On Wednesday, XPeng Inc (NYSE:
XPeng reported that its losses have increased
For the quarter ended Sept. 30, revenue rose 22% year over year to $1.17 billion, slightly below FactSet’s estimate of $1.19 billion. But this is XPeng’s first revenue gain since the third quarter of 2022 as well as a return to more than $1 billion in sales since the second quarter of 2022. Still, gross margin slipped to negative 2.7% from 13.5% in the comparable quarter of 2022. Cost of sales increased year-over-year and quarter-over-quarter to $1.2 billion, an increase of 48.4%. Although deliveries increased 72.4% from the second quarter, higher costs due to increased cost of sales and inventory write-downs led to wider losses. During the third quarter, XPeng lost 3.89 billion Chinese yuan, equivalent to approximately $530 million.
Outlook
XPeng expects its delivery guidance for the fourth quarter to be between 59,500 and 63,500. It has already reported a record 20,002 deliveries in October. XPeng will unveil its new EV on November 17 that will compete with Li Auto Inc’s (NASDAQ: LI) highly anticipated mega EV. XPeng generally targets lower priced consumers compared to Li Auto which is known for premium offerings, but that is about to change with its latest EV. Li Auto made a major achievement in October as it overtook Tesla with a sales record of 40,422 cars in October. Lee Auto also reported strong third-quarter results that were better than expected. Additionally, Li Auto said it expects deliveries to continue at this pace during the last three months of the year.
Despite intense competition, XPeng expects next year to be better
While XPeng’s third quarter was defined by declining revenues and weak gross margins, China EV leader, BYD Co. Ltd. (OTC: BYDDY) reported record third-quarter earnings in late October. Additionally, BYD reported that its sales in October were double those of Tesla. October was the sixth consecutive month in which BYD recorded record deliveries, also surpassing the 300,000 milestone. With BYD consolidating its dominance in China, Li Auto unveils its mega EV, XPeng will have a tough job staying competitive, with its G6 electric SUV already challenging the Tesla Model Y in its first three months Became the world’s best-selling car during 1975. About 267,200 vehicles were sold this year. Tesla is also hoping that December will be the best time of year as Cybertruck deliveries are scheduled to begin in late November. However, Xpeng CEO He Xiaopeng said the changes the EV maker made at the beginning of the year will bring positive results next year and beyond.
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Source: finance.yahoo.com
