XPeng's Q2 Earnings Exceed Expectations, Driven by Mona Brand and New EV Launches.

XPeng Inc. reported better-than-expected Q2 earnings due to growing demand for its low-cost Mona brand and new EV product launches. The company delivered 103,181 electric vehicles, a significant increase in sales. The momentum is expected to continue, leading to a rating upgrade.

XPeng Inc. (NYSE: XPEV) has reported better-than-expected earnings for its second quarter, driven by strong demand for its low-cost Mona brand and new electric vehicle (EV) product launches. The company delivered a significant 103,181 electric vehicles in the second quarter, marking a 242% year-over-year growth. This performance has led to a rating upgrade from analysts.

The company's vehicle margins also showed impressive progress, reaching 14.3% by the end of the second quarter, up 3.8 percentage points sequentially. This margin improvement is attributed to higher deliveries and growing production efficiencies, narrowing the gap with Li Auto Inc. (LI), which previously held the highest vehicle margins in the segment.

XPeng's revenue from vehicle sales for the second quarter was RMB 16.88 billion ($2.4 billion), representing a 147.6% year-over-year increase and a 17.5% quarter-on-quarter increase. The company's gross margin for the second quarter reached a record 17.3%, up from 14.0% in the same period of 2024 and 15.6% in the first quarter of 2025. This significant increase in gross margin is primarily due to ongoing cost reductions and optimization of the vehicle model product mix.

The company's net loss for the second quarter was RMB 480 million, a new low since the third quarter of 2020. This represents a 62.81% year-on-year decrease and a 28.05% quarter-on-quarter decrease. The adjusted net loss for the second quarter was RMB 390 million, compared to RMB 1.22 billion in the same period of 2024 and RMB 430 million in the first quarter of 2025.

XPeng's service and other revenue for the second quarter was RMB 1.39 billion, up 7.6% year-on-year but down 3.5% quarter-on-quarter. The company's research and development expenses for the second quarter were RMB 2.21 billion, up 50.4% year-on-year and up 11.4% quarter-on-quarter. Sales, general, and administrative expenses for the second quarter were RMB 2.17 billion, up 37.7% year-on-year and up 11.4% quarter-on-quarter.

The company's cash and cash equivalents, restricted cash, short-term investments, and time deposits totaled RMB 47.57 billion as of June 30, 2025, compared to RMB 41.96 billion as of December 31, 2024.

XPeng has guided third-quarter vehicle deliveries to be between 113,000 and 118,000 units, representing a year-on-year increase of about 142.8% to 153.6%. The company's strong momentum in the second quarter, driven by the Mona M03 model, is expected to continue, leading to a rating upgrade.

References:
[1] https://seekingalpha.com/article/4815783-xpeng-serious-margin-gains-rating-upgrade
[2] https://cnevpost.com/2025/08/19/xpeng-q2-2025-earnings/