Chinese EV maker XPeng Motors (XPEV) released its second-quarter earnings Friday, showing a rebound in revenue but record losses. Meanwhile, the recently launched XPeng G6, viewed as a Tesla Model Y rival, is already “turbocharging” sales growth.
XPeng (XPEV) losses grow in Q2, despite higher revenue
XPeng delivered 23,205 vehicles in the second quarter, up 27.3% from the first three months of the year but still down 36% from last year.
After peaking in the fourth quarter of 2022, XPeng’s revenue has nearly consistently fallen quarter-over-quarter, yet the EV maker saw a rebound in Q2.
XPeng’s revenue climbed 25% QoQ to RMB 5.06 billion (roughly $700,000) in Q2, but that’s still down 31% from last year. Furthermore, the EV maker’s gross margins fell back into negative territory (-3.9%) compared to 10.9% last year and 1.7% from the first quarter. Vehicle margin also fell to (-8.6%).
As a result, XPeng posted its largest loss of RMB 2.80 billion ($385,000) since going public in August 2020.
The growing losses come as XPeng faces stiff competition with EV makers like BYD, Tesla, NIO, and others in its home market.
XPeng slashed prices on its most popular EVs in January following drastic price cuts from Tesla that triggered an “EV price war,” which is a primary reason for the growing losses.
Tesla just cut prices again on its Model Y and Model 3 in China this week, putting further pressure on EV makers like XPeng with rival EVs.
Tesla Model Y rival XPeng G6 Coupe SUV to boost sales
Despite the record loss, XPeng remains hopeful that its G6 Coupe SUV will help boost sales and margins as a Tesla Model Y competitor. XPeng launched the G6 in late June, priced between RMB 200,000 ($28,500) and RMB 276,900 ($38,000) with up to 469 miles CLTC range.
Compared to the Model Y, priced between 263,900 yuan ($36,000) and 349,900 yuan ($48,000) with up to 338 miles (545 km) CLTC range, the XPeng G6 may have a market. He Xiaopeng, chair and CEO of XPENG, stated:
XPENG G6, our first strategic model built on SEPA 2.0, has quickly become one of the best-selling models following its official launch in June, turbocharging our sales growth momentum. I believe the success of the G6 is just the beginning and moving forward, a wider range of SEPA2.0-enabled models will be brought to our customers.
XPeng expects to deliver between 39,000 and 41,000 in the third quarter, representing an increase of nearly 40%. The company delivered 11,008 vehicles in July, meaning it sees deliveries reaching between 27,992 and 29,992 over the next two months.
Meanwhile, XPeng anticipates revenue to continue trending upward, projecting between RMB 8.5 billion ($1.17 billion) and RMB 9 billion ($1.2 billion) in Q3.
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