Chinese EV builder Xpeng predicts record fourth-quarter deliveries as its discounted new models prove popular with motorists

“In the third quarter of 2023, our business stepped into the initial phase of a virtuous cycle,” He Xiaopeng, co-founder and CEO of Xpeng, said in a statement after the company published its third-quarter earnings on Wednesday.

Xpeng reported a net loss of 3.89 billion yuan (US$537 million) in the quarter ended September 30, much greater than the 2.8 billion yuan loss in the previous quarter.

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The per-share net loss came to 2.25 yuan, slightly better than a median forecast of 2.52 yuan by analysts in a Bloomberg survey.

Revenue grew 68.5 per cent on a quarterly basis to 8.53 billion yuan, in line with the analysts’ estimate.

Vehicle margin – the gap between the selling price and the tangible costs such as raw materials, labour and logistics – stood at minus 6.1 per cent, compared with minus 8.6 per cent in the April to June period. Xpeng said the negative vehicle margin was the result of heavy sales promotions and Beijing’s cancellation of cash subsidies for EV purchases.

The company did not say when its promotional activities would end.

“Xpeng’s new model, the G6 SUV (sport-utility vehicle) has convinced consumers of its quality and performance, particularly at a time when discounts are offered,” said Tian Maowei, a sales manager at Yiyou Auto Service in Shanghai.

“It is important to compete for a considerable market share and build brand awareness. Some new rivals are coming up to challenge the established players soon.”

At the end of October, a joint venture between search engine giant Baidu and China’s top private carmaker Geely began delivering its first production model, the JiYue01, a premium battery­-powered SUV with self­-driving capabilities, which will also take on the Model Y in the ­mainland’s cutthroat market.

In October, Xpeng reported 20,002 deliveries, up 31 per cent month on month and beating its previous record of 16,000 units set in December 2021.

Rival Li Auto broke its own delivery record for a seventh consecutive month in October when it handed the keys to 40,422 vehicles to mainland Chinese customers, up 12.1 per cent from September and a fourfold increase from a year ago.