Xpeng targets 60,000 monthly sales as G9L launch nears

Xpeng's 1H26 interim loss widened to RMB 3.12 billion, with the EV maker targeting monthly sales above 60,000 vehicles in Q4.

"The new models will drive a significant increase in sales in the fourth quarter," Chairman He Xiaopeng said during the earnings call on Monday.

Q2 revenue reached RMB 19.74 billion, up 8 percent year-on-year, while deliveries rose 64.8 percent sequentially to 103,295 vehicles. The company guided Q3 deliveries of 115,000 to 121,000 units, implying average monthly deliveries of about 38,487 to 41,487 units in August and September.

Shares fell 7.76 percent to HKD 43.98 on Tuesday, hitting a session low of HKD 43.34, as the market digested an EPS miss of -¥1.29 versus -¥0.29 estimated. Bernstein and Tiger Securities cut price targets to $18 and $15 respectively.

The G9L, a large five-seat flagship SUV, will launch and begin deliveries in China in September, with pre-sales starting at RMB 259,800. Available in battery electric and extended-range electric versions, the model offers a CLTC combined range of 1,602 kilometers in EREV form. The Mona L05 mid-size SUV will launch domestically in Q4, completing Xpeng's coverage across major SUV segments alongside the GX and Mona L03.

The company has begun double-shift production of the Mona L03 SUV and is working with suppliers to accelerate capacity ramp-up. New locked-in orders rose more than 50 percent sequentially in Q3, reaching a record high, though extreme weather and supply-chain issues slowed deliveries.

Overseas markets will also drive Q4 growth. Xpeng expects overseas deliveries of the Mona L03 to begin in Q4, helping lift quarterly overseas sales above 40,000 units. Overseas sales exceeded 20,000 units in Q2 for the first time, up 81 percent year-on-year, with export ASPs above EUR 40,000. The overseas business contributed more than 25 percent of revenue in the first half.

Vehicle margin compressed to 12.1 percent from 14.3 percent a year earlier, while consolidated gross margin improved to 20.7 percent, supported by services revenue that surged 93.9 percent to RMB 2.7 billion, including RMB 1.2 billion from Volkswagen technical R&D.

In assisted driving, Xpeng will begin rolling out the first major upgrade to its second-generation Vision-Language-Action model in late August. Version 6.3.0 will have 3.5 times as many parameters and 300 percent greater perception sensitivity. The company targets European regulatory approval in the first half of 2027.

The G9L will compete with Li Auto's Li L7 and the Huawei-backed Aito M7, forming Xpeng's dual-flagship lineup with the six-seat GX SUV.

The widened loss and compressed vehicle margins raise questions about when the core auto business will sustainably profit, even as the robotics spin-off at a $6.3 billion valuation and the Volkswagen revenue stream provide optionality. Investors will watch Q3 delivery data in October and the G9L launch next month to gauge whether the 60,000-unit monthly target is achievable.

This article is for informational purposes only and does not constitute investment advice.