Xpeng is gearing up for a robust fourth quarter with a projected surge in deliveries. Anticipating between 59,500 and 63,500 vehicle deliveries from October to December, the company expects a substantial 59% increase from the third quarter. This optimistic outlook is attributed to the popularity of Xpeng’s new models, strategically offered at discounted prices to attract mainland Chinese drivers.
Despite reporting a net loss of US$537 million in the quarter ended September 30, Xpeng remains confident in the positive results of transformative adjustments made earlier in the year. The company’s CEO, He Xiaopeng, is optimistic about accelerated growth in the fourth quarter of 2024.
Xpeng’s third-quarter revenue saw a notable 68.5% quarterly increase to 8.53 billion yuan, aligning with analysts’ estimates. The vehicle margin, indicating the difference between the selling price and tangible costs, showed improvement, standing at minus 6.1%, up from the minus 8.6% in the April to June period. However, Xpeng attributed the negative vehicle margin to aggressive sales promotions and the cancellation of EV purchase cash subsidies by Beijing.
The company did not specify when promotional activities would end, leaving room for further speculation about the impact on future financial performance. Xpeng’s new model, the G6 SUV, played a pivotal role in the company’s success, particularly during discount periods, with its perceived quality and performance resonating well with consumers.
Xpeng, often considered a key player in the Chinese EV market alongside Li Auto and Nio, is positioning itself as China’s response to Tesla. The G6 SUV, highlighted as a competitor to Tesla’s Model Y, boasts semi-autonomous driving capabilities powered by X NGP (Navigation Guided Pilot) software.
In October, Xpeng achieved a milestone with a record 20,002 deliveries, marking a 31% increase from the previous month and surpassing its previous record set in December 2021. Competitor Li Auto also broke its delivery record in October, handing over 40,422 vehicles to mainland Chinese customers, marking a seventh consecutive monthly increase.
As Xpeng continues to navigate the competitive landscape of the Chinese EV market, the company’s leadership remains optimistic about future prospects. With an eye on enhanced free cash flow in the current quarter, Xpeng aims to set the stage for long-term scalable profitability, reinforcing its commitment to sustained success in the evolving electric vehicle industry.
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