Al Root

Shares of Chinese electric-vehicle maker XPeng rose early Tuesday after reporting better-than-expected quarterly results.

Demand was solid in the period and price competition doesn't appear to be getting any worse. That's good news for XPeng and other EV makers.

XPeng on Tuesday announced a third-quarter per-share loss of 14 cents from sales of $1.4 billion. Wall Street was looking for a loss of 30 cents a share from $1.4 billion in sales, according to FactSet.

Margins were stronger than expected. Gross profit margins were 15.3% for the quarter. Analysts were projecting 13.6%.

XPeng delivered 46,533 vehicles in the third quarter, up 16% from the 40,278 delivered in the third quarter of 2023. Vehicle sales grew 12.1% year over year. Revenue growing slower than deliveries has been a theme for Chinese auto makers in 2024 amid stiff competition.

However, total sales grew 18% year over year with service revenue up 91% year over year. Collaboration with Volkswagen helped accelerate growth.

Looking ahead, XPeng expects to ship 87,000 to 91,000 vehicles in the fourth quarter, up about 45% to 51% year over year. Sales are expected to rise about 21%, hitting $2.2 billion, a little better than the $2.1 billion Wall Street projects.

It looked like a solid report. U.S.-listed XPeng stock was up 3.8% in premarket trading at $13.50 a share. S&P 500 futures were down 0.4%. Dow Jones Industrial Average futures were down 0.5%.

Coming into Tuesday, XPeng stock has fallen about 11% this year. Lower prices and higher competition have weighed on investor sentiment.

Management hosts a conference call at 8 a.m. Eastern time to discuss results. Analysts and investors will want to hear more about demand, competition, and the outlook for 2025.

Tesla stock was down 1.3% in premarket trading at $334.34. Strong EV demand in China is good -- China accounted for almost 40% of Tesla's third-quarter deliveries -- but Tesla's stock has been strong since the Nov. 5 U.S. presidential election, gaining 35% through Monday. Tesla shares added 5.6% on Monday after Bloomberg reported President-elect Donald Trump would seek to set a federal standard to help regulate self-driving cars.

Write to Al Root at allen.root@dowjones.com

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November 19, 2024 06:29 ET (11:29 GMT)

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