Chinese electric vehicle brand Xpeng reported its fourth quarter earnings on Friday, showing a plunge in revenue and deliveries for the quarter.

The company delivered 22,204 vehicles in the fourth quarter of 2022, including 6,189 of its flagship G9 SUVs, a 46.8% decline year-over-year. Xpeng attributed the decline to lower deliveries of the P5 and P7 models.

In the fourth quarter, revenue fell nearly 40% year-over-year to $750 million, and vehicle margins fell to 5.7% from 11.6% in the previous quarter. Xpeng's fourth-quarter loss also widened to $342 million, below Wall Street's forecast and above the 1.2 billion yuan loss in the fourth quarter of 2021.

The company gave a weak outlook for the first quarter of 2023, with deliveries expected to be between 18,000 and 19,000, representing a year-over-year decline of approximately 45.0% to 47.9%.

Total revenue will come in at between 4.0 billion yuan and 4.2 billion yuan, representing a year-on-year decrease of approximately 43.7% to 46.3%.

The price war launched by Tesla in January has disrupted the Chinese EV market. Many Chinese EV makers have joined the price-cutting bandwagon to boost sales and avoid losing market share to the US rival. Xpeng is one of them, reducing the prices of its EVs by 10-13%.

When compared to its Chinese competitors like BYD, Nio, and Li, Xpeng is widely considered to be more vulnerable to price competition because it competes more directly with Tesla in terms of product lineup and price range.

As the price war intensifies, Wall Street anticipates a shakeout in the China EV market, with a select few companies emerging victorious and the rest being left in the dust.

“With the optimization of our product portfolio and the significant improvement of our marketing capabilities, we will resume growth in our sales and market share,” Co-President Brian Gu said in the earnings release.

Xpeng has accelerated its international push in the past year after opening physical stores in Europe last year. In February, the company launched two of its flagship cars, the P7 sedan and the G9 sports utility vehicle, across a number of European countries.