Financial Forecast

XPeng Inc. (NYSE:XPEV) has predicted lower-than-expected revenue for the third quarter, forecasting figures below analyst expectations. The company stated that its revenue for the third quarter is expected to be between 9.1 billion yuan and 9.8 billion yuan, while analysts had projected around 10.4 billion yuan.

Quarterly Performance

In its June quarter results, XPeng’s revenue reached 8.11 billion yuan ($1.14 billion), falling short of the anticipated 8.17 billion yuan. Although the company saw a slight increase in gross margin to 14%, up by 1.1 percentage points, XPeng faced intense competition and a decline in demand for its existing electric vehicle (EV) lineup.

Vehicle Deliveries

XPeng aims to deliver between 41,000 and 45,000 vehicles in the third quarter, exceeding 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 strengthen 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 obstacles, particularly due to the European Commission’s tariffs on Chinese-made EVs. The company is considering establishing a manufacturing plant in Europe to alleviate these tariffs.

Competitive Landscape

XPeng is battling 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 affecting XPeng’s financial outlook and market strategy.