Key Takeaways
- XPeng reported a narrower-than-expected second-quarter loss, but revenue missed analysts’ estimates.
- The Chinese EV maker signed a technical agreement with Volkswagen last month, and that helped it cut costs.
- American depositary receipts (ADRs) of XPeng have lost more than half their value in 2024.
American depositary receipts (ADRs) of XPeng (XPEV) dropped Tuesday after the Chinese electric vehicle (EV) maker reported weaker-than-expected revenue, although it had a smaller-than-anticipated loss as it benefited from a deal with Volkswagen.
XPeng posted a second-quarter loss of 1.36 yuan ($0.19) per American depositary share (ADS), while the average of analysts surveyed by Visible Alpha looked for a loss of 1.52 yuan per ADS. Revenue jumped 60.2% year-over-year to 8.11 billion yuan, although that missed forecasts of 8.52 billion yuan.
Vehicle sales increased 54.1% to 6.82 billion yuan, while total vehicle deliveries were up 30.2% to 30,207.
Cost Reductions Attributed To Volkswagen Partnership
Co-President Dr. Hongdi Brian Gu pointed to the company’s cost reductions, which came “through technical improvement and revenues from technical collaboration in our strategic partnership with Volkswagen.” Gu said that boosted gross profit margin to 14.0%, after a decline of 3.9% a year earlier.
XPeng struck the agreement with the German car manufacturer last month to co-develop electrical/electronic (E/E) architecture for Volkswagen vehicles made in China.
XPeng ADRs, which fell 7.2% to $6.68 as of 10:45 a.m. ET Tuesday, have lost more than half their value this year.