Chinese Tesla-challenger Xpeng Inc (NYSE:XPEV) saw its stock slide in Friday’s premarket deals as it reported a wider-than-expected net loss for its second quarter.
XPeng reported a net loss of 2.8 billion yuan (US$390 million), up from 2.7 billion yuan in the same period last year, and, its biggest quarterly loss to date.
Revenue was marked at 5.06 billion yuan (US$693.7 million) which was in line with market expectations, albeit it still represented 31% decline year-on-year.
The electric vehicle (EV) maker pointed to inventory write-downs, increased sales promotions, and the expiration of Chinese EV subsidies as negative factors on its business.
It comes as competition is becoming increasing fierce amongst the early mover EV makers with Tesla earlier this week being the latest to drop prices.
In terms of EV deliveries, XPeng said it delivered 23,205 units in the quarter, up 27% year-on-year.
Looking at the current quarter it pitches its delivery target in the range of 39,000 to 41,000 units, which would be between 31.9% and 38.7% growth versus the same period in 2022.
On the corporate front XPeng highlighted its recent management restructuring and the significant investment it received from Volkswagen, which saw the German car maker take 4.99% of the Chinese firm via a US$700 million investment.
He Xiaopeng, XPeng chief executive, highlighted that the XPENG G6 vehicle – deemed a competitor to Tesla’s Model Y – has quickly become one of its best selling models.
“I believe the success of the G6 is just the beginning,” He Xiaopeng said in a statement.
“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."
Whilst down some 6.5% in Friday’s premarket, trading at US$14.63 with two-hours to go until the opening bell, the Chinese stock retains significant gains for 2023 to date.
XPeng stock is up more than 50% since starting January at around US$10.00 per share.