Shanghai (ZXZC)- XPeng Inc., a leading Chinese smart electric vehicle (Smart EV) startup, on Wednesday released its unaudited financial results for the three-month period ended on March 31, 2023.

The company reported total revenues of RMB4.03 billion (US$0.59 billion) for the first quarter of 2023, indicating a decline of 45.9% year-on-year (YoY) and a decrease of 21.5% quarter-on-quarter (QoQ).

During the first quarter of 2023, vehicle sales generated revenues of RMB3.51 billion (US$0.51 billion), marking a decrease of 49.8% from RMB7 billion in the same period of 2022 and a decline of 24.6% from RMB4.66 billion in the fourth quarter (Q4) of 2022. The company said the YoY and QoQ drops were primarily due to lower vehicle deliveries and the discontinuation of the national new energy vehicle subsidies.

Photo credit: XPeng

XPeng delivered 18,230 vehicles in Q1 2023, which dipped from the 34,561 units for the prior-year period and the 22,204 units for the previous quarter.

In Q1 2023, the gross margin of XPeng Inc. stood at 1.7%, compared to 12.2% in Q1 2022 and 8.7% in Q4 2022.

During the same period in 2023, the company’s vehicle margin was negative 2.5%, whereas it was 10.4% in the year-ago period and 5.7% in the previous quarter. Both YoY and QoQ declines in vehicle margins were attributed to the increased sales promotions and the expiration of the aforementioned new energy vehicle subsidies.

Regarding R&D expenses, XPeng reported RMB1.30 billion (US$0.19 billion) for the Jan.-Mar. period of 2023, representing a 6.1% increase from the previous year and a 5.3% increase from the previous quarter. Both the YoY and QoQ increases were primarily driven by higher costs associated with the development of new vehicle models to support future growth.

For the first quarter of 2023, XPeng recorded a net loss of RMB2.34 billion (US$0.34 billion), in contrast to RMB1.70 billion in the same period of 2022 and RMB2.36 billion in the fourth quarter of 2022.

Excluding share-based compensation expenses, the Q1 2023 non-GAAP net loss reached RMB2.21 billion (US$0.32 billion), versus RMB1.53 billion in Q1 2022 and RMB2.21 billion in Q4 2022.

XPeng has provided its projections for the second quarter of 2023. The company expects its quarterly vehicle deliveries to be between 21,000 and 22,000 units, representing a year-over-year decrease of roughly 36.1% to 39.0%. Additionally, total revenues are projected to reach between RMB4.5 billion and RMB4.7 billion, which should slide 36.8% to 39.5% from a year earlier.