XPeng Narrows Quarterly Loss as Revenue, Margins Grow
The company maintained double-digit gross margins, which rose to 14.0% in the second quarter
XPeng’s XPEV 3.75%increase; green up pointing triangle second-quarter net loss narrowed on stronger electric-vehicle sales, higher revenue from its collaboration with Volkswagen and improved margins.
The Chinese EV maker posted a quarterly net loss of 1.28 billion yuan, equivalent to $179.4 million, compared with 2.80 billion yuan a year earlier.
Excluding share-based compensation expenses and other items, XPeng’s adjusted net loss was 1.22 billion yuan during the quarter, narrowing from 2.67 billion yuan a year ago, it said Tuesday.
Revenue for the period climbed 60% to 8.11 billion yuan, largely in line with the 8.12 billion yuan estimate in a FactSet poll of analysts. XPeng attributed the higher revenue to increased vehicle deliveries. It said its partnership with Volkswagen also helped, with revenue from services and others doubling to 1.29 billion yuan.
The company maintained double-digit gross margins, which rose to 14.0% in the second quarter from 12.9% in the first quarter. Its gross margin was a negative 3.9% a year earlier.
The improved gross margin was driven by “cost reduction through technical improvement and revenues from technical collaboration in our strategic partnership with Volkswagen,” the company said.
XPeng said more new models and upgraded versions are coming over the next three years.
“We are about to enter into a strong product cycle,” Chief Executive Xiaopeng He said.
The Chinese EV maker, known for its autonomous-driving technology, is set to reveal the price tag for the Mona M03 next week. Sales of the new model, which is aimed at competing with mass-market rivals, will be keenly watched. Citi analysts said in a recent note that low sales of the electric car could drag the company’s bottom line in 2024.
Shares in the company have halved this year amid a brutal price war in China’s EV market and cooling auto demand on overall subdued domestic consumption.
The Guangzhou-based company delivered 30,207 vehicles in the second quarter, in line with its guidance for 29,000-32,000 units.
For the third quarter, the EV maker forecast deliveries to rise 2.5%-12.5% from a year earlier to 41,000-45,000 vehicles and revenue to increase 6.7%-15% to between 9.1 billion yuan and 9.8 billion yuan.
XPeng has yet to turn a profit since its founding a decade ago. The company is seeking to leverage its advances in autonomous-driving technology as it works to boost production in the world’s most competitive EV market.