Automaker XPeng (XPEV) reported solid financial results for the first quarter. The automaker has then given growth forecasts for the future. On Friday’s trading session, XPeng’s (XPEV) shares gained 9.08% to close at $25.70.
Chairman and chief executive officer He Xiaopeng commented on the XPeng report, saying company first-quarter shipments were strong “despite seasonal declines in vehicle demand and semiconductor shortages.” He noted the company’s strength was industry-leading autonomous driving technology.
A new electric sedan from XPeng Motors introduced in April features an upgraded autopilot system and LIDAR sensors to enable autonomous driving in city traffic. XPeng’s revenue for the quarter was $ 450 million, an increase of 616.1% compared to last year and 3.5% over the fourth quarter. Wallstreet Analyst predictions were $440.4 million. Company officials said the increase over last year’s same period is primarily due to the introduction of the P7 sedans at the end of June 2020.
XPeng began generating revenue from its XPILOT 3.0 driver assistance software during the quarter, which largely contributed to the increase from the previous quarter. Management is optimistic that these software revenues will become regular revenue in the car business, and XPeng hopes this will be an important milestone for the company.
There is a growing trend among automakers to emulate Tesla’s success in selling software to improve autonomous driving — a part of the recurring revenue of car companies with advanced technologies.
XPeng, however, faces losses: the company reported a loss of -$ 0.13 per share for the first quarter, which is better than expected by analysts (-$ 0.17 per share). The company lost $ 106.3 million in the quarter, but that is lower than the previous quarter and the same quarter last year.
A strategic partnership between the automaker and Zhongsheng Group, which has a strong dealer network, was also highlighted. XPeng will be able to offer services and sell its electric vehicles in China via the partnership.
A new plant will be built in Wuhan in April after XPeng signed an agreement with the city authorities. At present, the company operates two factories in Zhaoqing, which can produce 200,000 vehicles per year. XPeng will be able to produce 300,000 units as a result of the new Wuhan agreement.
A year-over-year increase of 475 to 492% is expected for the second quarter for Xpeng in local currencies. As well as providing 15,500-16,000 electric vehicles, the company will deliver about 18% more than the 13,340 vehicles delivered in the first quarter, when shipments increased 2.9% from 12,964 vehicles in the fourth quarter.
On Friday, Xpeng’s Brian Gu told CNBC the company “will have to make a decision soon about its own chips for autonomous vehicles.” The firm is considering developing its chips for automated vehicles.
The WulingHongguang Mini EV, which is on the budget side, was the most popular new energy vehicle on the April 2021 China Passenger Car Association database. Among China’s top 10 sedans, Model 3 ranked second, Model Y fell to sixth place, Nio ES6 was ranked 13th, and Xpeng P7 came in 14th.