Photo: Xpeng Motors
Chinese electric vehicle (EV) manufacturer XPeng has reported a significant drop in sales for the first quarter of 2023. The company’s revenue for the quarter was RMB 4.03 billion ($590 million), marking a staggering 45.9% decrease compared to the same period last year, and a 21.5% sequential decrease from Q4 2022.
The company’s net loss for the first quarter was RMB 2.34 billion ($340 million), slightly less than the RMB 2.36 billion loss reported in Q4 2022 but still higher than the RMB 1.70 billion loss from the same period last year, reports Yahoo Finance.
XPeng’s total deliveries for the quarter were 18,230, a sharp 47.3% drop from the 34,561 cars delivered a year ago, and a 17.9% decrease from the 22,204 reported in Q4 2022. The company anticipates that deliveries for Q2 will be between 21,000 and 22,000 units, which would represent a decrease of approximately 36.1% to 39.0% compared to a year ago.
The decline in XPeng’s deliveries follows price cuts from rival Tesla in the quarter, which led to XPeng and other Chinese automakers reducing their prices as well.
Despite the challenging quarter, XPeng Chairman and CEO He Xiaopeng remains confident in the company’s future. “During the first quarter of 2023, I took actions to make 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,” he said in a statement.
XPeng is banking on its new P7i sports sedan to boost sales. The company launched the P7i in March 2023 and has reported “strong order intake momentum” for the vehicle. XPeng also debuted its newest model, the G6 SUV, at the Shanghai Auto Show in April and plans to launch the vehicle at the end of Q2, with deliveries beginning immediately after launch.
Despite the current challenges, XPeng Vice Chairman and Co-President Brian Gu remains optimistic. “Going forward, our top priority remains to accelerate growth in sales and market share,” he said. “As the upcoming G6 launch and other new product launches fuel rapid sales growth, we expect our cash flow from operations to improve significantly.”
However, not everyone shares this optimism. Citi investment research analyst Jeff Chung expressed concerns about XPeng’s near-term prospects given its sales outlook. “The sales guidance of 21-22k units for 2Q23E is generally a miss given consensus expects a sequential MoM EV retail sales recovery at sector level for May/Jun/Jul versus Xpeng’s likely flattish MoM for May and Jun,” he wrote in a note to clients.
XPeng’s shares were down over 11% in early trading on Wednesday following the announcement. Shares of Chinese EV rival NIO saw its shares dip 9.49% by the closing bell.
