Shares of China’s XPeng were trading lower in the US ahead of trading after the electric vehicle company forecasted significantly lower vehicle deliveries for the second quarter.

Shares of Chinese electric vehicle (EV) giant XPeng Motors (NYSE: XPEV) fell 5%, after losing first-quarter earnings and a grim delivery forecast. XPeng shares plunged in US premarket trading after the company reported a 50% year-over-year (YoY) decline in first-quarter revenue.

The company posted revenue of 4.03 billion Chinese yuan ($571.6 million), compared with the 5.19 billion yuan analysts had expected. For the first quarter of 2023, Tesla’s Chinese rival also suffered a net loss of 2.34 billion yuan, versus the 1.9 billion expected.

XPeng’s latest quarterly deficit surpassed the 1.7 billion yuan loss suffered in the same quarter last year. XPeng Chairman and CEO, He Xiaopeng, weighed in on the company’s quarterly performance, saying the following:

“During the first quarter of 2023, I made changes to our strategy, organizational structure, and senior management team decisively. I am fully confident in taking our company into a virtuous cycle, driving product sales growth, team morale, customer satisfaction, and brand reputation over the next few quarters.”

XPeng Forecasts Lower Second Quarter Vehicle Deliveries and Rising Revenues Amid Stock Slide

With the shares currently trading at $9.11, XPeng forecasts at most 22,000 vehicle deliveries in the second quarter. The company’s latest restricted delivery guidance of between 21,000 and 22,000 EVs represents a year-over-year decrease of 36.1% to 39.0%.

In addition, XPeng’s forecasted second-quarter revenue of 4.5 billion yuan to 4.7 billion yuan represents a year-on-year decline of 36.8% to 39.5%. However, he remained optimistic about the company’s prospects, especially regarding its soon-to-be-launched G6 SUV.

The EV rolls off the assembly line next month, and the XPeng CEO believes it will become a popular and best-selling model in China. Meanwhile, XPeng Honorary Vice President and Co-Chairman Hongdi Brian Gu stressed the company’s commitment to achieving sustained profitability in a saturated market. Gu commented on the issue as follows:

“[As we advance], our top priority remains to accelerate growth in sales and market share. As the upcoming G6 launch and other new product launches fuel rapid sales growth, we expect our cash flow from operations to improve significantly.”

XPeng’s recent underperformance is due to weakening macroeconomic parameters in China. This includes mixed consumer spending in an uneven economy still reeling from strict Covid protocols.

In addition, the Guangdong-based EV maker has also ceded some of its market shares to increasing competition from other EV companies.

Although Tesla recently increased the prices of some of its EV models, the company’s previous price cuts hurt XPeng’s competitiveness.

Europe Push

In early February, XPeng, amid increasingly intense competition at home and abroad, launched its flagship electric vehicle models in Europe. The push abroad serves to increase the visibility of the Chinese company’s brand, thereby gaining potentially lucrative overseas market share.

On February 3, XPeng launched its P7 sedan and G9 SUV in Denmark, the Netherlands, Norway, and Sweden. At the time of the European launch, the Chinese EV maker priced its P7 sedan below Tesla’s EVs.

By Audy Castaneda


Please enter your comment!
Please enter your name here