An XPeng Inc. G6 electric sport utility vehicle (SUV). The company hopes the release of the new car will boost sales which slumped in the first quarter.
Qilai Shen | Bloomberg | Getty Images
Shares of a Chinese electric vehicle company Xpeng fell on Wednesday after the company reported earnings that beat expectations and forecast a slump in car sales.
Xpeng shares fell more than 5% in premarket trading in the United States
Here’s how the company fared against Refinitiv’s consensus estimates for the first quarter:
- Income: 4.03 billion Chinese yuan ($571.6 million) vs. 5.19 billion yuan expected. This represents a 50% drop year over year.
- Net loss: 2.34 billion billion yuan against 1.9 billion expected. That was more than the 1.7 billion yuan loss recorded in the same quarter of 2022.
Xpeng expects its vehicle deliveries to be between 21,000 and 22,000 in the second quarter, representing a year-over-year decline of 36.1% to 39.0%.
The company also expects revenue of between 4.5 billion yuan and 4.7 billion yuan in the second quarter, down 36.8% to 39.5% year-on-year.
Xpeng was hit by a number of factors in its home market of China. The country abruptly discarded its strict Covid-19 control measures in December. However, China’s economic recovery has been uneven with mixed data. This weighed on consumer spending.
But the Guangzhou-based company also faces intense competition in electric vehicles from other startups like Li-Auto And Nio as well as established players like You’re here and backed by Warren Buffett BYD.
You’re here been lower prices in China to stimulate demand which has also weighed on Xpeng’s competitiveness.
Xpeng delivered 18,230 cars in the first quarterdown about 47% from the same period a year ago.
The company has revamped its leadership structure and restructured the business in recent months in hopes of unlocking growth.
“During the first quarter of 2023, I took steps to make decisive changes to our strategy, organizational structure and management team,” He Xiaopeng, CEO of Xpeng, said in a statement.
“I am fully confident to lead our company in a virtuous cycle driving product sales growth, team morale, customer satisfaction and brand reputation in the coming quarters.”
Xpeng is gearing up to launch its new sport utility vehicle called G6 this year in a bid to boost sales and its brand image.
“As the upcoming G6 launch and other new product launches fuel rapid sales growth, we expect our operating cash flow to improve significantly,” Xpeng co-president Brian Gu said in a statement. communicated.