XPeng, Inc. ADR ((XPEV)) has held its Q2 earnings call. Read on for the main highlights of the call.
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The recent earnings call for XPeng, Inc. ADR painted a picture of robust performance and strategic growth, underscored by significant increases in deliveries, revenue, and gross margins. The company is well-positioned for future growth through strategic expansions and partnerships, as well as successful new model launches. However, challenges such as net losses and market competition pressures persist.
Record Deliveries and Revenue Growth
XPeng achieved a remarkable milestone with deliveries reaching 103,181 units, marking a 242% increase year-over-year. This surge in deliveries contributed to total revenues of RMB 18.27 billion for the second quarter of 2025, reflecting a 125.3% increase compared to the previous year.
Improved Gross Margins
The company reported an improvement in vehicle gross margin, which increased by 3.8 percentage points quarter-over-quarter to 14.3%. This contributed to an overall gross margin improvement to 17.3%, showcasing XPeng’s efficiency in managing production costs and enhancing profitability.
Strong Cash Position
XPeng’s financial health is bolstered by a strong cash position, with free cash flow in Q2 exceeding RMB 2 billion and total cash on hand surpassing RMB 47.5 billion. This provides the company with a solid foundation to support its growth initiatives and strategic investments.
Successful New Model Launches
The launch of the G7 model, featuring in-house developed Turing AI SoC, has been a success, becoming a top seller. Additionally, the new P7 model has received strong presales orders, indicating positive market reception and potential for future revenue growth.
Expansion and Strategic Partnerships
XPeng is expanding its reach through strategic partnerships, notably with Volkswagen, which now includes ICEV models. The company also reported a significant increase in overseas deliveries, up by over 200% year-over-year, highlighting its growing international presence.
Net Losses and Operational Challenges
Despite the positive trends, XPeng reported a net loss of RMB 0.48 billion for Q2 2025, though this is an improvement from RMB 1.28 billion year-over-year. The increase in operating expenses, driven by higher R&D and SG&A costs, poses a challenge that the company needs to address.
Price Competition Impact
The intense price competition in the market was highlighted as a concern, affecting XPeng’s pricing strategies and potentially leading to ASP downtrends. The company must navigate these competitive pressures to maintain its market position.
Forward-Looking Guidance
Looking ahead, XPeng forecasts deliveries between 113,000 to 118,000 units for the third quarter, representing a year-over-year growth of 142.8% to 153.6%. Revenue is projected to reach between RMB 19.6 billion and RMB 21 billion, indicating a 94% to 107.9% increase year-over-year. The company aims for sustainable profitability, focusing on expanding market share and leveraging disruptive AI innovations over the next three years.
In summary, XPeng’s earnings call reflects a company on the rise, with strong performance metrics and strategic initiatives paving the way for future growth. While challenges such as net losses and market competition remain, XPeng’s robust cash position and successful new model launches provide a solid foundation for continued success.