On the evening of November 19th, Xiaopeng Motors (09868. HK/XPEV. US) released its financial report for the third quarter of 2024.
During the reporting period, the company's total revenue exceeded 10 billion yuan, an increase of 18.4% year-on-year and 24.5% month on month; Due to cost reduction and improved product portfolio, the gross profit margin has significantly increased to 15.3%, setting a new record high for a single quarter; The net loss for the third quarter was 1.81 billion yuan, which narrowed year-on-year and expanded month on month.
Multiple data have shown strong performance, and Xiaopeng claimed that the company has provided the strongest financial report in history. Xiaopeng Motors Chairman and CEO He Xiaopeng said, "Our system capabilities have been comprehensively improved after the transformation. The successful launch of MONA M03 and P7+marks the beginning of a positive cycle of growth for our large product cycle.
Supported by the two major products of Xiaopeng MONA M03 and P7+, Xiaopeng also provided the strongest single quarter delivery guidance in history, with a delivery volume of 87000 to 91000 new cars in the fourth quarter, an increase of about 44.6% to 51.3% year-on-year.
After nearly a year of downturn, Xiaopeng finally gained some confidence with the help of two popular car models. Under the strong product cycle and positive cycle, Xiaopeng has set its profit target for the fourth quarter of 2025.
Continuous revenue generation through 'big and small cooperation', low-priced models have not affected the repair of gross profit margin
Revenue exceeded 10 billion yuan. In terms of revenue structure, during the reporting period, automobile sales revenue reached 8.8 billion yuan, an increase of 12.1% year-on-year and 29.0% month on month.
Based on the delivery of 46533 vehicles in the third quarter, Xiaopeng's single bike revenue declined to below 190000 yuan, mainly due to the impact of the vehicle model structure. The low-priced Mona M03 became the main sales support and its proportion in the vehicle model structure increased.
Service and other revenue reached 1.31 billion yuan, a year-on-year increase of 90.7% and a month on month increase of 1.1%. The growth in this revenue was mainly due to the increase in technology research and development services related to platform and software strategy and electronic and electrical architecture technology strategic cooperation with Volkswagen Group.
The "big and small cooperation" has become a regular income, and the profit effect it brings is still expanding. In the third quarter, the gross profit margin of other businesses increased to 60%. In addition to the mass technology licensing fee charged based on the G9 platform, the technology licensing fee based on the EEA technology architecture has also begun to be recognized in the third quarter.
Due to cost reduction and improved product portfolio, Xiaopeng Motors' gross profit margin has continued to increase, with a comprehensive increase to 15.3%, reaching a historical high, compared to -2.7% in the same period last year and 14.0% in the second quarter of this year; The more critical gross profit margin for automobiles is 8.6%, compared to -6.1% in the same period last year, and 6.4% in the second quarter of this year, continuing to recover on a month on month basis.
The outside world was originally concerned that the large-scale delivery of the low-priced model MONA M03 would not provide a significant boost to the automotive business's gross profit margin. However, now it seems that Xiaopeng still has good control over the cost of low-priced models and has achieved continuous gross profit margin repair under the delivery of the low-priced M03.
He Xiaopeng attributed the increase in gross profit margin to two aspects: the comprehensive realization of technology cost reduction and the growth of scale. Thus, Xiaopeng Motors has achieved continuous improvement in gross profit margin for five consecutive quarters.
But looking at the level of new forces in the same period, the gross profit margin of Ideal Automobile is 21.5%, the gross profit margin of Jike Automobile is 16%, the gross profit margin of Xiaomi Automobile is 17.1%, and Xiaopeng is still inferior to its competitors.
At the financial report conference, He Xiaopeng stated that the Xiaopeng P7+will become a new starting point for the overall improvement of the gross profit margin of the new generation of Xiaopeng models. Both the new model and this model will be equipped with a series of platform based new technologies launched by P7+, and it is expected that the steady-state gross profit margin of the new generation of models can reach double-digit levels. In other words, Xiaopeng P7+has a very high profitability.
The net loss in the third quarter was 1.81 billion yuan, compared to 3.89 billion yuan in the same period last year, and 1.28 billion yuan in the second quarter of this year, which narrowed year-on-year but expanded month on month. Based on sales data, Xiaopeng incurred a loss of 38900 yuan per car sold this quarter, which is slightly lower than the previous quarter's loss of 42300 yuan.
In the first three quarters of this year, Xiaopeng Motors incurred a cumulative loss of 4.46 billion yuan, and the fourth quarter of 2025 is the expected profit point for He Xiaopeng. I believe that we will only enter a period of faster growth and profitability in the fourth quarter of 2025
Our system capabilities have been comprehensively improved after the transformation, and the successful launch of M03 and P7+marks the beginning of a positive cycle of growth for our large product cycle He Xiaopeng stated that during the big product cycle, Xiaopeng Motors will not only achieve sales targets and impact new levels, but also steadily move towards scale profitability.
Based on strong financial performance, Xiaopeng expects to enter a positive cycle phase in the fourth quarter, with free cash flow turning positive in the first half of the year and cash on hand expected to return to the level of 40 billion yuan; The total delivery volume of automobiles is expected to be between 87000 and 91000 units, an increase of approximately 44.6% to 51.3% year-on-year; The total revenue will range from 15.3 billion yuan to 16.2 billion yuan, with an annual increase of 17.2% to 24.1%.
In October, the delivery volume of Xiaopeng Motors was 23917 units. Based on this calculation, Xiaopeng needs to deliver 63083 to 67083 units in November and December, with a monthly average of around 32000 units.
Boosting production capacity, impacting 30000 deliveries in November
The two models, MONA M03 and P7+, are expected to reach double-digit levels in gross profit margin, and the rising sales have also raised high expectations for He Xiaopeng's future market performance.
But production capacity has always been a hurdle before Xiaopeng's new car goes from being a hit model to becoming a regular hot seller. The Xiaopeng MONA M03, which went viral as scheduled, encountered "delivery difficulties" nearly two months after its launch. According to the Xiaopeng car app, the delivery cycle for the long endurance version of the Xiaopeng MONA M03 is 9-13 weeks, and the delivery cycle for the ultra long endurance version is 11-15 weeks. The extended delivery cycle has led to many car owners canceling their orders.
In this financial report meeting, regarding the issue of "production capacity", the management of Xiaopeng Motors stated that through the dual shift production plan, the annual production capacity of Xiaopeng's Guangzhou and Zhaoqing factories is currently about 200000 to 300000 units. Xiaopeng has planned the production plan before 2026 and cooperated with suppliers to expand production capacity. Driven by the two models, He Xiaopeng expects the delivery volume to exceed 30000 units in November, and the delivery volume of Xiaopeng P7+in December will exceed 10000 units.
For the reasons why these two cars have performed well in the market, He Xiaopeng said that the attractiveness of intelligent driving is increasing, and users' mentality has changed. The core reason why users choose P7+is that the entire series comes standard with advanced intelligent driving.
In his view, from the perspective of the overall development pattern of the industry, the next three years will be the knockout stage of China's automotive industry: on the one hand, the penetration rate of new energy vehicles in China will be unstoppable, increasing to 85% or even above; On the other hand, He Xiaopeng believes that the transformation and driving force of AI will be a key factor in the reintegration of the entire market share towards the next stage.
However, in overseas markets, intelligence has not yet become the core driving force for attracting consumers. He Xiaopeng pointed out that there is a significant difference in the acceptance of intelligent technology between overseas users and Chinese users. Under the goal of accelerating towards the global market, extended range products have also become the second growth driver in the global market.
The next generation of range extender will work together with our AI engine to drive Xiaopeng's strong momentum of rapid global development, "said He Xiaopeng. In the third quarter, overseas sales increased by 70% month on month, accounting for 15% of the company's sales. By 2025, Xiaopeng Motors plans to expand its sales network to over 90% of the new energy vehicle market outside of North America, with over 300 stores. In the next three years, Xiaopeng will maintain a high-speed growth momentum and rank first in the high-end export sales of new energy among Chinese car companies.
According to the plan, Xiaopeng Motors will adopt a "dual energy" approach and launch a batch of new cars that support pure electric and extended range. Xiaopeng plans to launch at least four new cars by 2025.
After a two-year bearish period, I believe Xiaopeng is about to enter a new positive cycle stage, "He Xiaopeng said in a conference call. The company will enter the first quarter of 2025 with tens of thousands of orders in hand, which will make Xiaopeng's delivery volume more stable in the first quarter of next year and lay a solid foundation for a significant increase in sales next year.
The time point for reversing the loss situation and achieving profitability is towards the fourth quarter of 2025. Whether it is to impact monthly sales of over 30000 or to push the steady-state gross profit margin to double digits, both MONA M03 and P7+models have been entrusted with important responsibilities by Xiaopeng. Under the strongest financial report, providing the strongest delivery guidance, whether we can emerge from the two-year bearish period and achieve true "blood recovery", with the support of popular car models, has become the most realistic issue at present.
What is more worthy of market attention in the fourth quarter is whether the production capacity of the popular models MONA M03 and P7+can smoothly climb as scheduled and accelerate with the market pace. Meanwhile, with the continued increase in the proportion of MONA M03 and the lower starting price of Xiaopeng P7+compared to P7 family products, can the gross profit margin of the automotive business continue to recover and boost Xiaopeng's bicycle profitability as scheduled.