Xpeng, a Chinese manufacturer of electric vehicles, posted a wider-than-expected loss for the second quarter, which sent its Hong Kong-listed shares down more than 12% on Wednesday.
According to Xpeng, it anticipates delivering between 29,000 and 31,000 electric vehicles in the third quarter, an increase of between 13% to 20.8% year over year.
The market was anticipating a bigger figure.
The release of the G9 SUV in September and the introduction of two more models in 2023, according to Xpeng, will enable the company to begin a “growth cycle.”
The Chinese manufacturer of electric vehicles, Xpeng, disclosed a wider-than-expected loss for the second quarter and lukewarm delivery expectations on Wednesday, which sent its Hong Kong-listed shares down more than 12%.
Tuesday saw Xpeng disclose a net loss of 2.7 billion Chinese yuan ($403.2 million), which was higher than the 1.6 billion yuan consensus forecast from Refinitiv.
The business, which has its headquarters in Guangzhou, China, also stated that it anticipates delivering between 29,000 and 31,000 electric vehicles in the third quarter, indicating an increase of between 13% to 20.8% year over year.
The market was let down by that guidance.
“Well, the results for the second quarter weren’t too awful. Even somewhat better than what we anticipated, the revenue. Jiong Shao, an analyst at Barclays, said on Wednesday’s episode of CNBC’s “Street Signs Asia” that the earnings, or I should say loss, were less than what we anticipated.
The forward Q3 delivery projection, which is around 40% below our previous estimates, was the underlying issue, according to the statement. The stock price experienced this.
The sector is approaching a “pretty quiet season,” according to Xpeng President Brian Gu, and “traffic in the stores are fewer than what we’ve experienced before because (of the) post-COVID circumstances,” he said.
China had a revival of Covid-19 in the second quarter of the year. Major cities nationwide, including Shanghai, the nation’s financial centre, were shut down as a result of the authorities’ response.
New models to stoke growth
According to Xpeng, the G9, a new electric sports utility vehicle, will be officially unveiled next month, with deliveries starting in October.
Gu stated that the business anticipates that monthly deliveries of the G9 would surpass those of its premium P7 sedan in 2019. 6,397 P7 automobiles were delivered by Xpeng in July.
In 2023, Xpeng also intends to introduce two additional models.
Gu said that Xpeng should expand as a result of the new vehicles, the beginning of G9 deliveries, seasonal strength in the fourth quarter, and other factors.
This means that, according to Gu, “we do think there is a high likelihood and strong confidence that we are headed to a growth cycle, lead by our new product introductions.