BEIJING — Chinese electric car start-up Xpeng expects the global chip shortage will persist for at least another three months.
Automakers around the world have had to cut production due to a shortfall in semiconductors, or chips. High demand for electronics, U.S.-China trade tensions and a major factory fire have affected the highly specialized industry's ability to manufacture enough chips.
"What we've seen is that this tight situation will continue for the next quarter or so," Brian Gu, vice chairman and president of Xpeng, said Friday on CNBC's "Squawk Box Asia."
The challenge is "the visibility of chip supplies is by the minute," Gu said. "We are paying very, very close attention to the situation. Right now, the impact is limited and it's reflected in our guidance."
Xpeng's U.S.-listed shares fell nearly 4.9% in Thursday's trading session despite the start-up reporting greater-than-expected revenue of 2.95 billion yuan ($456.7 million) for the first quarter.
The stock is now down nearly 45% for the year so far, but still holds gains of more than 50% from its IPO in August.
Xpeng expects to deliver between 15,500 and 16,000 vehicles in the second quarter. The company said it delivered 13,340 cars in the first three months of the year, topping its forecast for 12,500 cars.
Growing revenue from software
While car sales account for the majority of Xpeng's revenue, the company noted first-quarter results were helped by customer demand for its assisted driving software. The start-up said it recorded revenue from the software for the first time after a rollout of an upgrade to paying customers in the first quarter.
Gu said on CNBC that more than 25% of customers have paid for the assisted driving software in the last month, up from 20% last quarter. He expects greater use of Xpeng's software and lower vehicle production costs will increase the company's margin in the near future.
Later this year, Xpeng plans to launch a second electric sedan, the P5, which includes support for the latest version of the start-up's assisted driving software.
Vehicle margin, a measure of profitability, rose to 10.1% in the first quarter, up from 6.8% in the prior quarter. The company did report a year-on-year increase in net losses, of 786.6 million yuan in the first quarter, versus 649.8 million yuan during the same period last year. Research and development expenses rose 72.2% from a year ago to 535.1 million yuan.
Moving ahead into Europe
Xpeng pressed ahead with its European expansion plans in the first quarter by delivering more than 300 units of its G3 SUV to Norway, according to the company. The start-up had sent 100 of the cars to the market in December. Xpeng expects to begin delivering its P7 sedan to Norway in the second half of the year.
Competition in that overseas market is set to pick up with rival Chinese electric car maker Nio's plans to open a showroom and begin deliveries in Norway later this year. Nio's shares fell 7.3% Thursday and are down nearly 36% for the year so far.
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May 14, 2021 at 11:55AM
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Chinese electric car company Xpeng predicts chip shortage will last another quarter - CNBC
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