Chinese electric carmaker XPeng on Tuesday reported narrowing second-quarter losses, higher margins and robust revenue growth, as the company ramps up sales of its new entry-level model.
Founded and led by He Xiaopeng, the company saw its average selling price rise 7% from the first quarter but fell 28% from a year earlier, before the launch of its cheapest model to date, the Mona M03.
“In the face of intense industry-wide price competition, we remain committed to a long-term, sustainable growth strategy, with rapidly improving operational quality,” XPeng‘s Vice Chairman and Co-President Brian Gu said in a statement.
The M03, which was launched a year ago, has quickly become XPeng’s best-selling vehicle.
In July, it accounted for nearly 43% of global deliveries, up from 40.77% in June and 32.51% in May. Since the model is sold exclusively in China, it represents close to half of the company’s domestic sales.
Automotive revenue jumped 147.6% year on year and 17.5% from the previous quarter to 16.88 billion yuan.
Vehicle margin rose for the eighth consecutive quarter to 14.3%, compared with 6.4% a year earlier and 10.5% in the first three months of the year.
Cash and cash equivalents, restricted cash, short-term investments and time deposits increased to 47.57 billion yuan ($6.64 billion), a new record for the Guangzhou-based carmaker.
Net loss narrowed to 0.48 billion yuan ($70 million), from 1.28 billion yuan a year ago and 0.66 billion yuan in the first quarter.
On Monday, the company signed a strategic agreement with Citic Bank, securing a 1 billion yuan ($1.4 billion) credit facility to support operations and development.
Separately, XPeng and Volkswagen expanded their cooperation in China beyond electric vehicles to include hybrid and internal combustion engine models.
Industry data posted on Chinese social media on Tuesday indicated XPeng sold 7,900 vehicles in China between August 11 and 17, matching the previous week’s tally.
As of press time — and before the earnings conference call with the management — US-listed shares of the carmaker are trading nearly flat at $19.95.
