XPeng Reduces Q4 Revenue Projections Amidst EV Pricing Battle in China

Post by : Bianca Suleiman

Chinese electric vehicle manufacturer XPeng has issued a cautious revenue forecast for the fourth quarter, citing an intense price war and heightened competition in China’s EV landscape.

Although the company attained record vehicle deliveries in October, aligning with rival NIO, XPeng now predicts revenues between 21.5 billion yuan ($3.03 billion) and 23 billion yuan, placing it below the anticipated 26 billion yuan average forecast from analysts. The stock price of XPeng saw a nearly 3% decline in premarket trading, reflecting investor unease.

This conservative outlook is in stark contrast to Tesla, which is witnessing a drop in sales in China to a three-year low, illustrating the uneven impact of the ongoing price war that threatens profits in a crowded EV marketplace.

Analysts are closely watching XPeng's newest model, the Mona M03, launched last year in partnership with ride-hailing leader DiDi. While it aims at capturing more budget-conscious consumers, it may also compromise XPeng's positioning in the premium segment priced above 200,000 yuan.

The company is also venturing into futuristic projects, including concepts for “flying cars” and humanoid robots for industrial applications. These initiatives showcase XPeng’s innovative ambitions but necessitate significant R&D investment, which could intensify short-term financial pressures.

However, XPeng's third-quarter figures were relatively optimistic, with revenue hitting 20.38 billion yuan, meeting expectations due to a remarkable 149% year-on-year rise in vehicle deliveries. The company anticipates fourth-quarter deliveries to grow between 36.6% and 44.3% compared to the last year. Notably, net losses were significantly reduced, dropping to 380.9 million yuan from 1.81 billion yuan in the same quarter last year, showcasing some operational resilience amid escalating competition.