Xpeng Shares Plunged 11% in Morning Trading

Xpeng shares plunged 11% in morning trading after the chinese EV maker reported a wider-than-expected loss after Shanghai’s lockdown and supply chain snarls troubled automakers last quarter.

The net loss widened to 2.7 billion yuan ($394 million) in the three months ended June 30, the Guangzhou-based company said Tuesday. That compares to a 1.19 billion yuan shortfall a year earlier and analyst estimates of a 1.94 billion yuan deficit, according to data compiledby Bloomberg.

While revenue for the second quarter almost doubled to 7.44 billion yuan, beating the 7.29 billion yuan forecast, the electric carmaker’s expected deliveries for the third quarter missed average analyst estimates. Xpeng sees car shipments of between 29,000 to 31,000 units in the three months through September versus the 45,865 the market was looking for.

Although its headquarters are located around 1,500 kilometers (930 miles) from Shanghai, Xpeng was still subject to production losses and chip shortages. Delays also hit rivals including Tesla Inc. and Li Auto Inc. during the city’s two-month pandemic lockdown. Even so, it delivered 34,422 vehicles last quarter, almost doubling from a year earlier and just above the upper range of the company’s own forecast of between 31,000 and 34,000 units.

“Our deliveries sustained robust growth momentum in the second quarter despite unprecedented circumstances brought by the resurgence of Covid in certain areas of China,” Chief Executive Officer He Xiaopeng said in the statement, adding the company is accelerating the pace of new product launches priced between 150,000 yuan to 500,000 yuan.

In addition to the G9 sports utility vehicle expected to come later this year, the company plans to roll out two new models in 2023 that will “further propel rapid sales volume growth,” He said.

Despite raising prices earlier this year, surging raw material costs continued to eat away at margins. Xpeng reported a gross margin of 10.9% for the second quarter, compared with 12.2% the previous quarter and 11.9% a year earlier.