XPeng Cuts Its Losses on Volkswagen Deal, But Revenue Falls Short of Forecasts

Core Insights - XPeng reported a narrower-than-expected second-quarter loss of 1.36 yuan ($0.19) per American depositary share (ADS), compared to analysts' expectations of a loss of 1.52 yuan per ADS [1] - Revenue increased by 60.2% year-over-year to 8.11 billion yuan, although it fell short of forecasts of 8.52 billion yuan [1] - Vehicle sales rose by 54.1% to 6.82 billion yuan, with total vehicle deliveries increasing by 30.2% to 30,207 units [2] Cost Reductions and Partnerships - The partnership with Volkswagen contributed to cost reductions through technical improvements and collaboration, boosting gross profit margin to 14.0%, up from a decline of 3.9% a year earlier [3] - The agreement with Volkswagen involves co-developing electrical/electronic (E/E) architecture for vehicles manufactured in China [3] Market Performance - XPeng's American depositary receipts (ADRs) have lost more than half their value in 2024, with a recent drop of 7.2% to $6.68 [1][3]