Caixin
May 17, 2021 07:15 PM
BUSINESS & TECH

Electric-Car Maker Xpeng Says Autonomous Driving Software Will Be Sustained Source of Profit

An Xpeng P7 all-electric sedan sits on display in Shanghai on Jan.1. Photo: VCG
An Xpeng P7 all-electric sedan sits on display in Shanghai on Jan.1. Photo: VCG

One of Tesla’s Chinese rivals, Xpeng Inc., saw its stock price surge 9% after it reported narrowing losses, strong gains in deliveries and a growing focus on self-driving software.

The electric-car maker booked a net loss of 786.6 million yuan ($120.1 million) in the first quarter, compared with a net loss of 935.1 million yuan in the same period last year, according to the company’s latest earnings report released Thursday. The New York-listed stock surged 9.18% to $25.70 at closing Friday.

Xpeng’s revenue skyrocketed 616.1% to 3 billion yuan from last year, nearly 95% of which came from vehicle sales, according to the report. In the first quarter of 2020, the Covid-19 epidemic was at its peak on the Chinese mainland, likely suppressing sales.

Revenue was up a more modest 2.7% from the fourth quarter of 2020, which the Guangzhou-based company attributed to increased income from its autonomous driving software Xpilot 3.0, which brought in 80 million yuan in the first quarter.

CEO He Xiaopeng said in an earnings call that Xpilot will become a recurring source of revenue and “generate profits in addition to (vehicle sales).”

“We'll rollout Xpilot 3.5 and Xpilot 4.0 — our next generation of autonomous driving technologies in the next few years," He said, adding that the software upgrades will build on rapid technology innovations from in-house R&D and benefit from greater hardware and software integration.

Xpeng expects to deliver 15,500 to 16,000 cars in the second quarter with revenue likely to reach between 3.4 billion yuan and 3.5 billion yuan in the period, an ambition that comes as tech giants Baidu Inc., Xiaomi Corp. and Huawei Technologies Co. Ltd. have all announced their expansion into the sector with huge investment plans.

Ding Yi contributed to this report.

Contact reporter Timmy Shen (hongmingshen@caixin.com) and editor Joshua Dummer (joshuadummer@caixin.com)

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