Xpeng Motors (XPEV, Financial) has delivered its strongest quarterly earnings after nearly two years of sluggish performance. The company's third-quarter revenue reached 10.1 billion RMB, up 18.4% year-over-year and 24.5% sequentially, surpassing market expectations. This growth is attributed to improved scale effects and cost reductions in technology, which boosted the gross margin to a record 15.3%, marking a continuous rise for five consecutive quarters.
Despite this progress, Xpeng's automotive gross margin of 8.6% still lags behind competitors like Li Auto's 20.9%. However, Xpeng's overall gross margin was bolstered by high-margin revenue from its partnership with Volkswagen, contributing 1.31 billion RMB with a 60% gross margin.
Xpeng's net loss for common shareholders narrowed significantly to 1.81 billion RMB from 3.89 billion RMB the previous year, with cumulative net losses for the first three quarters reduced by 50.6% year-over-year. Looking ahead, Xpeng projects fourth-quarter revenue between 15.3 billion and 16.2 billion RMB, with deliveries expected to reach 87,000 to 91,000 units, exceeding market expectations.
Sales of the new Xpeng MONA M03 model have been strong, with over 10,000 units delivered in September alone, contributing to a total of 46,533 units delivered in the third quarter, up 16.3% year-over-year. The company anticipates further growth with the introduction of the P7+ model, aiming for monthly deliveries exceeding 10,000 units by December.
Internationally, Xpeng's overseas sales grew 70% sequentially, now making up 15% of total sales. The company plans to expand its global sales network to over 300 stores across more than 90% of the new energy vehicle markets outside North America by 2025.
Xpeng is also venturing into new areas such as flying cars and robotics, presenting both opportunities and challenges in managing its expanding operations.
