Xpeng’s sales slowly ramping up

Chinese electric car maker Xpeng delivered 120,757 vehicles last year, up 23 per cent from 2021, but net losses nearly doubled to 9.14 billion yuan, the equivalent of 1.25 billion euros, on slightly higher sales.

Xpeng has now presented the financial figures for 2022 in the course of its annual report. According to the report, sales amounted to 26.86 billion yuan (about 3.67 billion euros), an increase of 28 per cent over the previous year. However, the company’s net loss climbed at the same time from 4.86 billion yuan to the said amount of 9.14 billion yuan or 1.25 billion euros. Xpeng reported its gross margin for the full year at 11.5 per cent, down one percentage point from 2021.

The fact that the manufacturer experienced a weak second half of the year was already apparent in its Q3 figures for 2022. The forecast for the fourth quarter was very low at the time: With 22,204 deliveries now confirmed, Xpeng is very slightly above the fear of only being able to complete 20,000 to 21,000 vehicle sales in Q4. Still, the drop-off is immense at minus 47 per cent compared to Q4 2021. Sales (5.14 billion yuan) shrank 40 per cent accordingly. Q4 gross margin slipped 3.3 per cent.

“We have comprehensively reviewed our strategy and took decisive actions to execute our organisational restructuring and strengthen our capabilities where necessary,” He Xiaopeng, the company’s chairman and CEO, was quoted as saying in the annual report. “From 2023 to 2027, the industry will move from a phase of rapid EV penetration to an era of accelerated disruption by smart technologies, and we are confident that we will further strengthen our leadership in smart EV technologies.”

In the first quarter of 2023, however, the restructuring will not yet take hold. Vehicle sales totaled just 5,218 in January and 6,010 in February. Without a turnaround in March, the quarterly result will still slip below the Q4/2022 result presented above. The beacon of hope is the revamped P7i electric sedan as the successor to the P7, which Xpeng unveiled this week and deliveries of which are scheduled to begin this month in China.

Xpeng has high hopes for the facelift because the previous model has long been Xpeng’s main sales driver. In 2022, 59,066 units of the P7 were sold, accounting for 49 per cent of Xpeng’s annual sales. The manufacturer itself estimates that Q1 2023 will end with sales of 18,000 to 19,000 vehicles, which would equate to March results of 6,800 to 7,800 deliveries. Xpeng sees Q1 sales melting down to 4.0 to 4.2 billion yuan. Both key figures are therefore likely to be down by around 45 per cent compared with the same period last year.



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