Xpeng Stock Posts Mixed Q2 Results, Weakens Q3 Outlook

Last week, Xpeng stock posted a mixed set of Q2 2022 results, while also providing a weaker-than-expected outlook for Q3 deliveries.

BRAZIL - 2022/08/24: In this photo illustration, the Guangzhou Xiaopeng Motors Technology (Xpeng) ... [+] logo is displayed on a smartphone screen. (Photo Illustration by Rafael Henrique/SOPA Images/LightRocket via Getty Images)SOPA Images/LightRocket via Getty Images
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The stock of Xpeng, a Chinese automaker, posted disappointing results last week, with a wider than expected net loss and a weaker-than-expected delivery outlook for the third quarter. Operating expenses and weaker gross margins led to the net loss, while inflation and supply chain challenges weighed on gross margins. For the third quarter, Xpeng projects deliveries of just 13-21% above last year's levels, well below market expectations. This weak outlook is partly due to supply issues, but also reflects concerns about the Chinese economy, where consumption remains weak. Xpeng's rival Li Auto also issued a weak outlook for the third quarter.

Looking ahead, there are a couple of factors that could help Xpeng stock in the near term. The company has an all-new SUV G9 which is likely to see deliveries begin in October, with two new models slated for 2023, one of which is likely to compete with Tesla's popular Model Y SUV. The new launches could help drive growth for Xpeng. For perspective, the company anticipates that sales of the G9 will eventually exceed those of its P7 sedan (the P7 saw about 16,000 deliveries over Q2). Moreover, overall EV demand and favorable regulation in China remain a big tailwind for Chinese EV players. Between January and July, deliveries of new energy vehicles - a broad term that includes hybrids, EVs, and fuel cell vehicles - rose by over 2x versus last year. Consequently, despite the recent stock decline, XPeng remains a company to watch in the electric vehicle space.

As the global electric vehicle market continues to heat up, competition among Chinese manufacturers is also intensifying. In this article, we compare the three leading Chinese EV companies – Nio, Xpeng, and Li Auto – in terms of their business models, product offerings, and financial performance. Based on our analysis, Nio is currently the most well-positioned of the three companies, with a strong product lineup and a solid financial position. However, Xpeng and Li Auto are both rapidly catching up, and it remains to be seen how the competition will shake out in the coming years.

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