<img src="https://imageproxy.pbkrs.com/https://wpimg-wscn.awtmt.com/17211c9c-46db-4e09-92e8-0a603fb5fe24.jpeg?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" alt="" original-src="https://imageproxy.pbkrs.com/https://wpimg-wscn.awtmt.com/17211c9c-46db-4e09-92e8-0a603fb5fe24.jpeg"/> Author | Wang Xiaojun
Editor | Chai Xuchen
Although XPeng has not yet transitioned from &#34;ICU&#34; to &#34;KTV,&#34; the financial report proves that XPeng has now escaped the danger zone.
In 2024, XPeng's sales have increased, with several standout models, achieving revenue of 40.87 billion yuan, a year-on-year increase of 33.2%, and losses narrowed by 44% compared to the previous year. It can be said that XPeng is currently in its best state, progressing as expected in the positive cycle anticipated by He Xiaopeng.
However, this report also indicates that XPeng is far from being out of the woods. In the past year, it incurred losses of 5.79 billion yuan. It is still a time of continuous challenges, with issues such as an excessively high proportion of low-priced models and gross margins still below industry leaders, highlighting the deep-seated contradiction between XPeng's scale expansion and profitability.
He Xiaopeng has set a profitability target for the fourth quarter of 2025, but how to balance technological investment and costs while doubling sales remains an unresolved challenge.
<h2>Positive Cycle</h2>
In the past year, whether in terms of sales, performance, or public attention, XPeng has finally crawled out of the quagmire of the past few years.
In terms of revenue, XPeng has achieved a dual drive of its main business and technical services.
In 2024, XPeng's total revenue reached 40.87 billion yuan, a year-on-year increase of 33.2%. Among this, automotive sales revenue was 35.83 billion yuan (accounting for 87.7%), a year-on-year increase of 27.9%; service and other income was 5.04 billion yuan (accounting for 12.3%), a year-on-year surge of 89%, mainly from technical cooperation and licensing income with Volkswagen.
Especially the high gross margin characteristics of technical services (57.2%) significantly boosted the overall gross margin, but the automotive business remains the core growth engine.
In terms of gross margin, XPeng has also achieved a balance between scale effects and cost reduction through technology.
XPeng's annual gross margin rose from 1.5% in 2023 to 14.3% last year, with the gross margin of the automotive business turning from -1.6% to 8.3%, reaching a yearly high of 10% in the fourth quarter. On the surface, the recovery of gross margin comes from the consecutive success of two models and XPeng's continuous cost reduction over the past few years.
On one hand, XPeng emphasizes technological equality when pricing its vehicles. For example, since last year, the secret to XPeng's successful models has been equipping all core configurations as standard while offering a highly competitive price.
On the other hand, since 2023, after suffering losses on the G9, XPeng has recruited &#34;Iron Lady&#34; Wang Fengying from Great Wall Motors to jointly reduce costs in both management and technology.
Taking the P7+ as an example, on one hand, the switch to a pure vision solution based on improved algorithm capabilities has led to cost reductions, while on the other hand, through joint procurement with Volkswagen and enhanced platform capabilities, the BOM cost of this vehicle has decreased by 25%.
He Xiaopeng stated, &#34;The BOM control of the P7+ is very good. The main selling price of leading models in the market is 195,800 yuan, and we are still 10,000 yuan cheaper than them under the same range and standard intelligent driving configuration.&#34;
However, Xiaopeng's overall finances still face some challenges. The low-priced model MONA M03 contributes 42% of sales but lowers the average price per vehicle to 188,500 yuan.
In addition, high research and development (R&amp;D) and sales expenses remain pain points, as these two areas are the most costly for Xiaopeng.
In 2024, Xiaopeng's R&amp;D expenses are expected to reach 6.46 billion yuan, with the fourth quarter alone reaching 2.01 billion yuan, primarily for new model development and AI technology. However, it is difficult to save on this expenditure, as Xiaopeng currently has multiple future-oriented businesses that require continuous investment.
Another major expense is sales costs, which tend to rise with increasing sales volume. For example, in the fourth quarter, sales and administrative expenses reached 2.28 billion yuan, an increase of over 50% year-on-year, used for channel expansion and brand marketing. For the entire year, sales and administrative expenses increased to 6.87 billion yuan, accounting for 16.8% of revenue. It is evident that as long as money is spent, this capability will improve. Last year, the outside world intuitively felt the changes in Xiaopeng's marketing and other areas.
From the perspective of cash reserves, Xiaopeng is currently relatively comfortable. He Xiaopeng stated that autonomous driving still needs to rely on self-generated funds. As of the end of 2024, cash reserves are 41.96 billion yuan.
Looking to the future, Xiaopeng has provided relatively optimistic expectations. In the first quarter of 2025, it is expected to deliver 91,000 to 93,000 vehicles, a year-on-year increase of over 300%, with an annual target of 380,000 vehicles, aiming to double its output.
<h2>Prolonged Battle</h2>
It is undeniable that Xiaopeng is currently in the best historical period, but it is also facing greater challenges. It needs to balance scale expansion with capacity constraints, cost-effectiveness with profit margins, and the need for long-term large-scale investment in multiple businesses with the goal of achieving breakeven in the short term.
In 2025, new models will be delivered intensively (such as G6/G9 facelifts and MONA M03 Max), requiring a rapid increase in production capacity in the short term. During the earnings call, He Xiaopeng repeatedly mentioned production capacity. He stated that Xiaopeng Motors plans to start delivering the new G6 on March 21 and is currently working with the supply chain to enhance production capacity.
Additionally, several of Xiaopeng's popular models have benefited from cost-effectiveness. Beyond cost-effectiveness, Xiaopeng also needs to continuously stimulate user enthusiasm. In the future, its product prices will span the range of 100,000 to 500,000 yuan, and the effectiveness of the cost-effectiveness route at higher price points still needs further validation.
In response to the current situation, Xiaopeng is undergoing a series of transformations. For example, it is placing greater emphasis on organizational efficiency, user insights, continuous technological improvement, and increasing overseas expansion.
At the beginning of this year, He Xiaopeng issued an internal letter to all employees, hoping to improve efficiency and reduce the inefficiencies that come with company growth.
Moreover, in the recently launched G6 and G9 facelift models, Xiaopeng has demonstrated stronger user insight capabilities than before, beginning to recognize user needs and deciding to &#34;listen to advice,&#34; rather than solely emphasizing its own technological strengths while neglecting user demands.
This capability upgrade will also be reflected in new vehicles each quarter in the future. During the earnings call, He Xiaopeng said, &#34;In the second half of this year, we also plan to deliver multiple new products, including pure electric and Kunpeng super electric products. The vast majority of our models will support dual energy for one vehicle, significantly expanding our reachable market scale through super electric products
In terms of technology, amidst the chaotic situation of universal intelligent driving, XPeng aims to be in the &#34;0th echelon.&#34; He Xiaopeng revealed at the spring press conference a few days ago that XPeng will continue to enhance its intelligent driving capabilities, with the recent launch of the park intelligent driving roaming function, which can select routes, engage in vehicle-human interactions, detour, and find exits based on the road conditions within the park, truly achieving L3-like capabilities.
Additionally, XPeng is currently the most aggressive among the new forces in going overseas. According to He Xiaopeng's plan, they aim to enter 60 countries by 2025 and establish over 300 overseas service outlets, with the goal of achieving over half of their sales from overseas by 2030.
He Xiaopeng stated that XPeng will have three growth curves in the future: globalization, AI + automotive, moving from China to the global market, humanoid robots, and deeper integration with the automotive industry.
Just like He Xiaopeng's cautious attitude, although it is not yet time for KTV, each small victory will become a piece of the puzzle for obtaining the final entry ticket

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- Xpeng Motors has shown significant improvement in 2024, with revenue reaching 40.87 billion yuan, a 33.2% increase, and a reduction in losses by 44%.  
- Despite this progress, challenges remain, including a high proportion of low-priced models and ongoing high R&D and sales expenses, which hinder profitability.  
- Looking ahead, Xpeng aims to double its sales in 2025 while balancing cost and technology investments, with plans to expand globally and enhance its autonomous driving capabilities.

XPeng plays the windfall card