• Vehicle Deliveries: 46,533 units in Q3 2024, a 54% increase quarter over quarter and a 16% increase year over year.
• Gross Profit Margin: 15.3% in Q3 2024, up from 14% in Q2 2024 and negative 2.7% in Q3 2023.
• Total Revenue: RMB10.1 billion in Q3 2024, an 18.4% increase year over year and a 24.5% increase quarter over quarter.
• Vehicle Sales Revenue: RMB8.8 billion in Q3 2024, a 12.1% increase year over year and a 29% increase quarter over quarter.
• Services and Others Revenue: RMB1.31 billion in Q3 2024, a 90.7% increase year over year and a 1.1% increase quarter over quarter.
• Vehicle Margin: 8.6% in Q3 2024, compared to negative 6.1% in Q3 2023 and 6.4% in Q2 2024.
• R&D Expenses: RMB1.63 billion in Q3 2024, a 25.1% increase year over year and an 11.3% increase quarter over quarter.
• SG&A Expenses: RMB1.63 billion in Q3 2024, a 3.5% decrease year over year and a 3.8% increase quarter over quarter.
• Net Loss: RMB1.81 billion in Q3 2024, compared to RMB3.89 billion in Q3 2023 and RMB1.28 billion in Q2 2024.
• Cash and Cash Equivalents: RMB35.75 billion as of September 30, 2024.

• Warning! GuruFocus has detected 3 Warning Signs with XPEV.

Release Date: November 19, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• XPeng Inc (NYSE:XPEV) delivered 46,533 units in Q3 2024, marking a 54% increase quarter over quarter and a 16% increase year over year.
• The company's gross profit margin improved to 15.3% in Q3 2024, demonstrating continuous improvement for five consecutive quarters.
• XPeng Inc (NYSE:XPEV) has implemented comprehensive changes in strategies, products, and organizational structure, enhancing its competitive edge.
• The launch of the P7+ model has been a success, with firm orders exceeding 30,000, indicating strong market demand.
• XPeng Inc (NYSE:XPEV) is expanding its global presence, with overseas sales accounting for 15% of total sales volume in Q3 2024, and plans to further expand its international sales network in 2025.

Negative Points

• XPeng Inc (NYSE:XPEV) reported a net loss of RMB1.81 billion for Q3 2024, although this is an improvement from the same period in 2023.
• R&D expenses increased by 25.1% year over year in Q3 2024, reflecting higher costs associated with developing new vehicle models.
• Despite improvements, the company still faces challenges in achieving profitability, with a non-GAAP operating margin loss of 15.5% in Q3 2024.
• The company anticipates potential bottlenecks in EV penetration in overseas markets due to inadequate charging infrastructure.
• XPeng Inc (NYSE:XPEV) faces competition in the smart driving technology space, with the need to continuously innovate to maintain its competitive advantage.

Q & A Highlights

Q: In the next three to five years, do you expect the technology gap in smart driving to widen or narrow? How will XPENG ensure consumers appreciate the difference and choose XPENG's cars? A: (Xiaopeng He, CEO) The gap between different EV makers will likely widen due to the need for comprehensive self-developed R&D capabilities, including software, hardware, cloud, and chip development. ADAS capability is crucial, and XPENG aims to deliver on its claims, ensuring the whole vehicle is smart enough to support these capabilities. The future development model will differ from traditional OEMs, setting XPENG apart from competitors.

Q: How can XPENG further narrow its losses and turn to profit next year? A: (Hongdi Gu, President) XPENG has seen operating margin improvements and expects this trend to continue with the launch of the P7+, which has a better margin profile. The company plans to maintain R&D spending below RMB2 billion in Q4 and expects to break even by the end of next year. XPENG anticipates healthy cash flow, with over RMB40 billion on hand by year-end.

Q: What is the export outlook for XPENG in 2024, and how does the company view the potential bottleneck of charging infrastructure overseas? A: (Hongdi Gu, President) XPENG sees robust growth in overseas markets, with exports accounting for around 15% of sales. While some markets lack charging infrastructure, there is still ample growth opportunity for BEV models. XPENG is optimistic about both BEV and extended-range products finding growth opportunities globally.

Q: Can you quantify the factors contributing to the 2.2 percentage point margin expansion in Q3, and do you expect vehicle gross margin to reach double digits in Q4? A: (James Wu, VP of Finance) The margin improvement was driven by engineering cost reductions and battery cost reductions. The P7+ delivery in Q4, with its cost reduction targets, is expected to further improve vehicle margins. Overall margin improvement is anticipated in Q4.

Q: What is XPENG's strategy for long-term cost reduction in EVs, particularly in powertrain and ADAS components? A: (Xiaopeng He, CEO) XPENG aims for significant cost reductions through supply chain optimization, economy of scale, and technology-driven innovations. The company plans to adopt super integration and leverage Tier 1 suppliers' capabilities. Future cost-control outcomes will be driven by technological innovation, not just scale or supply chain optimization.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.