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XPeng (XPEV) provided strong upside results for 3Q25, driven by a 149.3%?yr/yr surge in deliveries to 116,007 vehicles. However, the company’s Q4 revenue guidance of RMB?21.5?-RMB?23.0?bln and expected vehicle volumes of 125,000-132,000 fell short of the FactSet Consensus estimates, sparking a sharp selloff in the stock.

• Q3 revenue rose to RMB?20.38?bln, up 101.8%?yr/yr, driven by strong volume growth from newly launched models.
• Deliveries of 116,007 units, up 149.3%?yr/yr and 12.4%?qtr/qtr, set a new record for the company.
• Vehicle gross margin contracted qtr/qtr to 13.1% from 14.3% in Q2, although it remains up yr/yr.
• SG&A expenses increased sharply by 33%, reflecting higher marketing and franchise commission costs. As a result, XPEV remained unprofitable with a non-GAAP net loss of RMB?(150)?mln, although that compares favorably to the loss of RMB?(1.53)?bln a year earlier.
• XPEV's weak guidance reflects rising competition in China’s EV market, especially in the mass-market segment, and margin pressure from new model launches.
• XPEV recently launched its mass-market model Mona M03 and is also ramping up investment in longer-term bets like flying-car concepts and humanoid robots, which may weigh investor sentiment.

Briefing.com Analyst Insight:

While XPEV delivered an impressive volume breakout in Q3, the margin squeeze and low-end pivot raise concerns about profitability going forward. The strong delivery growth vindicates XPEV’s product ramp, but the contraction in vehicle margin and big SG&A increase suggest cost pressures are mounting. The softer Q4 guidance underscores the intensifying competition in China’s EV market and questions around whether XPEV can sustain this growth while improving profitability. The rollout of the Mona M03 signals XPEV’s ambition to penetrate the mass-market segment, but such a move may compress margins further unless scale and cost efficiency follow quickly. Meanwhile, the company’s ambitious investments in flying cars and humanoid robots are exciting long-term propositions, yet they also represent a drag on near-term cash flow and may dilute management focus. XPEV appears to be in a transition phase: strong growth momentum, yet not yet delivered consistent earnings, and faces a tougher competitive environment ahead. Until we see evidence of margin recovery and sustained profitability, the valuation remains linked more to execution risk than to expansion potential alone.