Xpeng Motors G6 electric sports utility vehicle (SUV). The company is hoping the launch of the new vehicle will boost sales that plummeted in the first quarter.
Shen Qilai | Bloomberg | Getty Images
Stocks of Chinese electric car companies Xpeng Shares fell on Wednesday after the company reported lower-than-expected profit and forecast a plunge in auto sales.
Shortly after the U.S. open, Xpeng shares fell more than 11 percent.
Here’s how the company performed in the first quarter compared to Refinitiv consensus estimates:
- income: 4.03 billion yuan ($571.6 million), compared with expectations for 5.19 billion yuan. This represents a 50% year-over-year plunge.
- Net loss: 2.34 billion yuan, expected to be 1.9 billion yuan. This is larger than the 1.7 billion yuan loss reported in the same quarter in 2022.
Xpeng expects its second-quarter vehicle deliveries to be between 21,000 and 22,000 units, down 36.1% to 39.0% year-over-year.
The company also expects second-quarter revenue of between 4.5 billion yuan and 4.7 billion yuan, a year-on-year decline of 36.8% to 39.5%.
Xpeng Motors has been hurt by a combination of factors in its home market of China. The country abruptly lifted its strict Covid-19 control measures in December. However, China’s economic recovery is uneven with mixed data. That has put pressure on consumer spending.
But the Guangzhou-based company also faces stiff competition in the EV space from other startups such as ideal car and Nioh and veteran players like tesla backed by Warren Buffett BYD.
tesla Prices have been cut in China to boost demand, which has also weighed on Xpeng’s competitiveness.
Xiaopeng Motors delivered 18,230 vehicles in the first quarter, a year-on-year decrease of about 47%.
The company has been restructuring its management structure and restructuring the company over the past few months in an attempt to unlock growth.
“In the first quarter of 2023, I took action to decisively adjust our strategy, organizational structure and senior management team,” Xiaopeng CEO He Xiaopeng said in a statement.
“I have every confidence in putting our company on a virtuous cycle over the next few quarters, driving product sales growth, team morale, customer satisfaction and brand reputation.”
Xpeng is preparing to launch its new sports utility vehicle called the G6 this year in a bid to revive sales and brand image.
“With the upcoming G6 and other new product launches driving rapid sales growth, we expect our cash flow from operations to improve significantly,” Xpeng co-president Brian Gu said in a statement.