Xpeng Motors has delivered a striking turnaround, unveiling its most robust financial results since going public. In Q3 2024, the company delivered 46,533 vehicles, raking in RMB 10.1 billion (USD 1.4 billion) in revenue while posting a record-breaking gross profit margin of 15.3%.
As of September 30, Xpeng held RMB 35.7 billion (USD 5 billion) in cash reserves and limited its quarterly expenditure to RMB 1.58 billion (USD 221.2 million), a burn rate that suggests the company has sufficient liquidity for several years. However, CEO He Xiaopeng isn’t resting easy, outlining plans to raise cash reserves to RMB 40 billion (USD 5.6 billion) by Q4.
This resurgence follows two challenging years marked by slowed momentum. Xpeng’s earlier attempts to revive momentum with the G6 and other models like the X9 and P7i fizzled out. But the Mona M03—a compact electric sedan—has jolted the company back to life.
While official figures remain undisclosed, industry buzz suggests Mona M03 preorders surpassed 80,000 in October, exceeding 100,000 a month later. Its sibling, the P7+, also amassed 30,000 preorders within two hours of its presale launch. Such success, however, has created supply chain headaches, with production straining to keep up.
For Xpeng CEO He, the focus has shifted from whether the company can sell cars to how quickly it can fulfill orders. Addressing his leadership team, he emphasized the importance of adaptability and humility as the automaker works to advance in 2025 after navigating recent headwinds.
Xpeng’s financial resilience has been a cornerstone of its recovery. In Q3, the company generated RMB 8.8 billion (USD 1.2 billion) from vehicle sales, a 12.1% year-on-year increase and a 29.0% rise from Q2. Gross margins climbed to 8.6%—a turnaround from the -6.1% recorded a year ago.
These gains have helped narrow losses. The net loss for the quarter stood at RMB 1.81 billion (USD 253.4 million), nearly halved from RMB 3.89 billion (USD 544.6 million) in Q3 2023, though slightly wider than Q2’s RMB 1.28 billion (USD 179.2 million) due to rising costs. The company’s cost of sales rose to RMB 8.56 billion (USD 1.2 billion), up 22.7% quarter-on-quarter, reflecting the challenges of scaling production amid aggressive price-based competition.
Still, Xpeng CEO He views the P7+ as a new starting point for improving margins. Xpeng also boosted R&D spending by 25.1% YoY to RMB 1.63 billion (USD 228.2 million), signaling its commitment to innovation while retaining a robust financial cushion.
At a starting price of RMB 119,800 (USD 16,772), the Mona M03 has become a surprise hit. Preorders surged past expectations before its launch, surpassing G6 benchmarks. The compact electric vehicle has achieved consecutive months of 10,000-unit deliveries, underscoring its widespread appeal.
Yet, Xpeng faces a double-edged sword: demand has outstripped even its most ambitious forecasts. Some Mona M03 buyers now face wait times as long as 17 weeks—close to four months—leading to concerns about missed trade-in policy windows. Acknowledging these challenges, the automaker announced plans to increase production capacity by 30–40% in November and December, with a target of 20,000 units per month by early 2025.
Adding to Xpeng’s delivery pressures is the P7+, with over 30,000 preorders already in the pipeline. Combined, these models are now being produced on double shifts, straining Xpeng’s supply chain.
By October, Xpeng had delivered 122,478 vehicles year-to-date, including 23,917 units in that month alone. With stable production, monthly sales are poised to exceed 30,000 vehicles. Xpeng forecasts fourth-quarter deliveries of 87,000–91,000 vehicles, generating revenue of RMB 15.3–16.2 billion (USD 2.1–2.3 billion).
While 2024 ends on a high note, Xpeng’s real transformation hinges on two key developments in 2025: its collaboration with Volkswagen and the rollout of its range extension technology.
In July, Volkswagen deployed hundreds of employees to Xpeng’s facilities to co-develop electronic and electrical architecture. By October, reports indicated that their joint project had already reached the body-in-white stage, with mass production likely by 2025—a year ahead of schedule.
The partnership extends beyond China to Volkswagen’s modular electric drive matrix (MEB) platform, opening doors to new markets. Service revenue from this collaboration surged 90.7% YoY in Q3 to RMB 1.31 billion (USD 183.4 million), with a 60.1% profit margin—contributing to Xpeng’s record gross margin of 15.3%.
In November, Xpeng unveiled Kunpeng, its next-generation range extension platform that offers a pure electric range of 430 kilometers, a total range exceeding 1,400 km, and a charging rate of up to 5C.
The company’s first range-extended SUV, codenamed G01, is set to hit the market in late 2025. Targeting the premium segment, it’s positioned as a high-end offering with prices above RMB 200,000 (USD 28,000). By 2025, Xpeng plans to launch at least four new EV models.
Xpeng’s Q3 performance, underpinned by financial strength, surging demand, and strategic alliances, paints a picture of a company on the brink of transformation. As 2025 approaches, Xpeng’s ascent into the industry’s upper echelon seems not just possible, but inevitable.
KrASIA Connection features translated and adapted content that was originally published by 36Kr. This article was written by Han Yongchang for 36Kr.