Chinese Tesla rival Xpeng tanks 12% after wider-than-expected loss and weak car delivery guidance

Xpeng’s Hong Kong-listed shares plunged more than 12% Wednesday after the Chinese electric vehicle maker reported a wider-than-expected loss for the second quarter and weak guidance on deliveries.

On Tuesday, Xpeng reported a net loss of 2.7 billion Chinese yuan ($403.2 million), wider than the 1.6 billion yuan expected according to Refinitiv consensus estimates.

The Guangzhou, China-headquartered company also said it expects to deliver between 29,000 and 31,000 electric vehicles in the third quarter, representing a year-over-year increase of around 13% to 20.8%.

That guidance disappointed the market.

“Well the second quarter results were actually not bad at all. The revenue was even a little bit better than what we expected. And the earnings, or I should say loss, were narrower than what we expected,” Jiong Shao, analyst at Barclays, told CNBC’s “Street Signs Asia” on Wednesday.

“The problem … was really the forward Q3 delivery guidance, which is about 40% below prior estimates we had. That’s what happened to the stock price.”

Xpeng President Brian Gu said Tuesday the guidance reflects the fact that the industry is entering a “relatively slow season” and that “traffic in the stores are less than what we’ve seen before because (of the) post-COVID situation.”

In the second quarter of the year, China saw a resurgence of Covid-19. Authorities responded by locking down major cities across the country, including the financial powerhouse of Shanghai.

Xpeng said that the G9, its new electric sports utility vehicle, is on track for its official launch next month with deliveries of the car beginning in October.