in Indiana. (03:01)

This is an abridged transcript of the podcast.

We’ll begin with a rundown on our coverage of Nvidia (NVDA). If you check out the Wall Street Breakfast newsletter, our daily one-page news summary, you’ll find an earnings preview. Also, the Wall Street Lunch podcast will be a little late today. We’ll have a special edition of Wall Street Lunch hosted by Kim Khan right after Nvidia (NVDA) reports earnings.

Chinese electric vehicle-maker XPeng (NYSE:XPEV) has launched its new mass-market car brand, Mona, with prices starting at $16,812 which is significantly lower than its previous offerings.

XPeng’s (XPEV) stock on the U.S. exchange closed 6.5% higher on Tuesday, while its Hong Kong-traded shares gained 3% today.

CNBC reported that orders for the Mona M03 electric coupe exceeded 10,000 in 52 minutes after the car’s formal launch in Beijing.

The M03 sedan has a range of 515 km and is expected to mount a challenge to rivals like BYD (OTCPK:BYDDF), Tesla (TSLA), and NIO (NIO), among others.

Artificial intelligence is taking over jobs at Klarna (KLAR), with the buy now, pay later company expecting a further reduction in its workforce.

The new technology is helping the company cut costs and improve profits.

Klarna (KLAR) said its AI assistant performs the work of 700 employees, reducing the average resolution time from 11 minutes to just two.

This has driven a 73% increase in average revenue per employee to SEK 7M ($688,058) in the first half of the year from SEK 4M ($393,176) in the year-ago period.

Klarna (KLAR) has already reduced its workforce from 5,000 to 3,800 in the past year. “Not only can we do more with less, but we can do much more with less,” CEO Sebastian Siemiatkowski told the Financial Times. “Internally, we speak directionally about 2,000 (employees). We don’t want to put a specific deadline on that.”

The company, which already has a hiring freeze in place for workers other than engineers, is relying on natural attrition rather than layoffs to reduce its workforce.

Klarna (KLAR) is working on a U.S. initial public offering, which could happen in the first quarter of next year. Siemiatkowski declined to comment on the IPO plans. “We have not yet taken any decisions. It will happen in due course.”

South Korean battery maker Samsung SDI and American automaker General Motors (NYSE:GM) have finalized an agreement to build a joint electric vehicle battery manufacturing facility in Indiana.

The two companies first announced their plans in April 2023.

GM and Samsung will collectively invest about $3.5B to construct a new battery cell production plant with an initial annual capacity of 27 gigawatt hours ((GWh)). The facility aims to commence mass production by 2027 and potentially increase the annual capacity to 36 GWh.

The new plant will make nickel-rich prismatic batteries to be deployed in upcoming GM (GM) EVs. The joint venture will be located in New Carlisle, Indiana, on a 680-acre site and is expected to create more than 1,600 jobs.

Samsung Electronics (OTCPK:SSNLF) is the parent organization for Samsung SDI.

More articles on Seeking Alpha:

FDA approves Illumina’s TruSight Oncology biomarker test

Warren Buffett’s Berkshire Hathaway may soon join the $1T club

NFL greenlights private equity stakes in teams for the first time

Catalyst watch:

• The HSR review period by the Federal Trade Commission for Boeing’s (BA) acquisition of Spirit AeroSystems (SPR) is set to expire.

• Super Micro Computer (SMCI), AMD (AMD), Micron (MU), Microsoft (MSFT), Expedia (EXPE), Mastercard (MA), and Visa (V) are some of the companies that will participate in the two-day Deutsche Bank Technology Conference.

• CrowdStrike (CRWD) will host a conference call to discuss its financial results at 5pm. Analysts expect more details from CrowdStrike management about the impact of the faulty software update that caused global outages.

• Nvidia (NVDA) will hold its earnings conference call at 5pm. Options trading implies an 8% share price move after the report. Shares rallied 9% the day after the last earnings report. The stocks with the highest trading correlation to Nvidia (NVDA) on earnings day include Taiwan Semiconductor Manufacturing (TSM), Micron (MU), and ASE Technology (ASX). Fabrinet (FN) also frequently moves in tandem with Nvidia (NVDA) on earnings day. Tesla (TSLA) was mentioned during Nvidia’s (NVDA) Q1 earnings call as a significant Blackwell time-to-market customer.

Now let’s take a look at the markets as of 6 am. Ahead of the opening bell today, Dow, S&P and Nasdaq futures are in the green. Crude oil is down 1.1% at $74/barrel. Bitcoin is down 3.8% at $59,000.

In the world markets, the FTSE 100 is flat and the DAX is up 0.7%.

The biggest movers for the day premarket: Nordstrom (NYSE:JWN) is up 8% following the release of its strong Q2 financial results and an upward revision of its FY2024 guidance.

On today’s economic calendar:

• 2:00 pm Treasury Buyback Results

• 6:00 pm Fed’s Raphael Bostic will speak on the Economic Outlook in a moderated conversation at the Stanford Club of Georgia

Editor’s Note: This article discusses one or more securities that do not trade on a major U.S. exchange. Please be aware of the risks associated with these stocks.