Xpeng stock has taken a sudden drop after the company’s Q1 23earnings missed expectations, and their forecast predicts a decline in sales. Xpeng’s stock dropped around 11 per cent due to the news.
So, what were the actual numbers?
On revenue, the company was expected to deliver ¥5.19 billion but instead only did ¥4.03 billion. This is a year-over-year drop of 50 per cent. While on net losses, Xpeng had ¥2.34 billion while analysts expected ¥1.9 billion.
On forecasting, the company thinks it will now deliver between 21,000 and 22,000 vehicles in Q2 2023, a drop of almost 40 per cent year-over-year. The company also projected a revenue range of ¥4.5 billion to ¥4.7 billion for the second quarter, also a year-over-year decline of nearly 40%.
At least to say, the news is not good, and Xpeng is dealing with a multifaceted issue that will not be easy to navigate. The company is still bouncing back after COVID-19 lockdowns and slowdowns while competing with domestic and international players in China. The EV market in the country is intense, with domestic automakers Li Auto, NIO and BYD, along with Tesla competing for market space.
Xpeng has cut its vehicle costs to spur demand, but they are not seeing the growth they were hoping for even with that. The upcoming G6, an SUV, could be the make or break for the company.
So only time will tell, but for investors and owners, the news and market reactions this week are not a positive sign for now.