Xpeng, which is the rival of Tesla in the Chinese electric vehicle (EV) market has recorded a plunge in share prices.
The China-based EV manufacturer has shared its earnings for the recently closed quarter, causing its share prices to move lower.
Xpeng Recorded a Loss in Q2 2022
Xpeng, which is a Hong Kong-listed EV manufacturer, has experienced over a 12% plunge in its share prices in the latest trading market.
Xpeng recorded a dip after sharing weaker-than-expected earnings in the second quarter of 2022. The Chinese EV maker has even posted weak guidance for the rest of the year for deliveries.
This has weakened the performance of Xpeng even more in the stock trading market.
Xpeng Reported Earnings
Just recently, Xpeng shared its earnings for the second quarter. For the second quarter, Xpeng reported a net loss of $403.2 million, translating to 2.7 billion Chinese yuan.
The net loss recorded by Xpeng is much wider than the expectations that the analysts had set for the net loss. The analysts had set the net loss for the EV maker to 1.6 billion yuan.
The consensus surrounding the earnings for Xpeng was shared by the analysts by Refinitiv.
Expectations for Third Quarter
For the third quarter, Xpeng has posted that it aims to deliver 29,000 to 31,000 electric vehicles. This suggests that the company is expecting that its year-over-year deliveries would increase by 13% to 20.8%.
It was observed that right after sharing the earnings and guidance, the entire investment market was left disappointed. This caused the investors to lose their interest in Xpeng and forced them to withdraw from their investments in Xpeng.
This has led the Chinese EV company to record a huge drop in its share prices in the latest market trading session.
Remarks by a Senior Analyst
Jiong Shao, a senior analyst from Barclays shared his thoughts about the second quarter earnings shared by Xpeng.
As per Shao, Xpeng has delivered well in the second quarter as their revenue was a bit higher than the estimations. He added that the loss Xpeng has posted is actually narrower than what they had estimated at their end.
He added that the actual problem Xpeng faced was the deliveries target for the third quarter of 2022. Shao commented that the delivery target Xpeng has predicted is 40% less than what the EV maker had predicted in the past.
COVID is Still Impacting Xpeng
According to the Xpeng officials, China is still not fully out of the COVID situation. Even when the country is out of the pandemic, the post-pandemic situation is not quite favorable for them.
This is because the customers are still hesitating to return to the stores and freely roam around to find a vehicle of their choice.
Therefore, they found it logical for them to keep the expectations to least until they witness a rebound in the market.
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