The electric car firm, later this year, plans to launch a second electric sedan, the P5, which includes support for the latest version of the start-up’s assisted driving software
Chinese electric car start-up firm Xpeng is expecting a global chip shortage for another three months at least.
Due to a shortfall in semiconductors or chips, automakers around the world will have to cut production. The highly specialized industry’s ability to manufacture enough chips has been affected by the high demand for electronics, US – China trade tensions and a major factory fire.
“What we’ve seen is that this tight situation will continue for the next quarter or so”, Brian Gu, vice chairman and president of the electric car start-up, said Friday on CNBC’s “Squawk Box Asia”.
The challenge is “the visibility of chip supplies is by the minute”, Gu said. “We are paying very, very close attention to the situation. Right now, the impact is limited and it’s reflected in our guidance”.
Despite the electric car start-up reporting greater-than-expected revenue of 2.95 billion yuan ($456.7 million) for the first quarter, in Thursday’s trading session, the company’s US-listed shares fell nearly 4.9 per cent.
The stock is now down nearly 45 per cent for the year so far, but still holds gains of more than 50 per cent from its IPO in August.
In the second quarter, the electric car start-up expects to deliver between 15,500 and 16,000 vehicles. The company said it delivered 13,340 cars in the first three months of the year, topping its forecast for 12,500 cars.
While car sales account for the majority of Xpeng’s revenue, the company noted first-quarter results were helped by customer demand for its assisted driving software. The electric car start-up said it recorded revenue from the software for the first time after a rollout of an upgrade to paying customers in the first quarter.
Gu said on CNBC that more than 25 per cent of customers have paid for the assisted driving software in the last month, up from 20 per cent last quarter. He expects greater use of Xpeng’s software and lower vehicle production costs will increase the company’s margin in the near future.
The electric car firm, later this year, plans to launch a second electric sedan, the P5, which includes support for the latest version of the start-up’s assisted driving software.
Vehicle margin, a measure of profitability, rose to 10.1 per cent in the first quarter, up from 6.8 per cent in the prior quarter. The company did report a year-on-year increase in net losses, of 786.6 million yuan in the first quarter, versus 649.8 million yuan during the same period last year. Research and development expenses rose 72.2 per cent from a year ago to 535.1 million yuan.
By delivering more than 300 units of its G3 SUV to Norway, the electric car firm pressed ahead with its European expansion plans in the first quarter, according to the company.
The electric car start-up had sent 100 of the cars to the market in December. Xpeng expects to begin delivering its P7 sedan to Norway in the second half of the year.
Competition in that overseas market is set to pick up with rival Chinese electric car maker Nio’s plans to open a showroom and begin deliverables in Norway later this year. Nio’s shares fell 7.3 per cent Thursday and are down nearly 36 per cent for the year so far.