XPeng, not just a car seller, is determined to achieve break-even in the fourth quarter.
XPeng Motors has once again delivered its strongest quarterly financial report ever: the gross profit margin has exceeded 20% for the first time, surpassing Tesla and BYD; revenue has doubled, and losses have significantly narrowed. Thanks to the continuous strong sales of the MONA M03 and the excellent performance of new models such as the G6, XPeng has finally emerged from the shadow of sluggish growth. However, as XPeng stands on the verge of profitability, it not only needs to prove that it can make continuous profits but also find a balance between technological investment and commercial returns. Before winning this elimination race completely, XPeng has more challenges to overcome than expected.
Gross Profit Margin Exceeds 20% for the First Time
On the evening of November 17th, XPeng Motors released its third - quarter report card: the company's total revenue reached 20.38 billion yuan, a significant year - on - year increase of 102%, hitting a record high.
What's even more notable is the improvement in the company's profitability. In the third quarter, XPeng's net loss narrowed to 380 million yuan, a substantial reduction of 79.01% compared to 1.81 billion yuan in the same period last year. The gross profit margin reached 20.1%, a year - on - year increase of 4.8 percentage points. This is the first time that XPeng Motors' comprehensive gross profit margin has exceeded the 20% mark.
▲ XPeng Motors' Q3 2025 financial report. Image / XPeng Motors official
This means that XPeng's gross profit margin performance in the third quarter outperformed Tesla (18%) and BYD (17.6%). Behind this are its effective cost control and relevant revenues from technological R & D. It also reflects that XPeng's model of obtaining high profits through non - vehicle sales businesses such as technological licensing has achieved certain results.
XPeng stated in its financial report that the vehicle sales revenue was 18.05 billion yuan, a year - on - year increase of 105%. The service and other revenues were 2.33 billion yuan, a year - on - year increase of 78%, mainly due to the increased service revenues provided to Volkswagen Group. Meanwhile, the vehicle gross profit margin decreased by 1.2 percentage points quarter - on - quarter to 13.1% due to the replacement of old and new models.
What supported the increase in the gross profit margin was the significant increase in delivery volume. In this quarter, XPeng delivered a total of 116,000 new vehicles, a sharp increase of 149.3% compared to 47,000 vehicles in the same period last year. Among them, as the best - selling model, the MONA M03 alone delivered more than 15,000 units in October and has had monthly sales of over 10,000 for 14 consecutive months. The SUV lineup was also impressive. The family matrix composed of the redesigned G6, G9, and the new G7 had a combined monthly sales volume of over 10,000 in October. In particular, the G6 had cumulative deliveries of over 65,000 units from January to October, a year - on - year increase of nearly 60%.
Overall, from January to October this year, XPeng's cumulative deliveries reached 355,000 units, exceeding the total annual deliveries in 2024. This shows that XPeng is leaving behind its past growth fluctuations and entering a new, more stable, and large - scale development stage.
It should be noted that XPeng's improvement in profitability largely depends on the best - selling MONA M03, which has contributed a significant amount of sales. However, the risk behind this single - model dependence is that once market competition intensifies and consumer preferences change, the company's profit foundation will be shaken.
So, can XPeng, which is on an upward trend, achieve profitability in the fourth quarter? He Xiaopeng gave an answer at the earnings conference call: "Our goal is to achieve the company's break - even in the fourth quarter." Optimistically, it is expected that the revenue will reach 21.5 billion to 23 billion yuan, a year - on - year increase of 33.5% to 42.8%, and the delivery volume is expected to be 125,000 to 132,000 vehicles, a year - on - year increase of 36.6% to 44.3%.
The continuous scale effect of increasing volume will help XPeng further spread out fixed costs such as R & D and management, creating more room for profitability. XPeng may really be just one step away from profitability.
On the Verge of Profitability?
Whether XPeng Motors can make money in the fourth quarter of this year is the most concerning issue in the current market. Judging from the third - quarter financial report data, the net loss has narrowed to only 150 million yuan, and the company is standing at the threshold of profitability.
Vehicle sales remain the core support for the current performance. In the fourth - quarter product lineup, the market performance of the extended - range version of the X9 is particularly crucial. He Xiaopeng revealed at the financial report conference call that after the pre - sale of the X9 super extended - range version was launched, it received more attention than expected in northern regions and inland cities, successfully reaching consumer groups that were difficult to cover with previous pure - electric models, and the pre - order volume was nearly four times that of the same period last time.
▲ XPeng X9 extended - range version. Image / XPeng Motors official
Based on the judgment of market demand, XPeng is building a more comprehensive product matrix. At the financial report conference call, He Xiaopeng elaborated on the 2026 product plan in detail: seven new models will be launched. In the first quarter, three will be extended - range versions of existing models, and four will be new models with both pure - electric and extended - range versions. XPeng hopes to open up a larger market and further enhance its competitiveness in the extended - range niche market through the "one - vehicle, two - capabilities" approach.
Beyond vehicle sales, technological licensing is gradually growing into a new profit fulcrum. The relevant revenues will start to be recognized in the fourth quarter of this year and will gradually increase in 2026 with the mass production of cooperative models. However, the "harvest" of technological licensing has already been reflected in the third - quarter financial report.
The financial report data shows that the service and other revenues in the third quarter reached 2.33 billion yuan, among which the revenue from technological R & D services contributed significantly, and the profit margin of this part of the business was as high as 74.6%. The cooperation on the electronic and electrical architecture with Volkswagen has enabled XPeng to break away from the traditional logic of simply "making money by selling cars." On August 15th this year, the two parties announced an expansion of cooperation. XPeng's electronic and electrical architecture will not only be used in Volkswagen's pure - electric platform in China but also deployed in fuel - powered and plug - in hybrid models. This high - profit - margin business is becoming an important force driving XPeng's overall gross profit margin.
However, these profit achievements cannot be separated from high - intensity investment. XPeng's R & D expenditures in cutting - edge technological fields such as large AI models, humanoid robots, and flying cars are still continuously affecting the current profits. He Xiaopeng once said that the total R & D investment of XPeng Motors and XPeng HT in 2025 is expected to be about 9.5 billion yuan, of which the investment related to artificial intelligence alone reaches 4.5 billion yuan.
These investments are mainly flowing into the training of the VLA large model. He Xiaopeng once admitted at the technology day that in order to explore the innovative VLA technology route, the company has invested 30,000 computing cards in computing power from 2024 to now, "burning more than two billion yuan in training fees." During the long period before the technological breakthrough, the team even discussed terminating the project several times due to the lack of clear progress. It was not until the second quarter of this year that the technology achieved a key breakthrough. According to his assessment, this breakthrough has "advanced the upgrade of XPeng's autonomous driving technology by nearly two years."
▲ XPeng's second - generation VLA x VLM. Image / XPeng Motors official
However, the uncertainty of technological implementation is also worthy of attention. The national - wide promotion of XNGP urban navigation assisted driving not only has to face the obstacles of unclear local policies and regulations but also bear high R & D and maintenance costs. New businesses such as robots are more like a "high - stakes gamble." In the short term, they seem to be a "money pit," requiring continuous investment with little return in sight; but in the long run, they may be the "second growth curve" for XPeng to build future competitiveness.
As for when the huge investment will generate returns, the financial report does not give an answer, but XPeng released some clues at the earnings conference call - the humanoid robot business is expected to achieve large - scale mass production by the end of 2026, and the initial commercialization path will mainly focus on commercial scenarios such as shopping guides and security patrols. He Xiaopeng is very optimistic about the future of robots. He hopes that "by 2030, the annual sales volume of XPeng robots will exceed one million units."
While consolidating the domestic market, XPeng is also looking towards the broader international market. XPeng's next stop is globalization.
Fiercer Competition
As the global automotive industry accelerates its transformation towards electrification, Chinese new - energy vehicles are flocking overseas, making the overseas market extremely crowded.
Data from the China Passenger Car Association shows that in the first half of this year, the total export volume of Chinese automobiles reached 3.48 million, of which the export volume of new - energy vehicles was 1.42 million, accounting for 41%. In the second half of the year, this figure continued to rise, reaching 44.2% of the total export volume in October. Currently, the new - energy businesses of many automakers such as BYD, Leapmotor, Chery, and Geely have extended overseas.
On the overseas journey, different from the thinking of some traditional automakers pursuing economies of scale, XPeng's globalization strategy is to take a more refined overseas path.
XPeng's European journey began in 2021, with Norway as the first stop. As of August this year, XPeng had eight XPeng Centers in Denmark, 16 in Norway, 12 in Sweden, and even entered niche markets such as Iceland. The channel construction close to the local market allows XPeng to reach the target customer group more directly.
In addition to building its own network, XPeng also uses local partners to open up the market. In the first half of this year, XPeng entered emerging markets such as Poland, Switzerland, the Czech Republic, and Slovakia through cooperation with the automotive distribution company Inchcape and the European dealer group Hedin Group.
In Switzerland, XPeng plans to build 8 - 10 sales outlets by the end of this year with the support of the Hedin Group; in Austria, it replicates the authorized dealer model that has been proven successful in Germany. These cooperations not only accelerate XPeng's layout in Europe but also make XPeng's globalization strategy more stable and solid.
In September, XPeng's overseas monthly sales volume exceeded 5,000 units for the first time, a year - on - year increase of 79%. In the third quarter, 56 new overseas stores were added, and the sales and service network covered 52 countries and regions around the world.
Meanwhile, XPeng is also promoting local production to enhance the "quality" of its overseas expansion. In July this year, the first locally - produced XPeng X9 in Indonesia was officially delivered, marking a key step for XPeng in global local production. At the same time, XPeng cooperated with the Magna Steyr factory in Graz, Austria, and launched local production in Europe in the third quarter. The first batch of G6 and G9 models rolled off the production line smoothly. The in - depth localization measures have gradually enhanced XPeng's competitiveness in the overseas market.
▲ XPeng's first European local production project was officially launched at the Magna Steyr factory in Graz, Austria. Image / XPeng Motors official
In fact, the investment has begun to translate into visible market returns. In Southeast Asia, the XPeng X9 has performed outstandingly. After topping the sales list of pure - electric MPVs in Thailand in July, it has continuously ranked first in the third quarter; in September, it also won the sales championship of high - end pure - electric MPVs in Malaysia. In the European market, XPeng's registration volume in the first half of the year exceeded 8,000 vehicles, of which the single - model G6 contributed 67% of the sales.
To gain a deeper foothold in the overseas market, XPeng has established a European R & D center in Munich, Germany, to better understand local user needs. According to the plan, XPeng hopes to enter the top three in global new - energy vehicle exports by 2027 and achieve half of its sales from overseas by 2033. This year, XPeng's goal is to cover 60 countries and regions and build more than 300 overseas service outlets.
Looking at the overall overseas market situation, traditional automakers still dominate, and new - energy vehicle startups are generally still in the initial stage. The new - energy vehicle export data of the China Passenger Car Association in October shows that BYD led with more than 80,000 vehicles, while Leapmotor and XPeng had 6,565 and 4,999 vehicles respectively.
In 2026, XPeng plans to launch three new models for the overseas market, including small and medium - sized SUVs that are more anticipated by global users, to meet the diverse car - buying needs of global consumers.
Judging from the current strategy, XPeng has chosen a more cautious path, that is, to participate in the competition while ensuring a certain gross profit, and to maintain price competitiveness through technological transfer and supply - chain optimization, rather than simply sacrificing profits for volume.
Currently, the entire new - energy vehicle startup camp has reached a critical crossroads, and the elimination race has begun. At this juncture, survival not only requires continuous technological innovation but also self - financing ability. Under the pressure of competing both at home and abroad, XPeng needs to find a balance between R & D investment and commercial realization.
This article is from the WeChat official account "Meiren Auto",