XPeng Stock Tumbles Despite Strong Q3: Narrower Losses & Healthy Margins Ignored—What’s Spooking Investors?

XPeng’s Q3 earnings should’ve been a victory lap—narrower losses, margins holding firm. Instead, the stock got dumped. Here’s the brutal truth the bulls aren’t telling you.

The Numbers Game: Why ‘Less Bad’ Isn’t Good Enough

Markets wanted a knockout. They got a limp high-five. Cost cuts helped, but growth worries overshadow the progress.

EV Reality Check: Margins Can’t Outrun Macro Fears

Even solid execution hits a wall when China’s economy coughs. Battery costs dipped, but consumer demand? Still shaky.

Wall Street’s Verdict: ‘Show Me the Money’

Analysts nod at improvements—then slash targets anyway. Cash burn’s slowing, but profitability remains a 2026 fantasy at best.

Bottom line: XPeng’s fixing the engine mid-flight. Too bad traders only care about the altimeter screaming ‘pull up.’ (And no, ‘we’re less unprofitable’ doesn’t count as a growth strategy—ask any crypto bro.)

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XPeng’s Q3 Bottom Line Reflects Notable Improvement

XPeng’s Q3 revenue increased by 101.8% year-over-year to RMB 20.38 billion ($2.86 billion), driven by a 149.3% rise in its deliveries to 116,007 vehicles. Meanwhile, the company reported a non-GAAP net loss of RMB 0.16 per ADS (American Depositary Share), marking a solid improvement from the net loss of RMB 1.62 per ADS in the prior-year quarter. Analysts were expecting a loss of RMB 0.57 per ADS on revenue of RMB 20.63 billion.

The bottom line gained from a jump in Q3 2025 gross margin to 20.1%, up from 15.3% in the prior-year quarter. Interestingly, this marked the first time that the Chinese EV maker’s gross margin crossed the 20% mark. Also, XPeng’s vehicle margin expanded to 13.1% in Q3 2025 compared to 8.6% in the same quarter of the previous year, reflecting the company’s cost reduction efforts.

XPeng delivered solid Q3 earnings despite intense competition in the Chinese EV market, thanks to a strong product mix and advanced autonomous-driving tech. The company is also seeking growth beyond EVs, with investments in humanoid robots and robotaxis. CEO Xiaopeng said, “I firmly believe XPeng will evolve into a global embodied AI company.”

XPEV’s Guidance Fails to Impress

Looking ahead, XPeng expects Q4 deliveries in the range of 125,000 to 132,000 vehicles, indicating year-over-year growth of 36.6% to 44.3%.

Meanwhile, Q4 revenue is expected to be between RMB 21.5 billion and RMB 23.0 billion. The company’s Q4 2025 top-line guidance fell short of the consensus estimate of RMB 25.09 billion.

Is XPEV Stock a Good Buy?

Wall Street has a Moderate Buy consensus rating on XPeng stock based on eight Buys, two Holds, and one Sell recommendation. The average XPEV stock price target of $28.27 indicates 13% upside potential.

These ratings/price targets are expected to be revised as analysts react to Q3 results and the company’s fourth-quarter guidance.