Xpeng (NYSE:XPEV) on Friday reported a wider-than-expected loss in the second quarter, sending the Chinese electric car maker’s shares down first thing Friday on U.S. markets.
The net loss was wider than the 2.7-billion-yuan ($370.7-million U.S.) loss reported for the second quarter of last year. It was also the biggest quarterly loss that Xpeng has posted since going public in August 2020.
Despite the hit on profit, the Chinese company’s second-quarter revenue met expectations.
Net loss proved 2.8 billion yuan vs. 2.13-billion-yuan loss expected. Revenue was 5.06 billion Chinese yuan ($693.7 million U.S.) vs. 5.06 billion yuan expected, representing a 31% year-on-year fall.
Xpeng also said its gross margin turned negative 3.9% compared with positive 10.9% during the same period of 2022.
The company is attempting to turn around the business this year, after a torrid 2022 during which its share price sank by more than 80%.
Xpeng is operating in a weak Chinese economy with depressed consumer spending, while at the same time facing cut-throat competition in China from other upstarts like Nio (NYSE:NIO) and Li Auto (NASDAQ:LI), as well as giants BYD and Tesla (NASDAQ:TSLA).
Competition is still ramping up, as a price war develops in the world’s second-largest economy. Tesla this week cut the price of its Model Y and Model S cars and offered discounts on existing inventory of the Model S and Model X in China.
XPEV shares lost 88 cents, or 5.6%, to $14.92.
