Financial Forecast

XPeng Inc. (NYSE:XPEV) has forecasted lower-than-anticipated revenue for the third quarter, projecting figures below analysts’ expectations. The company reported that its revenue for the third quarter is expected to range between 9.1 billion yuan and 9.8 billion yuan, whereas analysts had anticipated around 10.4 billion yuan.

Quarterly Performance

In its June quarter results, XPeng’s revenue stood at 8.11 billion yuan ($1.14 billion), missing the expected 8.17 billion yuan. Despite a slight increase in gross margin to 14%, up by 1.1 percentage points, XPeng struggled with stiff competition and a decline in demand for its existing lineup of electric vehicles (EVs).

Vehicle Deliveries

XPeng aims to deliver between 41,000 and 45,000 vehicles in the third quarter, surpassing the 40,008 units delivered in the same period last year. The company reported an improved vehicle margin of 6.4% for the April-June period, up from 5.5% in the previous quarter.

Future Plans and Challenges

To enhance its market position, XPeng plans to refresh its model lineup with new EVs over the next three years, with prices ranging from 100,000 yuan to 400,000 yuan ($14,001.88 to $56,007.51). The upcoming MONA M03 mid-sized sedan is set to compete with BYD’s Seagull and Dolphin models as well as Tesla’s Model 3.

However, XPeng’s expansion plans face challenges, particularly due to the European Commission’s tariffs on Chinese-made EVs. The company is considering establishing a manufacturing plant in Europe to mitigate these tariffs.

Competitive Landscape

XPeng is contending with intense competition from domestic players like BYD and Nio (NYSE:NIO), as well as global competitors including Tesla (NASDAQ:TSLA). This competitive pressure, combined with regulatory hurdles, is impacting XPeng’s financial outlook and market strategy.

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