(Yicai) Aug. 21 -- Chinese electric vehicle startup Xpeng Motors said its net loss expanded 3.8 percent in the second quarter from a year earlier due to a decline in sales.

The net loss was CNY2.8 billion (USD384.5 million) in the three months ended June 30, the Guangzhou-based carmaker said in its earnings report released on Aug. 18. Revenue sank 32 percent to CNY5.1 billion, while the gross profit margin on vehicles shrank 8.6 percent, remaining negative since the first quarter. 

Xpeng’s deliveries plunged 33 percent to 23,200 units in the quarter. It will likely ship between 39,000 and 41,000 in this quarter, a 32 percent to 39 percent jump from a year ago, with related revenue expected to rise 26 percent to 32 percent to between CNY8.5 billion and CNY9 billion.

The results were impacted by the inventory write-down and losses from Xpeng’s stock purchase commitment for the G3i, its smart sport utility vehicle, and stepped up promotional activities for vehicles and the end of EV subsidies.

Shares of Xpeng [HKG: 9868] rose 1.6 percent to close at HKD62 (USD7.91) each in Hong Kong today. In pre-market trading in New York, its stock [NYSE: XPEV] was trading up 5.5 percent at USD15.80 as of 4.34 a.m. local time, after sinking 4.3 percent on Aug. 18.

Xpeng’s gross profit margin is expected to recover thanks to higher sales of the G6 SUV coupe and other products, its C-suite said.

The carmaker expects to achieve a positive overall operating cash flow in the second half, with gross profit margin likely be above zero in the fourth quarter, it noted, adding that overall costs will be cut by 25 percent next year and gross profit margin will improve significantly. 

By the end of this year, Xpeng will roll out Xpeng Navigation Guided Pilot, an intelligent driving system that does not depend on high-precision mapping technology, in about 50 cities. The XNGP’s costs will hopefully be halved by next year. 

Xpeng received an investment of about USD700 million from German auto giant Volkswagen Group, the Chinese firm announced last month. The pair will also work together to develop new models with smart connectivity, it pointed out.

Editor: Martin Kadiev