Chinese EV maker XPeng posts a record quarterly loss - PingWest

Chinese EV maker XPeng posts a record quarterly loss

Chinese EV maker XPeng posts a record quarterly loss

August 19, 2023 4:44 am

On Friday, Chinese electric vehicle (EV) maker Xpeng reported its largest quarterly loss since its initial public offering in August 2020.

The net loss amounted to 2.8 billion yuan ($384.53 million), surpassing the expected loss of 2.13 billion yuan. This figure exceeded the 2.7 billion yuan loss reported in the second quarter of the previous year.

Revenue reached 5.06 billion yuan, aligning with the anticipated 5.06 billion yuan, signifying a 31% year-on-year decrease.

The gross margin turned negative at 3.9%, a stark contrast to the positive 10.9% recorded during the same period in 2022.

Owing to a sluggish economy and lackluster consumer spending, automotive manufacturers are embroiled in fierce price wars to boost their sales figures. Just this week, Tesla cut prices on its Model Y and Model S vehicles and provided discounts on existing Model S and Model X inventory in China. Notably, the US EV firm cut prices multiple times throughout 2022 and 2023.

Xpeng has experienced a difficult period in 2022, with deliveries falling sharply due to multiple headwinds including supply chain issues.

It has shown signs of recovery in recent months. 23,205 vehicles were delivered in the second quarter, beating expectations and up 27% quarter-over-quarter. In July, the company delivered 11,008 vehicles, up 28% year-on-year.

Xpeng expects third-quarter revenue to be between $8.5 billion and $9 billion, a year-on-year increase of approximately 24.6% to 31.9%.

Last month, Volkswagen invested $700 million in Xpeng for a 4.99% stake. The two companies will jointly develop two electric cars for the Chinese market.

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