Xpeng guided for fourth-quarter deliveries in the range of 59,500 to 63,500 units, meaning it expects to deliver a total of 39,498 to 43,498 vehicles in November and December.
Xpeng (NYSE: XPEV) posted third-quarter revenue that was slightly below Wall Street's expectations, with gross margin remaining negative as vehicle margin seeing only a modest improvement.
The Chinese electric vehicle (EV) maker reported revenue of RMB 8.53 billion ($1.17 billion) in the third quarter, slightly below market expectations of RMB 8.58 billion.
That was up 25 percent year-on-year and up 68.48 percent from the second quarter, and sits near the lower end of its previous guidance range of RMB 8.5 billion to RMB 9 billion.
Xpeng delivered 40,008 vehicles in the third quarter, up 35.30 percent year-on-year and up 72.41 percent from the second quarter, and within the guidance range of 39,000 to 41,000 vehicles.
The company's revenue from vehicle sales in the third quarter amounted to RMB 7.84 billion, up 25.7 percent year-on-year and up 77.3 percent from the second quarter.
The growth was mainly due to accelerating G6 sales in the third quarter, Xpeng said.
Xpeng launched the new SUV G6 in China on June 29, with scale deliveries starting on July 10.
The G6 delivered 19,137 units in the third quarter, contributing 47.8 percent of Xpeng's quarterly deliveries, data monitored by CnEVPost showed.
Xpeng reported a gross margin of -2.7 percent in the third quarter, an improvement of 1.2 percentage points from -3.9 percent in the second quarter. The company posted a gross margin of 13.5 percent in the third quarter last year.
It had a vehicle margin of -6.1 percent in the third quarter, an improvement of 2.5 percentage points from -8.6 percent in the second quarter. It had a vehicle margin of 11.6 percent for the same period in 2022.
The year-on-year decrease was due to (i) the inventory write-downs related to the G3i, with a negative impact of 2.9 percentage points on vehicle margin for the third quarter of 2023, and (ii) increased sales promotions, and the expiry of new energy vehicle subsidies.
The quarter-on-quarter increase was primarily attributable to the improvement in product mix of models and the cost reduction, Xpeng said.
Xpeng reported a record net loss of RMB 3.89 billion in the third quarter, up 63.3 percent year-on-year and up 38.81 percent from the second quarter.
The company recorded a fair value loss on derivative liabilities of RMB 970 million in the third quarter. This non-cash loss was caused by fair value the fluctuation in the fair value of the forward share purchase agreement, measured through profit or loss, related to the issuance of shares by the Company for strategic minority investment by the Volkswagen Group, it said.
Non-GAAP net loss, excluding equity incentive expense and fair value loss on derivative liabilities, was RMB 2.79 billion in the third quarter of 2023, compared to RMB 2.22 billion in the same period of 2022 RMB 2.67 billion in the second quarter of 2023.
Xpeng reported a basic and diluted net loss per ADS of RMB 4.49 in the third quarter, up from RMB 2.77 in the same period last year and RMB 3.25 in the second quarter.
Its non-GAAP basic and diluted net loss per ADS were both RMB 3.23 in the third quarter, compared to RMB 2.59 in the third quarter of 2022 and RMB 3.10 in the second quarter of 2023.
Xpeng's research and development expenses were RMB 1.31 billion in the third quarter, down 12.9 percent from RMB 1.5 billion in the same period in 2022 and down 4.5 percent from RMB 1.37 billion in the second quarter.
That year-on-year and quarter-on-quarter declines were mainly in line with timing and progress of new vehicle programs, Xpeng said.
As of September 30, the company had cash and cash equivalents, restricted cash, short-term investments and time deposits of RMB 36.48 billion.
Xpeng guided fourth-quarter deliveries to be in the range of 59,500 units to 63,500 units, representing year-on-year growth of about 101.2 percent to 114.7 percent.
It guided fourth-quarter revenue to be in the range of RMB 12.7 billion to RMB 13.6 billion, representing year-on-year growth of about 86.1 percent to 99.3 percent.
Considering that Xpeng delivered 20,002 vehicles in October, the guidance means it expects to deliver a total of 39,498 to 43,498 vehicles in November and December.
"Xpeng vehicle deliveries have grown for nine consecutive months and our free cash flow has substantially improved," said Brian Gu, Xpeng's vice chairman and president.
"Our new products and technology-driven cost controls are expected to result in notable improvements to our gross margin. Leveraging these strengths, we expect even stronger free cash flow in the fourth quarter, marking the starting point of our journey towards long-term scalable profitability," Gu said.
