XPeng delivers its best financial report ever

Author | Wang Xiaojun

Editor | Zhou Zhiyu

Finally, after nearly two years of sluggishness, XPeng has delivered its strongest financial report ever.

On the evening of November 19, XPeng Motors announced its third-quarter financial report for 2024, with multiple data points exceeding market expectations. This has led the market to exclaim that XPeng has finally made a comeback.

Data shows that XPeng Motors' revenue in the third quarter reached 10.1 billion yuan, a year-on-year increase of 18.4% and a quarter-on-quarter increase of 24.5%.

With the support of scale effects and technological cost reductions, XPeng's gross margin further increased in the third quarter, reaching 15.3%, a record high, up 18 percentage points year-on-year. This also marks the fifth consecutive quarter of growth in XPeng's gross margin.

However, XPeng's gross margin is still not very high among the new car-making forces. Although the automotive gross margin has also increased for several months, the 8.6% automotive gross margin is still far from the historical best level. In comparison, Li Auto's gross margin in the third quarter was 21.5%, with an automotive gross margin of 20.9%.

For XPeng's chairman He Xiaopeng, such results allow him to breathe a sigh of relief. With the increase in scale, XPeng is gradually stepping out of the trough period and entering a favorable phase.

Since the official launch of the popular XPeng MONA M03 at the end of August, XPeng's sales have begun to rebound. In September, over 10,000 units of the XPeng MONA M03 were delivered. In total, XPeng Motors' deliveries in the third quarter reached 46,533 vehicles, a year-on-year increase of 16.3%.

In addition to revenue from car sales, XPeng has its second growth curve—technology licensing fees from its collaboration with Volkswagen, which contributed 1.31 billion yuan to XPeng's other business income, and this part of the income grew by 90.7%, with the gross margin further increasing to 60%.

The high gross margin from other business income offsets the relatively low automotive gross margin, allowing XPeng's overall gross margin to exceed expectations.

After the strongest financial quarter, XPeng's overall losses have also significantly narrowed.

In this quarter, XPeng Motors' net loss attributable to ordinary shareholders was 1.81 billion yuan, compared to a net loss of 3.89 billion yuan in the same period of 2023. The cumulative net loss for the first three quarters of this year was 4.46 billion yuan, down 50.60% from a cumulative net loss of 9.03 billion yuan in the same period last year.

Looking ahead to the next quarter and the future, XPeng appears more confident. XPeng expects fourth-quarter revenue to be between 15.3 billion yuan and 16.2 billion yuan, with expected deliveries of 87,000 to 91,000 vehicles, exceeding market expectations.

He Xiaopeng revealed in the earnings call that in November, XPeng's delivery volume will exceed 30,000 units. This is another breakthrough for XPeng as the popular XPeng P7+ joins the ranks of contributing models.

XPeng has always faced delivery challenges when it comes to popular models, but after two rounds of "trials," XPeng now has more experience. He Xiaopeng disclosed that currently, both the XPeng P7+ and MONA M03 have started double-shift production. Among them, the XPeng P7+ aims to achieve monthly deliveries of over 10,000 units by December. It seems that XPeng will not find it difficult to meet the aforementioned quarterly targets In the current situation where two blockbuster models have already been launched, XPeng plans to seize the opportunity.

He Xiaopeng stated that 2025 will be a big year for XPeng, with more than four new models being launched, along with several updated models. Additionally, the first super electric vehicle equipped with the Kunpeng super electric system will also be officially launched in 2025.

XPeng's international market is also riding the wave.

In the third quarter, XPeng's overseas sales increased by 70% quarter-on-quarter, accounting for 15% of the company's total sales. Currently, XPeng's overseas sales network has expanded to over 30 countries and more than 110 stores.

He Xiaopeng mentioned that by 2025, XPeng plans to expand its sales network to over 300 stores in more than 90% of the new energy vehicle market outside North America.

This is XPeng's strongest financial quarter, but a series of challenges are also coming one after another.

In addition to the ongoing delivery pressure, the newly entered range-extended segment is a completely new track for players like XPeng. Although XPeng believes that the range extender it has developed is not an ordinary one, it still faces the challenge of competing closely with established players in the range-extended segment, which is not an easy task.

Tang Jing, president of the first product line at Li Auto, recently expressed doubts about many car companies entering the range-extended segment. In his view, there is a significant difference between the technology of complete vehicle manufacturers and that of component manufacturers. In areas such as energy consumption, braking distance, NVH, and collision safety, only the main engine manufacturers can effectively integrate these systemic technologies.

Although technology tends to mature, new problems still need to be solved one by one by new players like XPeng in the range-extended segment.

Previously, when XPeng was in a downturn, He Xiaopeng displayed calmness as a serial entrepreneur. He also admitted that the current industry often sees different players leading for a few months, and whether they can establish a foothold still faces many tests.

Now, in addition to its main business of automobiles, XPeng has also entered fields such as flying cars and robotics, expanding its scope, which poses challenges to XPeng's operational and financial capabilities.

As He Xiaopeng stated, the industry's elimination competition is still ongoing, and XPeng's favorable period is hard-won. In the face of more intense competition, XPeng also needs to continuously create blockbuster products and enhance the sales cycle of each blockbuster, ensuring sustained growth in scale to overcome more significant milestones and survive healthily until the end