XPeng’s second-quarter net loss widened due to lower margin and higher R&D spending

By Clarence Leong

XPeng Inc.’s net loss in the second quarter widened, despite revenue nearly doubling from a year earlier, due to a lower gross margin and higher expenses of research and development.

The Chinese electric carmaker posted a net loss of 2.70 billion yuan ($394.2 million) for the three months to June on Tuesday, compared with a loss of 1.19 billion yuan a year earlier. Gross margin for the period was 10.9%, compared to 11.9% a year earlier. Specifically, its automotive business margin weakened to 9.1% from 10.4% in the first quarter, which XPeng attributed to higher battery costs which were partially offset by a price adjustment of sale.

Its R&D expenditure rose 46.5 percent from a year earlier to 1.27 billion yuan in the quarter, it said.

Total revenue for the second quarter was CNY 7.44 billion, compared to CNY 3.76 billion in the same period last year. The increase is mainly due to increased vehicle deliveries, especially for its P7 and P5 models, XPeng said.

The company forecast vehicle deliveries of between 29,000 and 31,000 in the third quarter, up 13% to 21% from a year earlier. It also expects total revenue for the quarter to reach 6.8 to 7.2 billion yuan, representing an expansion of 19 to 26 percent.

“We are accelerating the pace of new product launches to complement our offering, with vehicles priced between 150,000 RMB and 500,000 RMB,” said He Xiaopeng, Chairman and CEO of XPeng. “In 2023, we plan to roll out two new competitive models that will further propel the rapid growth in sales volume,” he added.

Write to Clarence Leong at clarence.leong@wsj.com

Ann J. Cox