A surge of 101%! XPeng with 160 billion is about to turn losses into profits across the board

The ranking of new car-making forces has changed again.

XPeng surpassed Nio and Li Auto to become the company with the largest market capitalization among new car-making forces. The change in corporate market value reflects the capital market's attitude towards companies. In the current highly competitive environment, short-term leadership is no longer a panacea.

From the perspective of global automotive manufacturing history, a century-old industry is a standard goal.

After the penetration rate of the new energy vehicle market exceeded 50%, the factors considered by the market for new energy vehicle companies have also undergone significant changes. On the basis of product safety, the consideration of profitability has begun to take precedence over delivery data. The market's requirements for companies' self-sustaining capabilities are being raised to a new level.

Those who can continuously maintain the competitive advantage of their products and continuously create value for users will be recognized by the market.

As the first profitable company among new car-making forces, Li Auto once found its position in family cars by taking a different approach. However, in the face of indiscriminate competition in the market, this advantage has not been maintained. Therefore, after entering 2025, Li Auto's performance in the capital market has not been good.

But overall, compared to other new car-making forces, Li Auto's competitive advantage is still obvious. What surprised the market was XPeng's emergence.

As is well known, XPeng is the company that follows Tesla the most and is also the new car-making force with the strongest sense of technology. XPeng's product strength was once fully recognized by the market, and its sales were the first among new car-making forces. However, with XPeng's development, internal management chaos and ambiguous product pricing caused XPeng to gradually fall behind.

The severe decline in sales and continuous losses made He Xiaopeng realize the seriousness of the problem, so he brought in Wang Fengying on the basis of adjusting the company's structure. With the joint efforts of Wang Fengying and He Xiaopeng, XPeng Motors straightened out the company's product line, refocused on itself, and finally emerged from the sales crisis.

Statistics show that from January to October 2025, XPeng Motors' cumulative deliveries reached 355,209 units, a year-on-year increase of 190%. Against the backdrop of the recovery in sales, XPeng Motors' stock price performance has also been quite impressive. Data shows that XPeng Motors' Hong Kong stock has risen by more than 83% this year, and its U.S. stock has risen by 79%.

According to the latest "2025 Hurun Rich List" released by the Hurun Research Institute, He Xiaopeng, chairman and CEO of XPeng Motors, ranked 114th with a net worth of 48 billion yuan.

After Extremes, Comes Good Fortune

The recovery in sales has finally brought XPeng Motors out of the crisis.

With the support of Robotaxi, humanoid robots, and flying cars, XPeng has begun to shed its inherent label of "car company" and began to catch up with Tesla. In particular, the recent good market performance of XPeng's humanoid robots has won high recognition and affirmation from the market.

Against this background, XPeng's valuation has also been restructured. Despite being in a loss-making state, its market value has exceeded that of Li Auto.

Of course, with the explosion in sales, XPeng Motors' profitability schedule may be advanced.

On November 17, XPeng Motors released its third-quarter 2025 financial report. The financial data clearly reflects the changes in the company's fundamentals.

The financial report shows that XPeng Motors' revenue in the third quarter was 20.38 billion yuan, a year-on-year increase of 101.8%, compared with market expectations of 20.45 billion yuan. The net loss was 380 million yuan, a significant reduction in losses year-on-year.

At the earnings conference call, XPeng Motors said it will achieve breakeven in the fourth quarter of this year.

Specifically, in the third quarter, XPeng's deliveries reached 116,007 units, setting a record for the best quarterly performance in the company's history. Thanks to the surge in delivery data, XPeng Motors' automotive business revenue in the third quarter was 18.05 billion yuan, a year-on-year increase of 105.3% and a quarter-on-quarter increase of 6.9%. In addition, non-automotive businesses also showed a trend of explosive growth. The financial report shows that XPeng Motors' service and other income in the third quarter reached 2.33 billion yuan, a year-on-year increase of 78.1% and a quarter-on-quarter increase of 67.3%.

It is worth noting that this financial report also has a very prominent highlight, namely the significant improvement in gross margin.

According to the financial report, XPeng Motors' gross margin in the third quarter reached an astonishing 20.1%, an increase of nearly 5 percentage points year-on-year, exceeding that of Tesla and BYD in the same period.

At the financial report meeting, He Xiaopeng said that in September this year, XPeng's monthly sales exceeded 5,000 units for the first time, a year-on-year increase of 79%. From January to September, XPeng Motors' cumulative overseas deliveries exceeded 29,000 units, a year-on-year increase of 125%.

Facing the explosion in performance, He Xiaopeng said that XPeng Motors' sales scale and market share are in the early stage of rapid expansion, and the goals of Robotaxi and humanoid robots for mass production are accelerating.

He Xiaopeng also said that XPeng Motors will become a global embodied intelligence company and will build a strong product technology system and business ecosystem around physical AI applications to create greater value for global customers and shareholders.

Gu Hongdi, vice chairman and co-president of XPeng Motors, said: "The continuous improvement in the company's operations has made us more determined to invest in physical AI R&D. At the same time, we look forward to working with more global business and technology partners to expand the ecosystem of physical AI applications and form a virtuous cycle of mutual promotion between technology R&D and commercialization."

The Vast Future

The penetration rate exceeding 50% means that the elimination race in the new energy vehicle market has entered an accelerated phase.

Against this background, the fault tolerance rate of new energy vehicle companies will be greatly reduced, and rapid profitability and maintaining stable sales will become the core of companies.

Facing the complex competitive environment, the core focus of how to ensure the competitive advantage of companies can only be the company's products. The advantages and disadvantages of automakers' core models will be magnified together, and whether the core models can break through will most likely determine the fate of the company. Of course, in order to avoid automakers from being overly involved in the industry's involution, some automakers have chosen to open up a second growth path.

For example, XPeng Motors, in addition to new energy vehicles, has also bet on robots and flying cars. He Xiaopeng said that the long-term market potential of robots will surpass that of cars.

He Xiaopeng also said that once a certain generation of robots crosses the inflection point of electrification like China's EV industry, it will usher in explosive growth. With the accumulation in intelligence and manufacturing systems, some automakers are expected to become important participants in the robot industry. Compared with cars, robot production capacity is easier to achieve, and the future industrialization process may be faster.

At the financial report meeting, He Xiaopeng believes that the final cost of robots will be close to that of cars, so the future sales price will also be comparable to that of cars. He pointed out that the proportion of software costs in cars is usually 10% to 20%, while the proportion of software in robots may reach 50% from the beginning.

Based on the above considerations, He Xiaopeng said that XPeng will launch robots for different fields and a small number of SKUs in the future, rather than having many models like cars.

After the release of its financial report, Bank of Communications International released a research report saying that XPeng Motors is one of the clearest targets for profitability among new car-making forces.

The bank said that with the replacement of new cars, the mass production of the dual-energy platform for one car, and the full popularization of intelligent driving functions, sales are expected to maintain high growth, and profitability in the fourth quarter of 2025 is achievable. The improvement elasticity of ASP and gross margin in 2025-2026 will be better than that of peers. At the same time, the company continues to lay out in AI chips, autonomous driving, low-altitude economy, RoboTaxi, and humanoid robots, improving the valuation center and long-term growth. Therefore, it maintains XPeng Motors' target price of HK$134.69 and maintains its "buy" rating.

Ping An Securities released a research report saying that the launch of XPeng Motors' extended-range models is expected to open up new growth space. Relying on AI capabilities and mass production capabilities, XPeng will enter a broader space such as embodied intelligence and is expected to derive new business models. Therefore, it maintains the company's "recommended" rating.

Kan Jian Finance believes that with the explosion of XPeng Motors' sales in 2025, the company's broad prospects have been completely opened. Moreover, as the industry enters an accelerated elimination phase, XPeng's current advantages may be further amplified. Coupled with XPeng Motors' performance in the intelligent robot and flying car markets, the company has now moved away from its positioning as a pure new energy vehicle company, and the valuation method given to XPeng by the capital market has also been restructured.

Overall, XPeng Motors has completely emerged from the crisis. From the current model, this company is also the closest to Tesla. Therefore, from this perspective, we believe that XPeng is highly likely to achieve a comprehensive turnaround in the fourth quarter. By 2026, the gap between XPeng and other new forces will further widen.$XPENG-W(09868.HK)