XPeng (XPEV) reported mixed results in the second quarter and initiated its outlook for the third quarter. Specifically,the Chinese EV maker’s losses narrowed in Q2 to RMB0.65 per American Depository Share (ADS), or $0.09 per ADS, compared to a loss of RMB1.55 in the same period last year. Interestingly, analysts had expected the company to report a loss of $0.23 per ADS.
Additionally, the company’s revenues surged by 60.2% year-over-year to RMB8.11 billion ($1.12 billion) in the second quarter, slightly below consensus estimates of $1.13 billion. Moreover, in the second quarter, XPEV’s vehicle deliveries increased by 30.2% year-over-year to 30,207.
XPeng Expects Strong Q3 Growth
Looking ahead to Q3, the company has projected its vehicle deliveries in the third quarter to be between 41,000 and 45,000, representing a year-over-year increase in the range of 2.5% to 12.5%. Furthermore, XPEV has projected its revenues to be between RMB9.1 billion and RMB9.8 billion, indicating a rise of around 6.7% to 14.9%.
XPEV’s CEO Foresees Strong Product Cycle
In terms of management’s outlook, Xiaopeng He, Chairman and CEO of XPeng, commented, “Starting from the launch of MONA M03 in August, we are about to enter a strong product cycle. In the next 3 years, we will have a large number of new models and facelift versions in the pipeline for market launch.”
Of particular note, XPeng’s MONA M03 is the company’s cheapest model, with a starting price of RMB135,900 ($19,030). The vehicle is expected to be launched on August 27.
XPeng Leverages Volkswagen Partnership
In addition to these developments, XPEV is optimistic about a technical collaboration agreement it has signed with the Volkswagen Group (VWAGY) and other cost-cutting efforts that resulted in its gross profit margin in the second quarter expanding to 14%.
Earlier this year, XPeng signed a strategic partnership with the Volkswagen Group to jointly develop advanced electrical and electronic architecture for vehicles produced in China, using Volkswagen’s platforms.
Is XPEV Stock a Good Buy?
Analysts remain cautiously optimistic about XPEV stock, with a Moderate Buy consensus rating based on seven Buys, two Holds, and one Sell. Over the past year, XPEV has more than halved in value, and the average XPEV price target of $11.55 implies an upside potential of 60.4% from current levels. These analyst ratings are likely to change following XPEV’s results today.
