Saturday, 16 October 2021

XPeng Is a More Sustainable EV Maker Than Even Tesla


It turns out that Tesla might not be the world’s most sustainable car company. That mantle—for the moment—rests with Chinese electric vehicle maker XPeng .

XPeng (ticker: XPEV) published its first ESG report on Thursday. ESG is short for environmental, social and governance and companies publish ESG reports—sometimes called sustainability reports or impact reports—to tell stakeholders how their operations are impacting communities they serve.

Solid ESG reports are one less thing for investors to worry about. That’s good news for XPeng—the stock was rising about 2.8% in premarket trading Friday.

S&P 500 and Dow Jones Industrial Average futures were about 0.3% and 0.4%, respectively. Tesla (TSLA) shares have added about 0.5%.

XPeng’s inaugural report details the environmental benefits of an EV compared with a gasoline-powered car. Environmental benefits of electric cars probably don’t come as a surprise to anyone. The report also details actions taken by the company to improve vehicle safety, employee relations and corporate governance.

Tesla’s 2020 impact report detailed similar things as the XPeng report, including expected environmental statistics as well as efforts Tesla is making on diversity, inclusion and community development.

Those sustainability reports come right from the companies, but there are third-party ESG rating firms. Investment services firm MSCI is one of them. MSCI ratings range from AAA to CCC.

In September, Tesla had an A rating from MSCI, putting it, roughly, in the upper third of companies ranked. MSCI marked Tesla below average with respect to product quality and labor management.

XPeng, however, has an AA rating and is the “world’s highest-rated auto manufacturer,” according to Citigroup analyst Jeff Chung. “Highly praised by MSCI ESG Research was [XPeng’s] continuous commitment to deliver long-term sustainability-focused innovation,” added Chung in a Friday report

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