Chinese electric vehicle maker Xpeng delivered robust third-quarter financial results, with revenue and gross margin exceeding analyst estimates, driven by higher vehicle deliveries and strategic cost reductions.
Revenue and Delivery Milestones
Xpeng posted third-quarter revenue of RMB 10.1 billion ($1.44 billion), surpassing market expectations of RMB 9.9 billion. This figure represents an 18.4% increase year-on-year and a 24.5% rise from the second quarter, making it the second-highest quarterly revenue in the company’s history. Vehicle sales contributed RMB 8.8 billion, reflecting a 12.1% growth from the same period in 2023 and a 29.0% increase sequentially, bolstered by strong delivery volumes.
The company delivered 46,533 vehicles during the quarter, exceeding its guidance range of 41,000 to 45,000 units. This marks a 16.3% increase year-on-year and a 54.1% jump from the previous quarter, making it the second-best quarter for deliveries after Q4 2023.
Margin Improvements and Strategic Partnerships
Xpeng’s gross margin hit a record 15.3%, up from negative 2.7% a year ago and 14.0% in the previous quarter. Vehicle margins also improved significantly to 8.6%, compared to negative 6.1% in the same period last year. The improvements were attributed to cost optimization efforts and a better sales mix.
The company’s service and other revenue margins reached 60.1%, supported by technology-related partnerships, including collaborations with Volkswagen. This segment saw a year-on-year revenue increase of 90.7%, underscoring the company’s diversification strategy.
Investment in Growth and Q4 Outlook
Xpeng increased research and development expenses by 25.1% year-on-year to RMB 1.63 billion, focusing on new model development and portfolio expansion. Despite these investments, the company narrowed its net loss to RMB 1.81 billion, a significant improvement from RMB 3.89 billion in the same quarter last year.
Looking ahead, Xpeng forecasts fourth-quarter vehicle deliveries of 87,000 to 91,000 units, a year-on-year growth of 44.6% to 51.3%. Revenue is expected to range between RMB 15.3 billion and RMB 16.2 billion, representing a 17.2% to 24.1% increase from the prior year.
This guidance sets the stage for continued momentum, supported by strong October deliveries of 23,917 vehicles and projected deliveries of over 63,000 units in the remaining months of the year.