By ZHOU Shuqi

EV startup XPeng has reported another set of disappointing results, the company’s worst yet in a long series of bad numbers since going public.

Sales in Q1 almost halved, down 45.9 percent to 4 billion yuan (US$570 million). Of particular concern is the gross profit margin, which dropped from 5.7 percent in Q4 2022 to negative 2.5 percent in Q1.

Q1 sales of 18,200 cars is the fifth consecutive quarter heading south, falling short of many competitors. But not Nio. Nio's EV sales fell 35.9 percent in April from March, while XPeng's sales were up 1.1 percent.

Nio and XPeng are so far behind rival Li Auto that the new L7 SUV is already almost out of sight. Li Auto also is profitable, something Nio or XPeng has been struggling to achieve.

The net loss of 2.34 billion yuan is attributed to sales promotions and the end of EV subsidies, but these market phenomena also afflict XPeng’s competitors.

XPeng's earnings may not matter so much if the company can make a success of the upcoming G6 SUV. Deliveries of the G6 are supposed to begin by the end of the quarter, with the first models coming off the production line this week.

Deutsche Bank analyst Edison Yu believes the G6 could revive XPeng's fortunes in the second half of 2023. Deliveries won't start to make a difference before the third quarter.

"Our view is XPeng will price G6 below Model Y in hopes of attracting consumers with its sleeker design and newer interior," Yu wrote.

Nio's ES6 SUV and Li Auto's L7 SUV are also sometimes seen as rivals to the Model Y, a bestselling EV in China.