Shares of XPeng Inc. (NYSE: XPEV) have taken a sharp dive of 7.54% in pre-market trading this Friday. The drop follows the release of the company’s second-quarter earnings report, which unveiled a wider-than-expected loss and a considerable decline in revenue compared to the previous year.
The EV startup, often seen as a rival to Tesla, Inc. (NASDAQ: TSLA), revealed that its second-quarter FY23 sales had plummeted by 31.9% year-on-year, to RMB5.06 billion ($698.2 million). This figure beat the market consensus of $694.3 million, albeit only slightly.
XPeng reported a non-GAAP net loss per ADS of $0.43, missing the consensus loss of $0.31. In addition, the quarterly vehicle deliveries plummeted by 32.6% year-on-year to 23,205 units.
Revenues from vehicle sales also took a hit, down by 36.2% year-on-year to $610.2 million. The slump in sales was attributed to reduced vehicle deliveries and the discontinuation of new energy vehicle subsidies.
Gross margin loss widened to (3.9%), compared to 10.9% from the previous year. Similarly, vehicle margin loss deepened to (8.6%), compared to the 9.1% recorded a year ago. The operating loss for the quarter stood at $426.2 million.
On a positive note, the company did disclose having $4.65 billion in cash and equivalents.
Outlook: XPeng Inc. (NYSE: XPEV) projects its Q3 deliveries to reach 39,000 to 41,000 units, indicating a year-over-year increase of approximately 32% to 39%. Analysts at Deutsche Bank had projected around 40,000 electric vehicle deliveries for the same period.
The startup is also optimistic about its revenue outlook, with a projected range of RMB8.5 billion to RMB9.0 billion ($1.17 billion to $1.23 billion) for the upcoming quarter. This guidance implies a potential year-over-year growth of about 25% to 32% in local currency terms.
Meanwhile, Wall Street analysts anticipated Q3 revenue of $1.329 billion, suggesting a 39% increase compared to the previous year.
As of press time, XPeng stock is trading at $14.45, down -7.67% compared to the previous trading session.
Kevin Putnam is a financial journalist and editor based in New York. He specializes in editing news and analysis related to U.S. stock market.
