Shanghai (ZXZC)- XPeng Inc., a prominent Chinese smart electric vehicle company, revealed its unaudited financial results for the second quarter of 2023 (Q2 2023).

The company reported total revenues of 5.06 billion yuan (US$0.70 billion) for Q2 2023, marking a 31.9% decrease from the 7.44 billion yuan recorded in the same period of 2022. However, it also represents a notable 25.5% rise from Q1 2023's 4.03 billion yuan.

Photo credit: XPeng

Vehicle sales generated revenues of 4.42 billion yuan (US$0.61 billion) for Q2 2023, signifying a 36.2% year-on-year decrease from the corresponding period in 2022, yet still reflecting a 25.9% increase from Q1 2023. The decline in the year-over-year comparison primarily owes itself to decreased vehicle deliveries and the discontinued new energy vehicle subsidies. Conversely, the quarter-over-quarter growth stems mainly from elevated vehicle deliveries of the P7i model.

XPeng recorded a delivery volume of 23,205 vehicles in Q2 2023, representing a 27.3% quarter-on-quarter jump, but facing a 32.6% year-on-year decline.

The gross margin for Q2 2023 was less favorable, standing at a negative 3.9%, compared to the 10.9% in the same period of 2022 and the 1.7% in Q1 2023.

The company's vehicle margin, indicating profit from vehicle sales, came in at negative 8.6% for Q2 2023. This contrasts with the 9.1% in Q2 2022 and the negative 2.5% in Q1 2023. The decline was attributed to inventory write-downs and losses on inventory purchase commitments related to the G3i, which negatively impacted vehicle margin by 4.5 percentage points. Moreover, increased sales promotions and the expiry of new energy vehicle subsidies also led to the decrease.

Despite these challenges, XPeng’s R&D expenses increased by 8.1% to 1.37 billion yuan (US$0.19 billion) for Q2 2023, reflecting the company's commitment to enhancing its product competitiveness for future growth.

XPeng also reported a loss from operations of 3.09 billion yuan (US$0.43 billion) for Q2 2023, a rise from the 2.09 billion yuan in Q2 2022 and the 2.59 billion yuan in Q1 2023.

The company’s net loss for Q2 2023 reached 2.80 billion yuan (US$0.39 billion), compared to the 2.70 billion yuan in Q2 2022 and the 2.34 billion yuan in Q1 2023.

Looking ahead, XPeng anticipates its vehicle deliveries range between 39,000 and 41,000 units for Q3 2023, marking a year-over-year increase of approximately 31.9% to 38.7%. Its Q3 revenues are expected to fall in the range of 8.5 billion yuan and 9.0 billion yuan, reflecting a year-over-year increase of around 24.6% to 31.9%.