By Sherry Qin


Chinese electric-car maker XPeng seems to making progress in its bid to turn profitable this year, guiding for more sales growth after posting a sharply narrowed net loss and record-high revenue.

The company pared its net loss in the final three months of last year, amid strong sales of electric SUVs and robust deliveries.

Guangzhou, China-based XPeng said Tuesday that it reduced its net loss to 1.35 billion yuan ($187.5 million) from CNY2.36 billion in the year-earlier period, thanks to a jump in revenue.

Quarterly revenue more than doubled from a year earlier to a CNY13.05 billion, which the company attributed to the accelerating sales growth of its G6 and G9 sports utility vehicles. It has guided for a 44%-54% on-year rise in revenue in the first quarter of this year.

The quarterly revenue jump brought XPeng's full-year revenue to CNY30.68 billion, up 14% from the previous year. Its annual net loss widened to CNY10.38 billion from CNY9.14 billion in 2022.

XPeng delivered 60,158 vehicles in the fourth quarter, more than double from a year earlier. However, it expects first-quarter deliveries to decline, projecting a range of between 21,000 and 22,500.

Like other carmakers, XPeng has been cutting prices on its models as competition intensifies. Citi analysts have warned that oversupply and the ongoing price war in China's EV market pose a risk to XPeng, whose models compete directly with those of U.S. giant Tesla.

XPeng, which has yet turn a profit, has strived to reduce costs via economies of scale and product mix improvements.

The company said Tuesday that its gross margin recovered to 6.2% from negative 2.7% for the third quarter, while its vehicle margin increased.

"Our plans on cost reduction...have begun to bear fruit," Co-President Dr. Hongdi Brian Gu said alongside the earnings results.

Aside from price cuts, the company is betting that new product launches will help it expand in the mass market and sharpen its competitive edge.

XPeng announced last weekend that it would launch a cheaper EV brand within the next month. Over the next three years, it has more than 10 new models in the pipeline, Chief Executive He Xiaopeng said Tuesday.

"XPeng is about to embark on a major product cycle," he said.


Write to Sherry Qin at sherry.qin@wsj.com


(END) Dow Jones Newswires

03-19-24 0807ET