Xpeng, a Chinese electric vehicle maker, has reported a significant improvement in its financials. The company’s shares surged over 10% after announcing the delivery of 94,008 vehicles in the first three months of this year, which is more than four times the sales volume from a year ago.
Key Financial Highlights
- Net Loss: Xpeng’s net loss for the first quarter narrowed to CNY 665 million (USD 95.8 million), compared to CNY 1.37 billion a year ago.
- Gross Margin: The company’s gross margin increased to 15.6% for the quarter, up from 12.9% a year earlier.
- Revenue Growth: Revenue more than doubled from a year earlier, driven by robust sales of its P7 sedan and strong demand for its G9 SUV in China and Europe.
Future Expectations
Analysts widely expect Xpeng to turn profitable in Q4 this year, thanks to strong sales momentum and a pipeline of new models.
- Q2 Deliveries: Deliveries of electric cars during Q2 are expected to reach between 102,000 and 108,000 units, representing an increase of approximately 238% to 258% compared to the prior-year period.
- Revenue Forecast: For Q2, Xpeng anticipates revenue between CNY 17.5 billion (USD 2.52 billion) and CNY 18.7 billion; the consensus was at USD 17 billion according to data compiled by LSEG.
Analyst Insights
- An analyst at UBS Group AG stated, "We are pleased with our progress so far this year."
- Another analyst at Credit Suisse Group AG noted, "XPeng is one step ahead on autonomous driving tech."
Autonomous Driving Plans
Xpeng aims to begin mass production of vehicles equipped with Level 3 autonomous driving features in China by the end of 2024, which would be a significant upgrade from the currently available Level 2 systems.
Summary of Financial Performance
- Net Income: Net income attributable to shareholders rose about fivefold sequentially.
- Gross Margin Expansion: Gross margin expanded about three percentage points sequentially, primarily due to a higher average selling price per vehicle sold during the quarter.
Xpeng’s stock rose as much as 11%, extending gains after quarterly results beat estimates. The Guangzhou-based carmaker’s strong performance reflects its growing presence in the electric vehicle market.
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