XPeng’s Q4 revenue outlook softens amid fierce competition

Xpeng faces revenue setback

Xpeng projected fourth-quarter revenue between 21.5 billion and 23.0 billion yuan, below analysts’ average estimate of about 26 billion yuan, and its U.S.-listed shares fell by more than 10% after the guidance.

The lower forecast reflected pressure from China’s ongoing price war. This slowdown occurred despite Xpeng and NIO achieving record October deliveries.

Record deliveries meet market pressure

XPeng’s results reflect the impact of China’s prolonged EV price war. The competition has eroded profitability across the industry.

The article noted that XPeng and NIO both delivered record volumes in October while Tesla’s China sales fell to a 3-year low. The contrasting performance highlights uneven pressure across China’s crowded EV market.

Price war pressures revenue

XPeng reported Q3 revenue of 20.38 billion yuan, according to Reuters. The company delivered 116,007 vehicles in Q3, representing 149.3% year-over-year growth.

The report added that XPeng’s net loss narrowed to 380.9 million yuan. The company projected fourth-quarter deliveries of 125,000 to 132,000 vehicles, implying a year-over-year growth rate of roughly 33.5% to 42.8%.

Mona M03 affects brand strength

XPeng lost brand appeal in models above 200,000 yuan, according to analyst Rosalie Chen, cited by Reuters. She said reduced investment in intelligent driving also affected perception.

The Mona 03 has become central to XPeng’s mass-market push. Developed in collaboration with ride-hailing giant DiDi, the Mona 03 marks XPeng’s entry into China’s more affordable EV segment.

Tech investments deepen pressure

XPeng showed work on flying car concepts and humanoid robots at its AI Day event, according to EVXL. These long-term projects require significant research and development funding and represent a major shift beyond traditional automaking.

The company acknowledged that the ambitious projects could put near-term earnings under pressure. XPeng aims to use the robots for factory and warehouse operations, combining innovation with operational efficiency.

Tesla struggles in China

Tesla’s China sales hit a three-year low in October. The company sold 26,006 vehicles, showing a steep decline compared to previous months.

Tesla’s market share in China dropped to 3.2%, while domestic brands like XPeng and NIO delivered record numbers. This highlights how local companies are gaining ground amid intense price competition.

Record quarter but weak outlook

XPeng’s third-quarter results topped revenue expectations, with revenue climbing to 20.38 billion yuan (about $2.85 billion) and net loss narrowing to roughly 380.9 million yuan. That revenue equates to roughly $2.85 billion and represents a 101.8% year-over-year increase driven by record vehicle deliveries.

Despite the strong results, XPeng shares fell by over 10% after the company issued a cautious forecast for Q4. Management projected only 8% to 14% sequential growth in deliveries, which disappointed some investors seeking faster expansion.

Margins continue improving

XPeng’s gross margin hit 20.1% in Q3, according to TIKR, up from 15.3% a year earlier. Vehicle margin reached 13.1%, showing consistent improvement despite intense competition in the EV sector.

The slight sequential decline from Q2 was attributed to promotional discounts. The company noted that product transitions and pricing adjustments contributed to the fluctuation in margins during the quarter.

Cash reserves stay strong

XPeng ended Q3 with approximately 48.3 billion yuan in cash, cash equivalents, restricted cash, short-term investments, and time deposits, equivalent to roughly $6.7 billion at current exchange rates. The strong liquidity supports ongoing research and development, as well as operational expansion.

CEO He Xiaopeng described the quarter as record-breaking, according to TIKR. Revenue, deliveries, and gross margin all reached new highs, providing a financial foundation for the company’s ambitious technology roadmap.

Conservative guidance puzzles investors

XPeng guided Q4 deliveries between 125,000 and 132,000 units, according to EVXL, a cautious forecast compared to its recent momentum. Analysts were surprised by the modest outlook for growth.

Revenue guidance also came in roughly 15% below consensus. Investors expressed concerns about near-term demand and the impact of ongoing pricing pressure in China’s competitive EV market.

Rising costs raise concern

XPeng’s research and development expenses rose 48.7% year over year to about 2.43 billion yuan (roughly $340 million), reflecting heavier investment in autonomous driving and humanoid robots. The company continues to prioritize technological innovation as part of its long-term growth strategy.

Selling, general, and administrative expenses increased 52.6% to around 2.49 billion yuan (about $345 million), largely driven by higher marketing spend and franchisee commission costs. Rising expenses may pressure profitability despite strong delivery numbers in the quarter.

Want to know more? Discover how China’s low-cost EVs are shaping the global market.

Ambitious long-term roadmap

XPeng planned to launch 3 Robotaxi models in 2026, according to TIKR, aiming to expand its autonomous mobility offerings. The CEO also said mass production of the IRON humanoid robot is targeted for the end of 2026.

The company aims to achieve 1 million robot sales annually by 2030. In addition, XPeng will introduce 7 extended-range vehicle models next year, highlighting its continued push into advanced EV technology.

Curious about the bigger picture? Learn why Chinese EV stocks are under pressure as sales momentum slows.

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This slideshow was made with AI assistance and human editing.