Earnings Call Insights: XPeng Inc. (XPEV) Q3 2025
Management View
- He Xiaopeng, Co-founder, Chairman & CEO, highlighted record results in key operating metrics for Q3 2025, including vehicle deliveries of 116,007 units, a 149% increase year-over-year. He stated, “The all-new XPeng P7 launched recently quickly became one of the top 3 BEV sedans priced between RMB 200,000 to RMB 300,000 boosting monthly deliveries to over 40,000 units starting in September.” Gross margin surpassed 20% for the first time, and the company reduced its net loss further, with the goal of achieving breakeven in Q4.
- CEO He emphasized the advancement and integration of physical AI, aiming for mass production of the VLA 2.0 model, Robotaxi, and humanoid robot in 2026. He detailed the company’s commitment to open sourcing its physical world model and launching Robotaxi services, stating, “We plan to open source our physical world model, launch Robotaxi services in partnership with mobility platforms and relieve our humanoid robot SDK.”
- Presales for the XPeng X9 Super Extended-Range EV have seen preorders nearly three times higher than the previous X9, with official launch and deliveries set for November 20. He expects to “reach a new delivery record in December.”
- International expansion was highlighted with monthly overseas deliveries exceeding 5,000 units in September, and the commencement of localized production in Austria and Indonesia. The company opened 56 new overseas stores and now operates in 52 countries and regions.
- He Xiaopeng indicated, “We project fourth quarter revenue to be roughly between RMB 21.5 billion to RMB 23 billion, up 33.5% to 42.8% from the previous year.”
- Jiaming Wu, Vice President of Finance & Accounting, stated, “Our total revenues were RMB 20.38 billion for the third quarter of 2025, an increase of 101.8% year-over-year and an increase of 11.5% quarter-over-quarter.”
Outlook
- CEO He forecasted Q4 deliveries between 125,000 and 132,000 units, reflecting a year-over-year growth of 36.6% to 44.3%. Fourth quarter revenue is projected at RMB 21.5 billion to RMB 23 billion, representing a 33.5% to 42.8% year-over-year increase.
- Management reiterated the goal to achieve breakeven in Q4, noting, “Our goal is to achieve breakeven for the company in the fourth quarter.”
- The company plans to launch 3 super extended-range products in Q1 2026 and 4 new dual energy models in 2026, targeting new market segments and expanding the total addressable market.
Financial Results
- Total revenues for Q3 2025 were RMB 20.38 billion, with vehicle sales revenue at RMB 18.05 billion, and services and others at RMB 2.33 billion. Gross margin was 20.1%, an increase from 17.3% in Q2 2025. Vehicle margin was 13.1%, compared to 14.3% in Q2 due to targeted promotions.
- R&D expenses rose to RMB 2.43 billion, while SG&A expenses increased to RMB 2.49 billion, both reflecting the ramp-up in new models and technology investments. Loss from operations narrowed to RMB 0.75 billion, and net loss to RMB 0.38 billion.
- Cash and cash equivalents, restricted cash, short-term investments, and time deposits totaled RMB 48.33 billion at quarter end.
Q&A
- Tim Hsiao, Morgan Stanley, asked about XPeng’s long-term competitive advantage in physical AI. CEO He Xiaopeng explained that “the traditional way for automakers to make money is completely different from the new physical AI model… everything boils down to the definition of the future tech.”
- Hsiao also inquired about revenue from Volkswagen collaboration. Charles Zhang, Vice President of Corporate Finance and BW Projects, responded, “The revenue from technical collaboration in Q4 will be expected at a comparable level we see in Q3 2025… as our jointly developed vehicle SOP from early next year, and we would expect the revenue from the Turing SoC will ramp up with the sales volume.”
- Y.C. Lai, JPMorgan, focused on the humanoid robot roadmap and commercialization milestones. CEO He Xiaopeng noted the entry into “the 1.0 stage of our new generation of mass-produced models next month” and commercial deployment in XPeng stores and campuses in 2026.
- Ming-Hsun Lee, BofA Securities, asked about launching Robotaxi services and XPeng’s technology path. CEO He described the planned launch of three Robotaxi models in 2026, emphasizing the cross-domain integration and the ability to commercialize fully shared L4 capability.
- Tina Hou, Goldman Sachs, questioned revenue breakdowns for new businesses. Gui Hongdi indicated no numerical guidance but pointed to volume and scale-level production for flying cars, humanoid robots, and Robotaxi within 12 months.
- Pingyue Wu, Citic Securities, asked about EREV model growth and robot affordability. CEO He stated, “we can expect to actually see several times of quarter-over-quarter growth when the new version of X9 actually get delivered… we also will try our best to make the pricing of robots as affordable as possible.”
- Xiaoyi Lei, Jefferies, inquired about overseas localized production. Gui Hongdi projected rising capacity at new plants in Austria and Indonesia and higher profit contribution from international markets.
Sentiment Analysis
- Analysts were inquisitive and pressed for details on physical AI, collaboration revenue, and commercialization of new technologies, reflecting a neutral to slightly positive tone. Questions were persistent but not overtly skeptical.
- Management maintained a confident tone in both prepared remarks and answers. CEO He used phrases like “I’m confident” and “We believe,” signaling strong conviction in strategic direction and targets. Charles Zhang and Gui Hongdi provided detailed, clear responses on revenue and operational plans.
- Compared to the previous quarter, management’s tone shifted from optimistic about foundational progress to confident in imminent scale and commercialization, while analysts’ tone remained consistently focused on execution and milestones.
Quarter-over-Quarter Comparison
- Guidance for Q4 2025 is more specific, with delivery and revenue targets provided, versus Q3 2025’s broader strategic outlook.
- Strategic focus shifted from foundation building and tech platform rollout in Q2 to rapid commercialization, breakeven, and global expansion in Q3.
- Discussion of physical AI, Robotaxi and humanoid robots became more concrete, with clear timelines and preorders for new models highlighted in Q3.
- Management’s confidence increased, with repeated references to operational records and breakeven ambitions. Analysts continued to probe technology differentiation and commercialization pathways.
- Key metric changes include higher gross margin, narrowed net loss, and increased cash reserves in Q3 compared to Q2.
Risks and Concerns
- Management acknowledged challenges in mass production and commercialization of humanoid robots, citing integration and training complexities.
- CEO He Xiaopeng noted, “IRON’s mass production is probably the most challenging kind of vehicle or products I’ve ever worked on at XPeng Motors.”
- Concerns over high R&D and SG&A expenses were addressed by linking investments to future product launches and market growth.
- Analysts remained interested in XPeng’s ability to sustain international growth and maintain profitability amid rapid expansion.
Final Takeaway
XPeng’s Q3 2025 call underscored a period of record performance and strategic transformation, with management projecting Q4 deliveries up to 132,000 units and revenue as high as RMB 23 billion. The company highlighted advances in physical AI, expanding global presence, and the commercialization of Robotaxi and humanoid robots. Management reinforced its commitment to breakeven in Q4, leveraging strong operational metrics and targeted R&D investments to position XPeng as a leader in next-generation mobility and intelligent technology.