Losses Narrow as Sales Surge,Xpeng Announces Q4 and Full-Year 2024 Financial Results

XPeng Delivers "Strongest Ever" Annual Report Amid Narrowing Losses and Strategic Shifts.

Following its "strongest ever" quarterly earnings in November 2024, XPeng has now released its "strongest ever" annual financial results for 2024.

2024 Financial Highlights

• Revenue: CNY 40.87 billion, a 33.2% year-on-year increase.

• Net loss: Reduced to CNY 5.79 billion from CNY 10.38 billion in 2023.

• Gross margin: Rose to 14.3%, up from 1.5% in 2023 and surpassing 2022’s 11.5%.

XPeng's financial report for 2024

At the earnings call, CEO He Xiaopeng struck a familiar tone of confidence: "I believe XPeng’s total sales in 2025 will more than double compared to 2024," adding that the company is "steadily progressing toward profitability in the fourth quarter."

However, challenges remain: Despite a CNY 6.01 billion sequential revenue surge in Q4 2024, losses narrowed only slightly from CNY 1.81 billion to CNY 1.33 billion. A 61% quarter-on-quarter spike in sales costs and lingering per-vehicle profitability issues underscore ongoing hurdles.

Investors at the March 18 call pressed for details on XPeng’s path to profitability, brand positioning, and strategies to tackle new competitors as it expands into broader market segments.

Turning the Tide?

XPeng’s gross margin has improved for six consecutive quarters, with free cash flow exceeding CNY 4 billion in the second half of 2024. He Xiaopeng hailed this as "clear validation of XPeng’s transformation in scaling capabilities, systemic efficiency, and strategic execution."

MONA M03

Public sentiment toward XPeng’s annual reports has shifted dramatically. While early 2024 was marked by skepticism, optimism now prevails, buoyed by 2024’s results:

• Net losses in 2024 (CNY 5.79 billion) fell significantly compared to 2023 (CNY 10.38 billion) and 2022 (CNY 9.14 billion).

• Gross margin rebounded to 14.3% in 2024 after plunging to 1.5% in 2023, with vehicle margin rising from -1.6% to 8.3%.

  
  

Drivers of Improvement

• Technology partnership with Volkswagen: Service and other revenues surged 89% to CNY 5.04 billion in 2024, bolstering margins.

• Expanded sales network: XPeng’s stores grew to 690 across 226 cities by end-2024 (up from 500 stores in 181 cities in 2023), with deeper penetration into lower-tier cities.

• R&D investment: Spending rose 22.4% to CNY 6.46 billion in 2024, driven by new model development.

The Next Strategic Move

After two volatile years of "rocky starts and dramatic recoveries," XPeng entered 2025 with steadier momentum, claiming the top spot in new energy vehicle deliveries for two consecutive months.

Xpeng G9

Product FocusXPeng is doubling down on differentiated positioning: "Over the next three years, we will refine our product lineup, emphasize uniqueness, and accelerate globalization." Recent launches like the M03, P7+, and 2025 G6/G9 boosted sales but entrenched its image as a "value-for-money" brand.

By 2026, XPeng plans to cover price segments from CNY 100,000 to 500,000, spanning compact to large vehicles. Its current flagship, the X9 SUV, tops out at CNY 419,800. Upcoming models like the G01 (EV/range-extender hybrid) and an X9 refresh may push higher, though breaking the CNY 500,000 ceiling appears unlikely.

Cost Control & Tech InnovationDespite soaring sales, profitability remains elusive. He Xiaopeng highlighted two key initiatives:

1. In-house Turing chip: Slated for mass production in 2025, it aims to reduce costs and enhance energy efficiency versus third-party chips.

2. Platform-based R&D: Integrating smart driving, powertrains, and electronics into modular platforms to boost scalability.

Yet challenges persist: Q4 sales costs rose 61% sequentially, while SG&A expenses climbed 39.3% due to higher dealer commissions.

Reaching the Shore

He Xiaopeng has long warned of an "elimination race" in China’s EV sector (2024–2027). At the call, he positioned XPeng as a global tech leader: "XPeng and Tesla are the only companies capable of delivering map-free, lidar-free autonomous driving across multiple models."

Xpeng P7+

However, XPeng’s edge in smart driving faces dilution as rivals catch up. Its upcoming premium models—new P7, G01, and X9 refresh—must balance innovation with consumer pricing expectations.

2025 Outlook

• Jan-Feb 2025 deliveries hit 60,803 units, a 375% YoY jump.

• He projects 2025 sales will "more than double" 2024’s total.

Yet questions linger: When will profitability materialize? Can XPeng maintain differentiation in a crowded market?

In November 2024, XPeng’s earnings report was titled "Swimming in a Blood-Red Ocean Until It Turns Blue." For now, the waters remain turbulent—the journey to calmer seas continues.