$XPeng Inc.(XPEV)$ 3Q25 Preview: Adjusting Estimates Ahead of Earnings
Tiger Research team maintains a BUY rating and $28 price target on XPeng as they fine-tune forecasts ahead of 3Q earnings.
Below are the key highlights from their updated outlook.
While XPeng’s 3Q vehicle deliveries are trimmed slightly (–1% to ~116K units) to align with recent disclosures, the team cuts the average selling price (ASP) by 4% due to a heavier mix of lower-priced models and promotional activity. As a result, 3Q vehicle sales are reduced by 5%, and vehicle gross margin is revised down 70bps to 14.3%.
However, momentum is expected to recover in 4Q, supported by stronger-than-expected demand for MONA M03 and P7i. The team lifts 4Q delivery estimates by 4% and now expects XPeng to approach break-even by year-end—a key milestone for investor confidence.
The FY25 revenue forecast is lowered by 1% to RMB 78.7B, reflecting slightly weaker pricing, but delivery growth remains robust at +138% YoY. Despite near-term margin pressure, XPeng’s operational efficiency continues to improve as scale expands.
Valuation remains unchanged at 1.6× ’26E sales, still a steep discount to Tesla’s 14.5× multiple—partly reflecting XPeng’s earlier stage of development and broader geopolitical risks facing U.S.-listed Chinese EV makers.
Bottom Line:
XPeng’s mix shift is temporarily weighing on profitability, but volume recovery and cost discipline keep its Q4 break-even story intact. The stock remains one of the more credible growth plays among China’s next-gen EV manufacturers.
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