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Quarterly in deep red for Xpeng, the ambitious Chinese manufacturer of electric cars. The Guangzhou-based startup posted a net loss of 2.80 billion yuan ($380 million) in the three months ended June 30. Market estimates were 2.1 billion yuan. This is a greater red than the 1.77 billion yuan in the same quarter in 2022. The stock on Wall Street loses more than 6% after gaining 60% in the last 6 months.
The automaker delivered 23,205 cars, exceeding the original forecast of 21,000-22,000 units. But while posting a 27% quarter-on-quarter increase, the company’s shipments were down 33% from the same period a year ago. Revenue fell 32% to 5.06 billion yuan, topping analyst forecasts of 4.91 billion yuan. In short, the net loss is due to the collapse of sales.
Xpeng is now observed special of the markets. The gross margin of the vehicle sales business decreased to a negative 8.6% compared to a positive 9.1% in 2022, due to inventory write-downs, increased sales promotions and the end of subsidies for electric vehicles. The company was forced to postpone its profitability goal to 2025.
Now, however, the Chinese electric car manufacturer is relaunching with the forecast of a recovery in revenues in the third quarter. The bet is on the G6, an SUV launched at the end of June to challenge Tesla’s oversold Model Y and conquer market share while the price war rages, with the recent price cuts of Tesla itself and the Zeekr brand, controlled by Geely .
Xpeng expects to deliver between 39,000 and 41,000 vehicles in the three months ending September 30 and record revenue of between 8.5 billion and 9 billion yuan, up 32% year-on-year. “With the G6 SUV and other new products accelerating sales growth, we expect gross margin to gradually recover while operational efficiency and cash flow should improve,” said Brian Gu, honorary vice president and co-president of Xpeng. .