Chinese EV maker Xpeng posts record quarterly revenue as deliveries surge despite price war

Chinese electric vehicle maker Xpeng has forecast that its revenue will almost double in the third quarter, after reporting record sales and a sharply reduced loss.

The Guangzhou-based company said it expected revenue between 19.6 billion yuan ($2.73 billion) and 21 billion yuan, a rise of up to 108% compared with a year earlier. Vehicle deliveries are projected to reach as many as 118,000, more than double last year’s figure.

Shares in the US-listed group climbed over 4% after the announcement. The update came after the company reported record revenue for the second quarter, helped by higher deliveries and improved profit margins. Xpeng’s US-listed shares rose more than 4% in response.

Xpeng sees record sales and shrinking losses

During the three months to June, Xpeng recorded a 125% year-on-year jump to 18.27 billion. This was, however, slightly below analyst expectations.

According to the company, deliveries during the quarter reached a record 103,181 vehicles, within the company’s guidance range, although this was also below analysts’ projections. Compared with the prior year figures, deliveries jumped by nearly 242%.

This solid performance helped reduce net losses to 480 million yuan, which is the lowest since 2020, and represents a 63% decline from the same quarter in 2024. Losses went down to 390 million yuan on an adjusted basis, compared with 1.22 billion in 2024.

The company has credited its cost-cutting measures and a shift in its product mix for improving its vehicle margin to 14.3%, more than double the level seen a year earlier.

Gross margins jumped to a record 17.3%. Xpeng has been pouring huge sums of money into research and development, with total spending jumping by 50% year-on-year to 2.2 billion yuan. A significant chunk of the money has gone into new models and self-driving technology.

One of Xpeng’s major projects is its in-house Turing chip, which was made specifically for its self-driving systems.

“XPeng’s in-house Turing chip, once mass-produced, could be a pivotal step in the company’s intelligent driving ambitions.”

Rosalie Chan, analyst at research firm Third Bridge

The EV maker is also deepening ties with other automakers. A technology partnership with Volkswagen, initially focused on battery-electric cars, has been expanded to cover plug-in hybrid and even gasoline platforms in China.

China is now the largest auto market in the world due to the ability of its companies to make and sell vehicles at lower costs than Western automakers. But that has crowded the market, leading to a price war and a battle for technological supremacy.

Xpeng is surviving in a crowded market, global ambitions

China has become the world’s largest auto market because of its ability to produce vehicles at a lower cost as compared to Western rivals. Even with the electric vehicle sales, the country has become the battleground for autonomous driving supremacy.

However, competition is now intense, igniting a price war as firms fight for market share and tech leadership.

The company, however, remains upbeat that a combination of AI, tighter integration with partners, and steady cost reductions will help it survive the pressure.

Xpeng ended the second quarter with cash reserves of 47.6 billion yuan, up from 42 billion yuan at the end of last year. That war chest gives it the financial strength to keep investing in new technology and models even as pressure builds across the industry.

The firm expects to deliver more than 75,000 vehicles in the remaining two months of the third quarter after posting deliveries of nearly 37,000 in July alone. If achieved, this would cement its position as one of the fastest-growing players in China’s EV sector.

Despite persistent challenges, including weakening consumer sentiment in parts of China’s economy, Xpeng is betting that strong demand, improved margins, and new technology will push it closer to profitability.

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