Chinese electric vehicle maker XPeng (XPEV) had the kind of quarter that should make investors happy—revenue doubled, deliveries surged, margins expanded—yet the stock still slid after reporting Monday. Welcome to the challenging world of high-growth expectations.
The company posted third-quarter revenue of 20.38 billion Chinese yuan, equivalent to $2.86 billion, representing a 101.8% year-over-year increase. That's impressive growth by any measure, though it landed just a hair below the $2.87 billion consensus forecast that Wall Street had penciled in.
Deliveries Accelerate as Network Expands
XPeng's quarterly vehicle deliveries tell an even more compelling story, jumping 149.3% year-over-year to 116,007 units. That's also a solid 12.4% sequential increase from the 103,181 vehicles delivered in the second quarter, suggesting real momentum in the business.
The Tesla (TSLA) rival has been aggressively building out its physical infrastructure. As of September 30, XPeng operated 690 stores across 242 cities in China. The company's self-operated charging station network reached 2,676 stations, including 1,623 of its ultra-fast S4 and S5 charging stations—critical infrastructure for supporting its growing fleet.
Vehicle sales revenue climbed 105.3% year-over-year to 18.05 billion Chinese yuan ($2.54 billion), powered by those higher delivery volumes.
Margins Hit New Highs
Here's where things get interesting. XPeng's overall gross margin expanded to 20.1% from 15.3% a year ago, marking the first time the company has crossed the 20% threshold. Vehicle margin specifically improved to 13.1% from 8.6% a year ago, primarily thanks to cost reduction efforts.
Vice Chairman and Co-President Dr. Hongdi Brian Gu highlighted that effective cost control and growth in technology-related revenue drove this milestone. However, vehicle margin did dip sequentially from 14.3% in the second quarter, which the company attributed to product generation transitions as it refreshes its lineup.
The company reported an operating loss of 0.75 billion Chinese yuan ($0.11 billion) for the quarter. On an adjusted basis, the net loss per ADS came in at 0.16 Chinese yuan (2 cents in USD terms), significantly better than the analyst consensus loss estimate of 0.47 Chinese yuan.
XPeng's balance sheet remains healthy with $6.79 billion in cash and equivalents as of September 30.
Eyes on Robotaxis and AI
Chairman and CEO Xiaopeng He struck an ambitious tone, emphasizing that XPeng is rapidly expanding its sales volume and market share while advancing robotaxi and humanoid robot programs toward mass production. He expressed strong confidence that XPeng will evolve into a global embodied AI company—a vision that extends well beyond just selling electric cars.
Guidance Disappoints Despite Growth
XPeng projects fourth-quarter vehicle deliveries between 125,000 and 132,000 units, representing a substantial 36.6% to 44.3% year-over-year surge. That would continue the strong growth trajectory.
The problem? Revenue guidance. The company anticipates fourth-quarter revenue of 21.50 billion to 23.00 billion Chinese yuan (roughly $3.02 to $3.23 billion), which falls notably short of the analyst consensus estimate of 25.09 billion Chinese yuan ($3.52 billion). That gap helps explain why the stock declined despite otherwise solid results.
Shares of XPeng (XPEV) were trading lower by 3.54% to $24.13 in premarket trading Monday, as investors digested the mixed signals of strong current performance against softer-than-expected forward guidance.
