Xpeng stabilizes cash flow over Q2, now aims for profit turnaround
The Chinese electric car manufacturer Xpeng increased its sales in the second quarter of 2023 compared to the first quarter, but also its losses. The turnaround is expected to come in the current quarter, for which Xpeng forecasts a significant increase in deliveries and sales.
Between April and June, Xpeng’s sales amounted to 5.06 billion yuan (about 636 million euros), according to the quarterly figures now presented. That is 25.5 per cent more than from January to March 2023, but 31.9 per cent less than the same period in 2022.
The background is that Xpeng has been posting rather weak financial figures since the middle of last year due to a restructuring. In the first quarter of this year, the turnaround was not yet successful. In the second quarter, which has now been presented, Xpeng stabilised somewhat given the renewed increase in turnover but has not yet returned to its previous performance.
The company remains clearly in the red, as Xpeng posted a net loss of 2.8 billion yuan (352 million euros) in the second quarter, compared to 2.34 billion yuan in the first quarter of 2023 and 2.7 billion yuan in the same quarter last year.
Xpeng was able to increase sales somewhat again. The 23,205 electric cars delivered in Q2/2023 represent an increase of 27.3 per cent compared to the first three months of the year. In the same quarter of the previous year, however, 34,422 Xpeng electric cars were delivered. The turnaround could come in the third quarter. For July 2023, the manufacturer has already announced 11,008 vehicles delivered. If it stays at this rate, Xpeng should again hand over more than 30,000 vehicles to customers in the current quarter. In its business outlook, the company even forecasts “39,000 to 41,000 deliveries” for the third quarter, as well as 8.5 to 9 billion yuan in sales.
“XPENG G6, our first strategic model built on SEPA 2.0, has quickly become one of the best-selling models following its official launch in June, turbocharging our sales growth momentum. I believe the success of the G6 is just the beginning and moving forward, a wider range of SEPA2.0-enabled models will be brought to our customers,” expresses He Xiaopeng, Chairman and CEO of Xpeng.
“Benefitting from the new products and supported by more efficient sales channels, our vehicle deliveries have posted sequential growth for six consecutive months,” adds Dr Hongdi Brian Gu, Honorary Vice Chairman and Co-President of Xpeng. “With the G6 and other new products accelerating sales growth, we expect gross margin to gradually recover while operating efficiency continues to improve and free cash flow to substantially improve.”
The annual report also mentions the cooperation agreement signed between the Volkswagen brand and Xpeng in China at the end of July. He Xiaopeng added, “Along with our unwavering commitment to advancing technology innovation over the past 9 years since our establishment, we’ve created meaningful breakthroughs in commercializing our industry-leading full-stack EV platform and smart technologies, both developed in-house. This is clearly evidenced by the increasing ADAS adoption among our customers and our strategic partnership with Volkswagen, a world-leading carmaker.”
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