XPeng Reports First Quarter 2022 Unaudited Financial Results

XPeng Inc. (“XPeng” or the “Company”, NYSE: XPEV and HKEX: 9868), a leading Chinese smart electric vehicle (“Smart EV”) company, today announced its unaudited financial results for the three months ended March 31, 2022.

Operational and Financial Highlights for the Three Months Ended March 31, 2022

Total deliveries of vehicleswere 34,561 in the first quarter of 2022, representing an increase of 159% from 13,340 in the corresponding period of 2021.

Deliveries of the P7 smart sports sedanwere 19,427 in the first quarter of 2022, representing an increase of 144% from 7,974 in the corresponding period of 2021. Monthly delivery of the P7 smart sports sedan exceeded 9,000 in March 2022 for the first time.

Deliveries of the P5 smart family sedansustained ramp-up momentum following its mass-delivery launch in October 2021 and reached 10,486 in the first quarter of 2022, among which over 50% can support XPILOT 3.0 or XPILOT 3.5.

XPeng’s physical sales networkcontinued expansion with a total of 366 stores, covering 138 cities as of March 31, 2022.

XPeng self-operated charging station networkfurther expanded to 933 stations, including 757 XPeng self-operated supercharging stations and 176 destination charging stations as of March 31, 2022.

Total revenueswere RMB7,454.9 million (US$1,176.0 million) for the first quarter of 2022, representing an increase of 152.6% from the same period of 2021, and a decrease of 12.9% from the fourth quarter of 2021.

Revenues from vehicle saleswere RMB6,998.8 million (US$1,104.0 million) for the first quarter of 2022, representing an increase of 149.0% from the same period of 2021, and a decrease of 14.5% from the fourth quarter of 2021.

Gross marginwas 12.2% for the first quarter of 2022, compared with 11.2% for the same period of 2021 and 12.0% for the fourth quarter of 2021.

Vehicle margin,which is gross profit of vehicle sales as a percentage of revenues from vehicle sales, was 10.4% for the first quarter of 2022, compared with 10.1% for the same period of 2021 and 10.9% for the fourth quarter of 2021.

Net losswas RMB1,700.8 million (US$268.3 million) for the first quarter of 2022, compared with RMB786.6 million for the same period of 2021 and RMB1,287.2 million for the fourth quarter of 2021. Excluding share-based compensation expenses,non-GAAP net losswas RMB1,528.2 million (US$241.1 million) in the first quarter of 2022, compared with RMB696.3 million for the same period of 2021 and RMB1,198.3 million for the fourth quarter of 2021.

Net loss attributable to ordinary shareholders of XPengwas RMB1,700.8 million (US$268.3 million) for the first quarter of 2022, compared with RMB786.6 million for the same period of 2021 and RMB1,287.2 million in the fourth quarter of 2021. Excluding share-based compensation expenses,non-GAAP net loss attributable to ordinary shareholders of XPengwas RMB1,528.2 million (US$241.1 million) for the first quarter of 2022, compared with RMB696.3 million for the same period of 2021 and RMB1,198.3 million for the fourth quarter of 2021.

Basic and diluted net loss per American depositary share (ADS)were both RMB2.00 (US$0.32) for the first quarter of 2022.Non-GAAP basic and diluted net loss per ADSwere both RMB1.80 (US$0.28) for the first quarter of 2022. Each ADS represents two Class A ordinary shares.

Cash and cash equivalents, restricted cash, short-term deposits, short-term investments and long-term depositswere RMB41,714.0 million (US$6,580.2 million) as of March 31, 2022, compared with RMB43,543.9 million as of December 31, 2021.

Management Commentary

“Our first quarter performance marked a strong start to 2022. Demand for our high-quality EV products was robust and our proprietary suite of technologies continue to lead the industry,” said Mr. He Xiaopeng, Chairman and CEO of XPeng. “Superior in-house technology development capability and proactive supply chain management enabled us to address supply chain challenges more efficiently. We remain confident in expanding our market share despite the impact of semi-conductor shortage and COVID-19.”

“Our strategic goal is to make advanced driver-assistant system (“ADAS”) more affordable and available to broader customers. We therefore resolve to develop full-scenario ADAS with optimized strong performance and a high level of safety at affordable cost, aiming to create greater value for our customers and shareholders.” concluded Mr. He.

“We are pleased to begin the year with a strong quarter. Our total revenues grew rapidly by 152.6% year-over-year in the first quarter of 2022 and our gross margin held up well,” said Dr. Hongdi Brian Gu, Honorary Vice Chairman and President of XPeng. “We will continue to manage supply chain uncertainties and we remain confident in our exciting product pipeline planned for 2022 and beyond. In addition, we expect to further leverage our economies of scale and continue to improve our operating efficiency.”

Recent Developments

Deliveries in April 2022

Total deliveries reached 9,002 vehicles in April 2022, representing a 75% increase year-over-year. The deliveries consisted of 3,714 P7 smart sports sedans, 3,564 P5 smart family sedans and 1,724 G3 and G3i compact smart SUVs.

As of April 30, 2022, year-to-date total deliveries reached 43,563, representing a 136% increase year-over-year.

Unaudited Financial Results for the Three Months Ended March 31, 2022

Total revenueswere RMB7,454.9 million (US$1,176.0 million) for the first quarter of 2022, representing an increase of 152.6% from RMB2,950.9 million for the same period of 2021 and a decrease of 12.9% from RMB8,556.0 million for the fourth quarter of 2021.

Revenues from vehicle saleswere RMB6,998.8 million (US$1,104.0 million) for the first quarter of 2022, representing an increase of 149.0% from RMB2,810.3 million for the same period of 2021 and a decrease of 14.5% from RMB8,187.2 million for the fourth quarter of 2021. The year-over-year increase was mainly attributable to higher vehicle deliveries, especially for the P7 and P5, while the quarter-over-quarter decrease was associated with less vehicle deliveries affected by seasonal factors related to the Chinese New Year holiday.

Revenues from services and otherswere RMB456.1 million (US$72.0 million) for the first quarter of 2022, representing an increase of 224.5% from RMB140.6 million for the same period of 2021 and an increase of 23.7% from RMB368.8 million for the fourth quarter of 2021. The year-over-year and the quarter-over-quarter increases were mainly attributed to more service, parts and accessory sales in line with higher accumulated vehicle sales.

Cost of saleswas RMB6,544.2 million (US$1,032.3 million) for the first quarter of 2022, representing an increase of 149.7% from RMB2,621.1 million for the same period of 2021 and a decrease of 13.1% from RMB7,532.7 million for the fourth quarter of 2021. The year-over-year and the quarter-over-quarter changes were mainly in line with vehicle deliveries as described above.

Gross marginwas 12.2% for the first quarter of 2022, compared with 11.2% and 12.0% for the first quarter of 2021 and the fourth quarter of 2021, respectively.

Vehicle marginwas 10.4% for the first quarter of 2022, compared with 10.1% for the same period of 2021 and 10.9% for the fourth quarter of 2021. The quarter-over-quarter decrease was primarily attributable to increase in raw material costs.

Research and development expenseswere RMB1,221.3 million (US$192.7 million) for the first quarter of 2022, representing an increase of 128.2% from RMB535.1 million for the same period of 2021 and a decrease of 15.9% from RMB1,451.4 million for the fourth quarter of 2021. The year-over-year increase was mainly due to (i) the increase in employee compensation as a result of expanded research and development staff, and (ii) higher expenses relating to the development of new vehicles models to support future growth. The quarter-over-quarter decrease was mainly explained by less design and development expenses which were affected by seasonal factors related to the Chinese New Year holiday.

Selling, general and administrative expenseswere RMB1,641.6 million (US$259.0 million) for the first quarter of 2022, representing an increase of 127.7% from RMB720.8 million for the same period of 2021 and a decrease of 18.5% from RMB2,015.4 million for the fourth quarter of 2021. The year-over-year increase was mainly due to (i) higher marketing, promotional and advertising expenses to support vehicle sales, and (ii) the expansion of our sales network and associated personnel cost, and commission for franchised store sales. The quarter-over-quarter decrease was mainly associated with seasonal factors mentioned above.

Loss from operationswas RMB1,920.5 million (US$302.9 million) for the first quarter of 2022, compared with RMB903.9 million for the same period of 2021 and RMB2,429.7 million for the fourth quarter of 2021. The lower quarter-over-quarter loss was mainly attributable to less operating expenses.

Non-GAAP loss from operations,which excludes share-based compensation expenses, was RMB1,747.9 million (US$275.7 million) for the first quarter of 2022, compared with RMB813.7 million for the same period of 2021 and RMB2,340.8 million for the fourth quarter of 2021.

Net losswas RMB1,700.8 million (US$268.3 million) for the first quarter of 2022, compared with RMB786.6 million for the same period of 2021 and RMB1,287.2 million for the fourth quarter of 2021.

Non-GAAP net loss,which excludes share-based compensation expenses, was RMB1,528.2 million (US$241.1 million) for the first quarter of 2022, compared with RMB696.3 million for the same period of 2021 and RMB1,198.3 million for the fourth quarter of 2021.

Net loss attributable to ordinary shareholders of XPengwas RMB1,700.8 million (US$268.3 million) for the first quarter of 2022, compared with RMB786.6 million for the same period of 2021 and RMB1,287.2 million for the fourth quarter of 2021.

Non-GAAP net loss attributable to ordinary shareholders of XPeng,which excludes share-based compensation expenses, was RMB1,528.2 million (US$241.1 million) for the first quarter of 2022, compared with RMB696.3 million for the same period of 2021 and RMB1,198.3 million for the fourth quarter of 2021.

Basic and diluted net loss per ADSwere both RMB2.00 (US$0.32) for the first quarter of 2022, compared with RMB0.99 for the first quarter of 2021 and RMB1.51 for the fourth quarter of 2021.

Non-GAAP basic and diluted net loss per ADSwere both RMB1.80 (US$0.28) for the first quarter of 2022, compared with RMB0.88 for the first quarter of 2021 and RMB1.41 for the fourth quarter of 2021.

Balance Sheets

As of March 31, 2022, the Company had cash and cash equivalents, restricted cash, short-term deposits, short-term investments and long-term deposits of RMB41,714.0 million (US$6,580.2 million), compared with RMB43,543.9 million as of December 31, 2021.

Business Outlook

For the second quarter of 2022, the Company expects:

Deliveries of vehiclesto be between 31,000 and 34,000, representing a year-over-year increase of approximately 78.2% to 95.4%.

Total revenuesto be between RMB6.8 billion and RMB7.5 billion, representing a year-over-year increase of approximately 80.8% to 99.4%.

The above outlook is based on the current market conditions and reflects the Company’s preliminary estimates of market and operating conditions, and customer demand, which are all subject to change.