Leading Chinese smart EV manufacturer XPeng (XPEV) released its Q4 and full-year 2022 earnings Friday, showing a drop in EV deliveries by over 46% in the quarter and missing expectations. Despite a bleak Q1 outlook, XPeng remains confident in future growth with new excitement around the P7i launch and smart technology such as embedded ChatGPT technology.
XPeng Q4 and full-year 2022 earnings results
XPeng delivered 22,204 electric vehicles in Q4 2022 (including 6,189 flagship G9 SUVs), down 46.8% year-over-year (YOY) from the 41,751 achieved in the fourth quarter last year.
The EV marker says the decrease is primarily due to lower P5 and P7 deliveries, partially offset by growing interest in the G9 SUV.
Revenue also slipped nearly 40% YOY in the fourth quarter to $750 million (RMB5.14 down), down 25.3% from Q3. More concerning is XPeng’s vehicle margins fell to 5.7% in Q4 from 11.6% in the previous quarter as rising input costs continue to eat away at margins.
As a result, XPeng’s losses widened in the fourth quarter to $342 million (RMB2.36 billion), missing Wall Street forecasts of around RMB2.1 billion, up from an RMB1.2 billion loss in Q4 2021.
Xpeng’s full-year results for 2022 faired better, with EV deliveries reaching 120,757, an improvement of 23% YOY. Meanwhile, revenues also grew 23% in 2022 to $3.89 billion (RMB 24.84 billion).
Vehicle margins in 2022 did fall last year to 9.4%, compared to 11.5% in 2021, contributing to a net loss of $1.33 billion (RMB9.14 billion) for the year, nearly doubling from RMB 4.86 last period.
The company ended the year with $5.55 billion (RMB 38.25 billion) in cash and equivalents.
What’s next for Xpeng
Xpeng is expecting vehicle deliveries in Q1 2022 between 18,000 and 19,000, which would show another decrease of 45% to nearly 48%. Revenues are also expected to fall between 43.7% and 46.3%, reaching roughly $581 million (RMB 4.0 billion) and $610 million (RMB 4.2 billion).
CEO and chairman of XPeng, He Xiaopeng, remains hopeful for the future despite the falling numbers, saying:
From 2023 to 2027, the industry will move from a phase of rapid EV penetration to an era of accelerated disruption by smart technologies, and we are confident that we will further strengthen our leadership in smart EV technologies.
Xiaopeng added as the company optimizes its product portfolio and marketing abilities, “We will resume growth in our sales and market share.”
XPeng’s physical store count continues expanding, with 420 stores across 143 cities. The company’s self-operated EV charging network also continues growing, with 1,014 stations, including 808 superchargers, at the end of 2022.
More importantly, the Chinese EV maker says in-store traffic and test-drive volume both hit new highs following the new P7i launch earlier this month.
The company says with “clear advantages” over its rivals, it expects strong month-over-month growth of orders in March. XPeng also plans to launch:
- G6 SUV: Making its debut at the Shanghai auto show, the G6 SUV will officially launch in the middle of this year.
- New MPV: In the second half of the year, XPeng will launch a new electric 7-seat MPV designed for a number of occasions with a large spacious interior
To sweeten the deal, XPeng expects to “embed GPT technology into XPeng’s business enterprise-wide to create groundbreaking user experiences and operations efficiency improvements.”
With Chat GPT-4, XPeng says there is an even higher possibility of level 4 and 5 autonomous tech.
Xpeng plans to cut costs this year to increase efficiency and margins including significantly reducing XNGP’s, the company’s semi-autonomus driver assist system’s, bill of material (BOM) costs. The EV marker will adjust its sales model from bundling sales of software and hardware to one that divides them.
Through its new strategic execution roadmap to reduce costs, Xpeng says it will result in an over 50% decrease for autnomous driving costs and an about 25% reduction in hardware costs, including powertrain, over the next year with new technology innovation and optimized configurations.
Looking forward, XPeng says its expects monthly sales numbers to “achieve significant growth” both YOY and sequentially, in addition to being much higher than the industry average.
So far, Xpeng says it has delivered 11,228 vehicles through February 28, 2023.
Electrek’s Take
Following Tesla’s price cuts earlier this year, XPeng slashed prices by up to $5,300 on some of its most popular models, which is likely the reason for the dismal Q1 outlook.
Despite new competition entering the market what seems like daily, the smart EV maker believes its technology helps it stand apart and will drive future growth and profitability. For that to happen, we need to start seeing some margin improvements.
The EV maker has implemented a new cost reduction strategy to bring down costs and improve efficiency.
Xpeng has already set low expectations for the first quarter. We’ll see how the plans to improve profitability throughout the year play out with another slate of highly-anticipated EVs hitting the market.
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