Published - May 26th, 2023 @ 9:00 AM (GMT+2 )

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XPeng Inc. (NYSE:XPEV), a prominent contender in the electric vehicle industry and known competitor to Tesla Inc. (NASDAQ:TSLA), witnessed a significant setback in its financial performance for the first quarter of the fiscal year 2023. The company reported a year-on-year sales decline of 45.9%, bringing the total to RMB4.03 billion ($587.31 million), which fell short of the consensus estimate of $741.07 million.

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XPeng Inc. Reports Q1 Sales Decline Amidst Lower Vehicle Deliveries

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The company's quarterly vehicle deliveries experienced a 17.9% decrease year-on-year, totaling 18,230. This decrease significantly affected revenues from vehicle sales, which fell by 49.8% year-on-year. One of the primary reasons behind this was the discontinuation of new energy vehicle subsidies.

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XPeng's gross margin contracted by 1,050 basis points to 1.7%, with the vehicle margin contracting by 1,290 bps to (2.5)%. This resulted in an operating loss of RMB2.59 billion or $0.38 billion, a sharp contrast to last year's loss of RMB1.92 billion. 

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Despite the downturn, XPeng still holds a sizable amount of cash, totaling $4.97 billion. However, the non-GAAP net loss per ADS was RMB(2.57) or $(0.37), missing the consensus loss of $(0.26).

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XPeng Announces Launch of G6 Model Amidst Q1 Setbacks

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In an attempt to regain momentum, XPeng's Chairman and CEO, He Xiaopeng, announced the official launch of the G6 model in June 2023. This vehicle, the first production model built on XPeng's next-generation technology architecture SEPA2.0, is expected to become a popular choice in China's New Energy Vehicle (NEV) SUV market segment, with a price range between RMB200,000 to RMB300,000.

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Looking into the second quarter, XPeng anticipates vehicle deliveries to range between 21,000 and 22,000, a year-on-year decrease of 36.1% to 39.0%. The company also expects Q2 revenue to be between RMB4.5 billion ($657.7 million) and RMB4.7 billion ($686.9 million), representing a year-on-year decrease of 36.8% to 39.5%, which falls below the consensus of $1 billion.

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Following the release of the Q1 results, XPeng's shares traded lower by 5.6% at $8.60 in the premarket on the last check Wednesday.

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