XPeng Motors is making waves in the automotive industry.

Driven by consistent delivery growth and performance improvements, XPeng Motors has witnessed a significant market resurgence. From its lowest point in this cycle, the company's (HK9868) stock surged by over 300%. As of the latest closing, XPeng Motors' Hong Kong stock market value stands at HK$168.95 billion, marking an increase of over HK$120 billion from its nadir, gradually closing the gap with NIO.

As the frontrunner in new energy vehicle deliveries this year, XPeng Motors has consistently maintained its top sales position among new energy automakers, thanks to its two popular models: the MONA M03 and P7+.

On March 18, XPeng Motors released its fourth-quarter and full-year 2024 financial report. The report highlighted that XPeng Motors achieved revenue of RMB 40.87 billion in 2024, a year-on-year increase of 33.2%. Net losses amounted to RMB 5.79 billion, marking a substantial narrowing compared to the same period last year, which stood at RMB 10.376 billion.

Specifically, for the fourth quarter, XPeng Motors reported total revenue of RMB 16.11 billion, representing a quarter-on-quarter increase of 59.4% and a year-on-year increase of 23.4%, setting a new record for single-quarter revenue. Its net loss was RMB 1.33 billion, a notable improvement from the same period last year. Notably, automotive sales revenue reached RMB 14.67 billion, a quarter-on-quarter increase of 66.8%, and the gross profit margin returned to double digits at 10%, a year-on-year increase of 5.9%.

Regarding the substantial increase in gross profit margin, XPeng Motors attributed this primarily to reduced vehicle costs.

Kanjian Finance believes that the cornerstone of XPeng Motors' improved full-year performance lies in the overall increase in deliveries. For the fourth quarter, XPeng Motors delivered a total of 91,507 vehicles, a year-on-year increase of 52.1%, setting a new record for single-quarter deliveries. For the full year 2024, XPeng Motors delivered 190,068 vehicles, a year-on-year increase of 34.2%.

It is evident that the fourth-quarter sales performance "rescued" XPeng Motors' full-year sales figures.

Furthermore, with the continuous increase in deliveries, XPeng's cash flow is also improving. According to the financial report, as of December 31, 2024, XPeng Motors' cash and cash equivalents, restricted cash, short-term investments, and term deposits totaled RMB 41.96 billion, a net increase of over RMB 6 billion quarter-on-quarter.

He Xiaopeng stated during the Q4 earnings call, "Entering 2025, we have been the delivery champion among new energy automakers for two consecutive months, solidifying our position as one of the most stable performing automakers. I firmly believe that stability paves the way for long-term success. This year, I will focus on further enhancing XPeng Motors' system capabilities, user product capabilities, AI and vehicle technology breadth, commercialization capabilities, and globalization efforts."

AI Driving "Breakthrough"

Moving away from its previous obsession with high-end positioning, XPeng is now prioritizing sales.

Recently, the 2025 models of XPeng G6 and G9 were launched. In terms of pricing, the G6's price range has been adjusted to between RMB 176,800 and RMB 198,800, while the G9's price range is now between RMB 248,800 and RMB 278,800.

As early as 2022, the XPeng G9 entered the luxury vehicle market with a price range of RMB 309,900 to RMB 469,900, but it faced scrutiny due to a "second launch" incident within 48 hours. Since then, XPeng Motors' sales experienced a significant decline, a situation that persisted for an extended period.

Pricing confusion and delivery issues that fell short of expectations posed considerable challenges for XPeng Motors, causing it to slip from the top sales position to the second tier. To change this status quo, He Xiaopeng was determined to make changes. Internally, he streamlined processes, simplified the management layer, and brought in Wang Fengying. Externally, the company continued to deepen its focus on AI driving and reduce product prices.

Wang Fengying's arrival has brought about some changes at XPeng. Firstly, the chaotic positioning has gradually become clearer, and secondly, the product pricing strategy has become more distinct. The robust sales of the MONA M03 and P7+ have successfully reversed XPeng Motors' decline and helped it reclaim the championship position.

When discussing the pricing process of the new XPeng G9, He Xiaopeng specifically mentioned Wang Fengying's name. Some believe that after joining XPeng Motors, Wang Fengying helped the new energy automaker establish a more mature organizational structure, channels, and supply chain management system, achieving cost reduction and efficiency improvement.

This year, the 2025 models of G6 and G9 have further expanded XPeng's growth potential. Notably, the 2025 models of XPeng G6 and G9 come standard with Turing AI Driving.

Turing AI Driving represents XPeng Motors' highest level of intelligent driving capability, featuring the comprehensive application of end-to-end large models. The product offers "parking spot to parking spot" capabilities, with a single software package covering campuses, cities, highways, and parking lots. According to XPeng Motors, in the future, Turing AI Driving will be the first to introduce a campus roaming function, requiring no learning, memory, or navigation.

Previously, at XPeng's Spring Conference, Chairman and CEO He Xiaopeng stated that standing at the dawn of a new decade, XPeng Motors' AI vehicle globalization process will further accelerate.

On the earnings call, He Xiaopeng said, "I believe that AI will drive tremendous changes in the automotive industry, accelerating the realization of L3-level autonomous driving and L4-level driverless driving. At the same time, I also foresee that smart vehicles are integrating with embodied intelligence, and smart vehicles are likely to be the precursors to humanoid robots. Future smart vehicles will undoubtedly be embodied smart vehicles."

He Xiaopeng added, "In the second half of this year, I am confident that XPeng Motors will be the first in China to realize the software capabilities and experience of L3-level intelligent driving."

He Xiaopeng also stated that in the future, XPeng Motors will continue to increase investment in the AI field, deepening research and development in core technologies such as AI algorithms and chips, particularly striving for breakthroughs in cutting-edge technologies like embodied intelligence and large models. It is reported that XPeng Motors has received 4,000 orders for flying cars. According to XPeng Motors, the company's humanoid robots and flying cars will both enter mass production in 2026.

It is noteworthy that XPeng Motors' R&D expenditure in 2024 was RMB 6.46 billion, a year-on-year increase of 22.4%. Additionally, XPeng Motors' service and other revenue in 2024 amounted to RMB 5.04 billion, a year-on-year increase of 89%. Regarding this, XPeng Motors explained that this was mainly due to the increase in revenue from technology research and development services related to the strategic cooperation with the Volkswagen Group on platforms and software, as well as electronic and electrical architecture technology.

Turning the Tide

At the previous Spring Conference, He Xiaopeng mentioned that XPeng Motors currently employs over 20,000 people and that the company's revenue this year will reach the RMB 50 billion to RMB 100 billion level. While this is no longer considered a small enterprise in other industries, for an automaker, it is still far from navigating through the critical period.

Being prepared for danger in times of safety has enabled He Xiaopeng to temporarily overcome difficulties and regain the top sales position among new energy automakers, riding the momentum of a dark horse. However, for XPeng Motors, the critical period has not yet fully passed.

In an internal letter at the beginning of 2025, He Xiaopeng admitted that XPeng Motors experienced its darkest moment in the first half of 2024.

Capacity issues were a key factor constraining XPeng Motors' development.

Therefore, since the second half of 2024, XPeng Motors has been vigorously addressing capacity issues. This includes measures such as increasing shifts to improve equipment utilization, introducing intelligent production lines to enhance automation rates, and deepening cooperation with suppliers to ensure the supply of core components, with multiple expansions undertaken.

At the Spring Conference, He Xiaopeng said, "At the end of last year, when we were drafting this year's budget, we didn't anticipate things to move so swiftly. We originally thought that sales of the XPeng G6 and G9 might not be that high, and we were somewhat conservative in our capacity preparations, so there might be a longer waiting period. We will gradually increase the production capacity of the G6 and G9 after May and June."

With the increase in deliveries and the introduction of new products, Kanjian Finance believes that XPeng Motors' situation will continue to improve in 2025. During the earnings conference, He Xiaopeng also stated that total sales in 2025 will achieve more than double the high growth rate of 2024. By the end of 2026, XPeng will have a more comprehensive product lineup spanning the price range of RMB 100,000 to RMB 500,000, covering mainstream market segments from compact to large vehicles.

Furthermore, He Xiaopeng revealed that with increased sales and improved automotive gross profit margins, XPeng Motors is expected to become profitable starting from the fourth quarter of this year.

Following the release of its financial report, Nomura Securities issued a research report stating that due to the potential for continuous business scale expansion, XPeng Motors may turn a profit in 2026. They noted that starting from the launch of XPeng's MONA M03 and P7+ models, supported by technological upgrades and cost-reduction efforts, the company has embarked on a robust business cycle. They added that with the launch of a series of new models and upcoming all-electric vehicle models in the second half of this year and 2026, the company is poised for strong growth and potentially increased market share. Therefore, Nomura Securities upgraded XPeng ADR's rating from Neutral to Buy and increased its target price from USD 14 to USD 30.

On March 19, XPeng Motors announced that the company conditionally granted a total of 28,506,800 restricted share units to Mr. He Xiaopeng, the company's Chairman, Executive Director, and Chief Executive Officer, as well as a major shareholder, under the company's 2025 Share Incentive Plan (subject to adoption). Based on the closing price on that day, the value of this equity incentive is RMB 2.53 billion.