An electric sport utility vehicle (SUV) G6 from XPeng Inc. The company hopes the introduction of the new car will boost sales, which slumped in the first quarter.
Qilai Shen | Bloomberg | Getty Images
Shares in a Chinese electric vehicle manufacturer Xpeng fell on Wednesday after the company reported earnings that fell below expectations and forecast a fall in auto sales.
Shortly after the US opening bell, Xpeng shares fell more than 11%.
Here’s how the company fared in the first quarter compared to Refinitiv’s consensus estimates:
- Revenue: 4.03 billion Chinese yuan (US$571.6 million) versus an expected 5.19 billion yuan. This corresponds to a decrease of 50% compared to the previous year.
- net loss: 2.34 billion yuan versus 1.9 billion expected. That was larger than the 1.7 billion yuan loss reported in the same quarter of 2022.
Xpeng forecast second-quarter deliveries of its vehicles to be between 21,000 and 22,000, down 36.1% to 39.0% year-on-year.
The company also forecast revenue of between 4.5 and 4.7 billion yuan in the second quarter, down between 36.8% and 39.5% year-on-year.
Xpeng has been impacted by a number of factors in its home market of China. The country abruptly scrapped its strict Covid-19 control measures in December. However, China’s economic recovery has been mixed and the data has been mixed. This weighed on consumer spending.
But the Guangzhou-headquartered company is also facing stiff competition in electric vehicles from other start-ups such as Li car And noo as well as established players like Tesla and endorsed by Warren Buffett BYD.
Read more about electric vehicles from CNBC Pro
Tesla has lowered prices in China to stimulate demand, which has also hurt Xpeng’s competitiveness.
Xpeng delivered 18,230 cars in the first quarter, down about 47% from the year-ago period.
The company has reorganized its management structure and restructured the business in recent months, hoping to unlock growth.
“During the first quarter of 2023, I took actions to make significant changes to our strategy, organizational structure and leadership team,” said He Xiaopeng, CEO of Xpeng, in a statement.
“I am fully confident that over the next few quarters we will lead our company into a virtuous cycle that drives product sales growth, team morale, customer satisfaction and brand reputation.”
Xpeng is preparing to launch its new sports utility vehicle called G6 this year to boost sales and brand image.
“As the upcoming G6 launch and other new product launches fuel rapid revenue growth, we expect our cash flow from operations to improve significantly,” said Brian Gu, co-president of Xpeng, in a statement.
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