(Yicai Global) Aug. 27 -- Shares in Xpeng advanced today after the Chinese electric car startup reported strong revenue growth in the second quarter as sales jump to an all-time high despite an eight-fold widening of its losses from the same period a year earlier.

Xpeng’s Hong Kong stock [HKG:9868] was trading up at 3.06 percent at HKD161.70 (USD20) at 1:30 p.m. China time. Its US-listed shares [NYSE:XPEV] closed down 0.6 percent at USD40.60 yesterday.

Xpeng’s deficit widened eight times in the three months ended June 30 year on year to CNY1.2 billion (USD185 million) due to higher operating expenses, according to the firm's latest financial report released yesterday. Revenue, meanwhile, jumped more than six-fold to CNY3.8 billion (USD580 million).

Xpeng sold over five times more autos in the second quarter than the year before, and 30.4 percent more than in the previous quarter, at 17,398 units, the report said. It delivered 30,738 vehicles in the first half, more than the whole of last year.

Its gross margin was 11.9 percent in the second quarter, up from 11.2 percent in the first quarter, and much higher than the minus 2.7 percent in the same period last year.

However, higher marketing expenses to support sales as well as the cost of expanding the sales network caused administrative expenses to nearly double to CNY1 billion (USD154 million) in the second quarter from a year earlier. Spending on research and development nearly tripled to CNY863.5 billion (USD133 billion), largely due to the hiring of additional staff and pay rises.

Despite the expanding losses, the Guangzhou-based company is not short of cash, it said. Xpeng raised HKD15.8 billion (USD2 billion) in its secondary listing in Hong Kong last month and has around CNY32.8 billion (USD5 billion) in cash and cash equivalents.

Xpeng plans to introduce at least three new models a year from 2023, Chairman He Xiaopeng said at the earnings call. Top of the range prices will increase to as much as CNY400,000 (USD61,685) from the current CNY300,000 as the EV maker moves into the high-end market.

Editor: Kim Taylor