(Yicai Global) May 25 -- Shares of Xpeng Motors plunged after the Chinese new energy vehicle startup said its net loss widened 37.4 percent in the first quarter from a year ago, as revenue and sale fell amid intense price competition in the world’s biggest auto market.

Xpeng [HKG: 9868] finished 9.3 percent lower at HKD31.35 (USD4) a share in Hong Kong today. In pre-market trading in New York today, the stock [NYSE: XPEV] was down 5.7 percent at USD8.16 as of 4.51 a.m. local time, after tumbling 5.1 percent yesterday.

The net loss was CNY2.3 billion (USD331.2 million) in the three months ended March 31, versus CNY1.7 billion a year earlier, the Guangzhou-based firm said in a trading report released yesterday. Revenue fell nearly 46 percent to CNY4 billion, missing a forecast CNY4.2 billion.

Gross margin came in at 1.7 percent in the first quarter, compared with 12.2 percent a year earlier and 8.7 percent in the last quarter of last year.

“During the first quarter, I took actions to make changes to our strategy, organizational structure and senior management team decisively,” Chairman and Chief Executive He Xiaopeng said. “I am fully confident in taking our company into a virtuous cycle driving product sales growth, team morale, customer satisfaction and brand reputation over the next few quarters.”

China’s auto market descended into a fierce price war this year that has impacted the sales of many carmakers. Moreover, state subsidies on NEV purchases ended last year, further weighing on sales.

Xpeng delivered 18,230 cars in the first quarter, down 47.3 percent from the same period last year. Revenue from car sales dropped 49.8 percent to CNY3.5 billion. It expects deliveries this quarter to fall from 36.1 percent to 39 percent to between 21,000 and 22,000.

The G6, the first model built on Xpeng’s next-generation technology architecture, will hit the market next month, He noted, adding that he is confident that it will drive the carmaker’s sales growth above the industry average both on a quarterly and yearly base in the third quarter.

Xpeng will release its first multi-purpose vehicle, the X9, in the fourth quarter, he said.

Lithium prices rebounded to a reasonable range of about CNY200,000 (USD28,310) per ton, He said, noting that Xpeng has a flexible pricing mechanism with suppliers so that it will increase the share of models equipped with lithium-iron phosphate and lithium-iron phosphate-like batteries.

Editor: Futura Costaglione