(Reuters) – China’s Xpeng Inc (NYSE:XP) forecast third-quarter revenue below expectations and missed second-quarter sales estimates on Tuesday, hurt by stiff competition and weaker demand for its aging lineup of expensive electric vehicles.
The company, however, expects to deliver between 41,000 and 45,000 vehicles in the third quarter, slightly more than the 40,000 units a year earlier.
Shares of XPeng listed on the Hong Kong Stock Exchange fell 2.7% on Wednesday.
The company plans to refresh its model lineup by launching a range of new electric vehicles in the next three years, priced between 100,000 yuan and 400,000 yuan ($14,001.88 to $56,007.51), to grab market share from rivals such as BYD (SZ:), Nio (NYSE:) and U.S. automaker Tesla (NASDAQ:).
The company plans to launch the MONA M03 mid-size sedan this month, which is set to compete with BYD’s Seagull and Dolphin and the more expensive Tesla Model 3.
XPeng’s expansion plans have seen a temporary slowdown due to the European Commission’s move to impose tariffs on Chinese-made electric vehicles to prevent a flood of state-backed cars.
It is among the Chinese companies considering setting up a manufacturing plant in the region to avoid those tariffs.
The car sales margin in the April-June period improved to 6.4% from 5.5% in the previous quarter. The company expects to deliver between 41,000 and 45,000 vehicles in the third quarter, compared with 40,000 and 8 units in the same quarter last year.
XPeng’s revenue rose to 8.11 billion yuan ($1.14 billion), in line with its expectations of 7.5 billion and 8.3 billion yuan, but slightly below analysts’ average estimate of 8.17 billion yuan, according to LSEG data.
The company expects third-quarter revenue of between 9.1 billion yuan and 9.8 billion yuan, compared with analysts’ estimates of 10.4 billion yuan.
(1 dollar = 7.1419 renminbi)