Xpeng Motors, the Guangzhou-based electric vehicle manufacturer, is significantly boosting its market performance, with shares projected to rise nearly 80% this year. The company is expanding its model lineup and inching closer to profitability, which is attracting attention from investors. On Thursday, Xpeng’s stock surged over 10% in Hong Kong after the company reported encouraging earnings and a robust revenue forecast for the second quarter. Shares peaked at 85.5 Hong Kong dollars ($10.86) before settling at a 7% increase, marking a year-to-date gain of 78%.
As a major player in China’s fiercely competitive electric vehicle landscape, Xpeng has faced challenges in achieving profitability amid escalating competition and tepid domestic demand. However, its first-quarter earnings showed promising growth, with revenue more than doubling year-on-year, driven by strong sales. The company delivered 94,008 vehicles in the first quarter, exceeding last year’s figures by over four times. This uptick in revenue helped to narrow its net loss to 664 million yuan, a significant reduction from last year’s 1.37 billion yuan, while improving the gross margin to 15.6%, up from 12.9% a year earlier.
Analysts foresee Xpeng turning a profit in the fourth quarter, fueled by ongoing sales growth and a slate of new models. “We expect Xpeng to break even in Q4 2025 and anticipate a turnaround starting in Q1 2026,” analysts at UOB Kay Hian noted, highlighting a “strong product cycle” that will bolster sales momentum. They maintain a “buy” rating on the stock, projecting a target price of 150 Hong Kong dollars, which represents a potential upside of over 76% from its current valuation.
Looking ahead, Xpeng anticipates steady improvements in its gross margin, primarily driven by sales of higher-end models and greater economies of scale. Recently, the carmaker launched several new products, including the mass-market MONA brand and a refreshed flagship model, the X9, which boasts an advanced autonomous driving system. Plans are underway to start mass production of Level 3 autonomous vehicles in China by the end of the year, a significant advancement from the more widely used Level 2 systems.
For the second quarter, Xpeng forecasts revenue between 17.5 billion yuan and 18.7 billion yuan, surpassing consensus estimates of 17.2 billion yuan, according to LSEG data. The company aims to deliver up to 108,000 electric vehicles in the second quarter, more than double last year’s figures. Analysts from Nomura indicate that the launch and delivery of the new MONA M03 Max model, along with updates to existing models like the G7 and P7, will serve as crucial catalysts for driving Xpeng’s success. They have set a target price of $30 for the company’s U.S.-listed shares, which recently experienced a 13% increase to close at $22.25, contributing to an impressive year-to-date rally of over 88%. However, this is still well below its peak of over $72 reached in November 2020.
In comparison, rival BYD has also performed well, with shares climbing over 74% this year, while Li Auto saw a rise of more than 22%. In contrast, NIO has experienced a downturn, with stocks dropping over 11%. This competitive landscape will continue to be a major factor as Xpeng and its peers navigate the evolving electric vehicle market.
— CNBC’s Arjun Kharpal contributed to this story.
Original Source: https://www.cnbc.com/2025/05/22/xpeng-shares-soar-10percent-in-hong-kong-as-chinese-carmaker-forecasts-upbeat-revenue-.html
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Publish Date: 2025-05-22 11:16:00
