Xpeng Motors Stock Soars After Impressive Q1 Earnings and Outlook

Xpeng Motors stock (NYSE: XPEV) is trading sharply higher today after the company released its earnings for the March quarter. The Chinese electric vehicle (EV) company not only reported better-than-expected earnings in the quarter but also provided an upbeat outlook. Here are the key takeaways from the report and analysts’ reaction.

Xpeng Motors’ revenues surged 145% YoY to RMB 15.81 billion (approximately $2.18 billion). Despite a minor 1.8% dip from the fourth quarter of 2024, the company’s growth trajectory remains robust. Vehicle sales were the primary catalyst of the company’s growth as the company’s EV deliveries rose 331% YoY to 94,008 units in Q1.

Xpeng Motors Reported an Improvement in Profitability

Xpeng Motors reported a significant expansion of its profit margins. The company’s gross margin for Q1 2025 reached 15.6%, a substantial increase from 12.9% in Q1 2024 and 14.4% in Q4 2024. The company attributed the expansion to ongoing cost reduction efforts and the benefits of economies of scale stemming from increased sales volume.

Xpeng Motors’ vehicle margin expanded to 10.5% in Q1 2025, up from 5.5% in the corresponding period of 2024 and 10.0% in the previous quarter, marking seven consecutive quarters of improvement.

The company’s net loss narrowed to RMB 660 million, which was less than half of what analysts were expecting and narrower than the RMB 1.37 billion loss in the corresponding quarter last year.

“Despite seasonality for auto sales, our quarterly deliveries hit a new historical high, making us the top-selling automaker among emerging EV companies. Positive market feedback strengthened our confidence in our three-year product cycle. We remain committed to our steadfast long-term growth strategy and continue to launch more blockbuster products,” said Xpeng Motors’ CEO Xiaopeng He in his prepared remarks.

He added, “We are just beginning to unleash our growth potential. I believe our strong product cycle, global expansion and accelerated adoption of physical AI technologies, will fuel strong and sustainable growth for XPENG.”

Xpeng Motors Gave an Upbeat Guidance

Xpeng Motors said that it expects to deliver between 102,000 and 108,000 vehicles in the second quarter. The company delivered 35,045 vehicles in April, so the upper end of the guidance implies deliveries of 72,955 between May and June.

Its company’s deliveries have been over 30,000 for six straight month,s and the guidance implies that it would sustain that run rate.

The demand for Xpeng Motors’ Mona MO3, which it launched last year have been quite strong and in April the model’s cumulative deliveries surpassed the milestone of 100,000.

In 2023, Chinese ride-hailing app Didi took a 3.25% stake in Xpeng Motors in exchange for its electric vehicle and autonomous driving assets. As part of that agreement, Xpeng Motors is producing budget cars under the “MONA” brand. The model’s sales have been quite brisk and have been a key driver of its growth in recent quarters.

Xpeng Motors is looking to launch extended-range electric vehicles (EREVs) in China. These cars come with a fuel tank that can extend the vehicle’s range. These vehicles have been quite popular in China. Li Auto, which gets the bulk of its revenues by selling EREVs, delivered over 500,000 vehicles last year, and its cumulative deliveries topped 1 million.

XPEV’s New Models Have Performed Well

While peers like NIO are launching a flurry of new models, Xpeng has managed strong growth with only a couple of new models. For instance, in just five months, its P7+ achieved the production milestone of 50,000.

Xpeng Motors has been posting free cash flows which the company said will enable it to invest in R&D and AI. The company held cash and cash equivalents of $6.24 billion at the end of March which is higher than what it had at the end of December.

Xpeng Motors Is Expanding Globally

Xpeng Motors has been expanding in global markets and added over 40 new overseas stores in Q1 2025, entering key markets like the UK and Indonesia. Overseas sales witnessed a remarkable increase of over 370% year-over-year and the company sees the growth momentum sustaining over the coming few years.

To support its global expansion, Xpeng Motors recently announced a partnership with Plugsurfing for charging infrastructure in Europe. The company has been looking to expand its sales in the continent, which has among the highest EV penetration rates globally, and the partnership with Plugsurfing will provide its customers in the region with 940,000 charging points spread across 27 countries.

Longer charging times, low range, and a lack of charging stations are among the reasons that hamper EV adoption rates. Notably, a well-entrenched EV charging network coupled with lower charging time helps address range anxiety, which is among the key reasons many people refrain from buying an electric car. Tesla, which is the largest EV seller in the US, has built a wide network of charging stations named Superchargers, which are its competitive advantage.

Xpeng Motors has also partnered with German auto giants to jointly produce cars in China, and the two companies are also said to be contemplating expanding their partnership to other international markets.

Xpeng Motors Is Working on Humanoids

XPEV is also working on humanoids and expects mass production next year. During the Q1 earnings call it said, “our fourth-generation robot, celebrated at the Shanghai Auto Show will soon be followed by a fifth-generation model powered by Turing chips significantly enhancing on-device computing capabilities.”

It added, “Our investments in AI vehicles also provide distinct advantages in humanoid robot R&D in China’s robotics industry.”

How Analysts Reacted to XPEV’s Q1 Earnings

After XPEV’s earnings release, Morgan Stanley maintained its “overweight” rating and $26 target price. Analysts have been gradually warming up to the stock as it has shown steady increase in deliveries and margins.