Xpeng, the Chinese electric vehicle manufacturer, is positioning itself for a potential industry milestone, with President Brian Gu confidently projecting the company will reach break-even point towards the end of 2025. This ambitious goal could potentially make Xpeng the first Chinese automaker to achieve profitability primarily through pure electric vehicle sales.
In an interview, Gu described the current market environment as entering a “super cycle,” highlighting the company’s strategic initiatives to transform its financial trajectory. Unlike competitors BYD and Li Auto, which rely significantly on hybrid vehicle sales for profitability, Xpeng is committed to a pure electric vehicle approach.
The company’s optimism stems from multiple strategic developments. Xpeng has forecast fourth-quarter revenue exceeding Wall Street expectations, attributed to the introduction of new models Mona 03 and P7+. The momentum is expected to continue through the fourth quarter and into 2025, bolstered by supportive government policies including subsidies of up to USD 2,800 for trading in older vehicles for electric or more fuel-efficient alternatives.
Expansion plans are equally ambitious. Xpeng intends to launch four new models next year and intensify international market penetration, strategically avoiding North America where Chinese EVs face prohibitive 100% tariffs. While European markets present challenges with potential tariffs exceeding 20%, Gu remains open to exploring innovative market entry strategies.
Technological innovation represents another critical component of Xpeng’s growth strategy. The company has invested 3.5 billion yuan (approximately USD 483.07 million) in artificial intelligence development over the past four quarters, focusing on computing power and software advancement. Gu anticipates these investments will constitute a “large chunk” of future research and development expenditure.
Collaborative partnerships are emerging as a key differentiator for Xpeng. Technology services revenue nearly doubled in the third quarter, driven by a partnership with Volkswagen. The company is actively exploring opportunities to expand technological collaboration with the German automaker both within and outside China.
The artificial intelligence landscape is another area of strategic focus. Xpeng positions itself among Chinese developers of advanced assisted driving systems, developing proprietary large AI models comparable to Tesla’s Full-Self Driving technology, which is expected to launch in China during the first quarter of 2025.
Gu revealed ongoing discussions with “dozens” of automotive industry players regarding smart driving collaborations, signalling the company’s commitment to technological innovation and strategic partnerships.
The company’s approach reflects a broader transformation in the global automotive industry, where electric vehicle manufacturers are increasingly differentiating themselves through technological innovation, strategic partnerships, and aggressive market expansion strategies.
