Chinese electric vehicle maker XPeng reported higher quarterly earnings than analysts expected. XPeng shipments rose in the first quarter despite a shortage of semiconductors, with the company forecasting growth in the second quarter.
XPeng (XPEV) shares tumbled 4.9% in Thursday’s trading session, despite the automaker reporting strong financial results for the first quarter ended March 31 and forecasting growth for the current one.
XPeng shares are down 45% year-to-date but are up nearly 3% in early trading on Friday.
Commenting on the XPeng report, He Xiaopeng, chairman and chief executive officer of the company, noted record first-quarter shipments, “despite the seasonal decline in car demand and semiconductor shortages.”
The company also sees its “industry-leading autonomous driving technology” as its strength.
In April, XPeng Motors unveiled its P5 electric sedan with an improved autopilot system and LIDAR sensors for autonomous driving on city roads.
Key figures of the report
XPeng reported quarterly revenue growth to $ 450 million, up 616.1% from last year and 3.5% over the fourth quarter. Analytical expectations were lower at $ 440.4 million.
The company said the increase from the same period last year is mainly due to the delivery of P7 sedans, which began at the end of June 2020.
The increase from the previous quarter is mainly due to XPeng starting to generate revenue from its XPILOT 3.0 driver assistance software.
This is an important milestone for the company and XPeng management hopes that “XPILOT’s software monetization will become regular revenue as part of car revenue.”
Many leading carmakers are looking to replicate Tesla’s experience in selling software to improve the autonomous functions of their cars, which could represent a significant share of the recurring revenue of car companies with advanced technology.
At the same time, the young company still suffers losses: for the first quarter XPeng reported a loss of – $ 0.13 per share, which is better than analysts’ expectations of – $ 0.17 per share. Total losses for the quarter were $ 106.3 million, but this is lower than in the previous quarter and the same quarter a year ago.
New XPeng plant and new partnership
The automaker also highlighted a long-term strategic partnership with Zhongsheng Group, which has a strong dealer network. The partnership will help sell XPeng’s electric vehicles and provide services to the company’s customers in China.
In April, XPeng also signed an agreement with the Wuhan City authorities to build a new plant that will increase production. The company currently operates two factories in Zhaoqing. Together, both plants are capable of producing 200,000 vehicles per year. With the new Wuhan agreement, XPeng is increasing its production capacity to 300,000 units.
For the second quarter, Xpeng projects revenue growth of 475% to 492% year on year in local currencies.
The company also plans to deliver 15,500-16,000 electric vehicles, up about 18% from 13,340 units. in the first quarter, when shipments rose 2.9% from 12,964 units. in the fourth quarter.
Brian Gu, vice chairman and president of Xpeng, told CNBC on Friday that the company said the tense chip supply situation “will continue into the next quarter or so.”
The company is considering creating its own chips for autonomous driving systems.
China Passenger Car Association data for April 2021 showed that the best-selling new-energy vehicle in China was the budget-friendly Wuling Hongguang Mini EV, Tesla Model 3 ranked 2nd, Tesla Model Y, which began shipping in China in January, fell to sixth place. The Nio ES6 came in 13th and the Xpeng P7 sedan in 14th.