What’s going on here?

Chinese EV upstart Xpeng is looking sore and sorry, after results that seem more like a shock to the system than a power surge.

What does this mean?

The EV industry is more crowded than a California freeway during rush hour, with established brands and ambitious startups all trying to outpace each other. And while BYD is cruising in the fast lane, Xpeng is experiencing some serious engine trouble. That hasn’t been helped by Tesla’s aggressive price slashing either, which keeps luring away potential customers.

The numbers showed the full damage: Xpeng’s deliveries last quarter were about half of those notched up at the same time last year – meaning both revenue and profit missed expectations by miles. Rubbing salt in that wound, Xpeng’s forecast for this quarter predicted a grim 40% drop in deliveries. So while the company said it’s rejigging its structure to boost growth, the reaction of investors was icy, and its shares dropped 11%.

Why should I care?

Zooming in: Xtinction event.

The firm once said it sees the global car industry shrinking to just ten big players over the next ten years – so if Xpeng doesn’t want to be Xpunged, it’s going to have a lot of work to do. In a nutshell, the company thinks Chinese carmakers need to sell about three million cars a year, and export a good chunk globally, to survive. That’s got it counting on its upcoming SUV launch to kickstart sales and rejuvenate its brand image. Great Xpectations, but let’s see if Xpeng actually delivers.

The bigger picture: Park those hopes.

China’s revving up to overtake Japan as the world’s top car exporter. But while Xpeng is steering towards Europe this year, US plans are parked for now due to frosty US-China relations. You can bet it’s not the only Chinese firm thinking that way either – and that could leave American drivers missing out on broader choices and potentially lower prices.