Chinese electric vehicle (EV) maker XPeng (XPEV) reported a narrower-than-anticipated loss for the third quarter of 2025, driven by strong deliveries and margin expansion. However, XPEV stock was down 3.6% in Monday’s pre-market trading as the company’s fourth-quarter revenue guidance lagged expectations.
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XPeng’s Q3 Bottom Line Reflects Notable Improvement
XPeng’s Q3 revenue increased by 101.8% year-over-year to RMB 20.38 billion ($2.86 billion), driven by a 149.3% rise in its deliveries to 116,007 vehicles. Meanwhile, the company reported a non-GAAP net loss of RMB 0.16 per ADS (American Depositary Share), marking a solid improvement from the net loss of RMB 1.62 per ADS in the prior-year quarter. Analysts were expecting a loss of RMB 0.57 per ADS on revenue of RMB 20.63 billion.
The bottom line gained from a jump in Q3 2025 gross margin to 20.1%, up from 15.3% in the prior-year quarter. Interestingly, this marked the first time that the Chinese EV maker’s gross margin crossed the 20% mark. Also, XPeng’s vehicle margin expanded to 13.1% in Q3 2025 compared to 8.6% in the same quarter of the previous year, reflecting the company’s cost reduction efforts.
XPeng delivered solid Q3 earnings despite intense competition in the Chinese EV market, thanks to a strong product mix and advanced autonomous-driving tech. It aims to turn profitable in the fourth quarter. Meanwhile, XPeng is also seeking growth beyond EVs, with investments in humanoid robots and robotaxis. CEO He Xiaopeng said, “I firmly believe XPeng will evolve into a global embodied AI company.”
XPEV’s Guidance Fails to Impress
Looking ahead, XPeng expects Q4 deliveries in the range of 125,000 to 132,000 vehicles, indicating year-over-year growth of 36.6% to 44.3%.
Meanwhile, Q4 revenue is expected to be between RMB 21.5 billion and RMB 23.0 billion. The company’s Q4 2025 top-line guidance fell short of the consensus estimate of RMB 25.09 billion.
Is XPEV Stock a Good Buy?
Wall Street has a Moderate Buy consensus rating on XPeng stock based on eight Buys, two Holds, and one Sell recommendation. The average XPEV stock price target of $28.27 indicates 13% upside potential.
These ratings/price targets are expected to be revised as analysts react to Q3 results and the company’s fourth-quarter guidance.
