XPeng Inc (XPEV) Q2 2025 Earnings Call Highlights: Record Deliveries and Revenue Surge Amidst ...

This article first appeared on GuruFocus.

Deliveries: 103,181 units, a 242% increase year-over-year. Total Revenue: RMB18.27 billion, an increase of 125.3% year-over-year and 15.6% quarter-over-quarter. Vehicle Sales Revenue: RMB16.88 billion, an increase of 147.6% year-over-year and 17.5% quarter-over-quarter. Services and Others Revenue: RMB1.39 billion, an increase of 7.6% year-over-year and a decrease of 3.5% quarter-over-quarter. Gross Margin: 17.3%, compared to 14% in Q2 2024 and 15.6% in Q1 2025. Vehicle Margin: 14.3%, compared to 6.4% in Q2 2024 and 10.5% in Q1 2025. R&D Expenses: RMB2.21 billion, an increase of 50.4% year-over-year and 11.4% quarter-over-quarter. SG&A Expenses: RMB2.17 billion, an increase of 37.7% year-over-year and 11.4% quarter-over-quarter. Net Loss: RMB0.48 billion, compared to RMB1.28 billion year-over-year and RMB0.66 billion quarter-over-quarter. Cash and Cash Equivalents: RMB47.57 billion as of June 30, 2025.

Warning! GuruFocus has detected 1 Warning Sign with XPEV.

Release Date: August 19, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

XPeng Inc (NYSE:XPEV) achieved a record high performance in Q2 2025 with deliveries reaching 103,181 units, marking a 242% increase year-over-year. The company's vehicle gross margin increased by 3.8 percentage points quarter-over-quarter to 14.3%, marking the eighth consecutive quarter of improvement. XPeng Inc (NYSE:XPEV) reported a significant increase in total revenues, reaching RMB18.27 billion, a 125.3% increase year-over-year. The launch of the G7 model featuring in-house developed AI technology has been successful, becoming a top competitor in its category. XPeng Inc (NYSE:XPEV) has strong overseas growth, with deliveries exceeding 18,000 units in the first half of 2025, a 200% increase year-over-year.

Negative Points

Despite narrowing, XPeng Inc (NYSE:XPEV) still reported a net loss of RMB0.48 billion for Q2 2025. R&D expenses increased by 50.4% year-over-year, reflecting higher costs related to new vehicle models and technologies. SG&A expenses rose by 37.7% year-over-year, driven by higher commissions and marketing expenses. The average selling price of XPeng Inc (NYSE:XPEV)'s vehicles has declined over the past two years, impacting brand positioning. The company faces intense price competition in the market, which could affect long-term profitability.

Q & A Highlights

Q: How does XPeng plan to reverse the trend of declining average selling prices and upgrade its brand positioning? A: Xiaopeng He, Chairman and CEO, explained that XPeng is focusing on product layout, leveraging technology, emotional appeal, and brand strength to increase premiums. The upcoming P7 and X9 models, priced above RMB300,000 and RMB400,000 respectively, are expected to drive this change. The company is also investing in technology and aesthetics to enhance its brand and expects to see improvements in ASP, gross profit, and net profit by 2026-2027.

Story continues

Q: What is XPeng's competitive advantage in smart driving technology amidst increasing competition? A: Xiaopeng He highlighted that XPeng's Turing AI SoC provides a significant computing power advantage, achieving 2,250 tops compared to competitors' 100-700 tops. This allows for better data processing and model scaling, enhancing the smart driving experience. XPeng plans to launch its VLA model soon and expects to significantly outperform competitors by next year.

Q: Can you provide more details on XPeng's cooperation with Volkswagen and its expected revenue impact? A: Charles Zhang, VP of Corporate Finance, stated that XPeng is expanding its collaboration with Volkswagen to include ICEV and PHEV models in China. Revenue from this partnership will start once these vehicles begin production. The collaboration is expected to create significant strategic value and provide a stable revenue stream.

Q: What are XPeng's plans for its robotaxi business, and will current vehicles support Level 4 functionality? A: Xiaopeng He mentioned that XPeng plans to pilot L4-capable vehicles in 2026, subject to regulatory approvals. The company aims to differentiate its consumer vehicles from robotaxis, focusing on strengthening learning and operational trials before expanding partnerships.

Q: How did XPeng achieve a significant improvement in vehicle gross margin in Q2 2025? A: Jiaming Wu, VP of Finance, attributed the improvement to a better product mix, particularly the new G6 and G9 models, which have healthier margins. The company also benefited from scale efficiencies and supply chain optimizations, contributing to the margin increase.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

View comments