(Reuters) - Chinese firm XPeng ( XPEV ) forecast third-quarter revenue below analysts' expectations and missed June-quarter sales estimates on Tuesday, hurt by stiff competition and a drop in demand for its aging line-up of pricey electric vehicles.

The company, however, expects to deliver between 41,000 and 45,000 vehicles in the third quarter, slightly above 40,008 units a year earlier.

U.S.-listed shares of the Guangzhou, China-based company rose about 2% in premarket trading as it reported an improvement in gross margin of 1.1 percentage points to 14% in the second quarter after technical improvements and revenue from its collaboration with Volkswagen Group.

The company is planning to refresh its model lineup by launching a range of new EVs in the next three years, priced between 100,000 yuan and 400,000 yuan ($14,001.88 and $56,007.51), to grab market share from domestic players such as BYD, Nio and U.S. automaker Tesla.

It plans to launch the MONA M03 mid-sized sedan this month, which is set to compete with BYD's Seagull, Dolphin and the higher-priced Tesla Model 3.

XPeng ( XPEV ) has seen its expansion plans temporarily throttled by the European Commission's move to impose tariffs on electric vehicles made in China to prevent a flood of cars built with state subsidies.

It is among the Chinese companies considering setting up a manufacturing plant in the region to avoid those tariffs.

Vehicle margin in the April-June period improved to 6.4% from 5.5% in the prior quarter. It expects deliveries in the third quarter to be between 41,000 and 45,000 vehicles, compared with 40,008 units in the corresponding quarter of last year.

XPeng's ( XPEV ) revenue rose to 8.11 billion yuan ($1.14 billion), while analysts had expected revenue of 8.17 billion yuan, according to LSEG data.

It expects third-quarter revenue between 9.1 billion yuan and 9.8 billion yuan, compared with analysts' estimates of 10.4 billion yuan.

($1 = 7.1419 Chinese yuan renminbi)