XPeng reports a smaller-than-anticipated quarterly loss due to production issues, but pricing power offsets the setback.

• The Chinese electric-vehicle manufacturer reported a narrower fourth-quarter loss than anticipated by Wall Street.
• This quarter, XPeng anticipates delivering between 33,500 and 34,000 vehicles, marking a growth of over 150% compared to the first quarter of 2021.
• The G9, an upscale electric SUV from XPeng, is set to begin production this fall.

On Monday, the Chinese electric vehicle manufacturer reported a narrower fourth-quarter loss than expected by Wall Street, thanks to pricing power that mitigated the impact of supply chain challenges and rising costs.

XPeng reported a loss of $202 million in the quarter, or 22 cents on an adjusted per-share basis, on revenue of $1.34 billion. This was significantly better than expected: Seven Wall Street analysts polled by FactSet had projected an adjusted loss of 33 cents per share, on average.

The gross profit margin of XPeng's vehicle business decreased from 13.6% in the third quarter to 10.9% in the fourth quarter due to higher costs related to supply chain issues and rising commodity prices. However, this was still a significant improvement over the 3.5% vehicle margin the company posted in the fourth quarter of 2020, as CEO He Xiaopeng noted during a call with analysts Monday morning.

The company’s U.S.-listed shares traded fractionally higher after the release.

XPeng faced production disruptions due to supply chain challenges, including a global shortage of semiconductor chips, which kept their EVs in short supply amid high demand. This allowed the company to increase prices and offset the impact of rising costs.

The CEO stated that the company plans to increase production in 2022 and aims to deliver over 10,000 P7 sedans in a month. He also expects the new P5 sedan to achieve similar production numbers later this year.

In 2021, XPeng delivered 60,569 P7s and 7,865 P5s.

The CEO stated that the company's next electric SUV, the G9, is set to launch in the third quarter of 2022. He predicted that the G9 would outperform Chinese-made competitors and could be a major success for the company.

In 2023, two new models will be introduced, utilizing a new vehicle architecture, according to him.

This quarter, the company anticipates delivering between 33,500 and 34,000 vehicles, which is a growth of over 150% compared to the first quarter of 2021.

Despite several days of factory downtime during China's Lunar New Year holiday, XPeng delivered a total of 19,147 vehicles in January and February.