Key Focus of New EV Makers’ Q3 Reports: Will Q4 Mark the Moment of Profitability for All?
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As new car-making forces are scheduled to successively announce their Q3 2025 financial reports in mid-November, the market’s attention is highly focused. According to Chasing Wind Trading Desk, the Morgan Stanley report released on November 6 suggests that the Q3 2025 performance of these new carmakers will generally meet market expectations, but the real focus lies on whether a turning point in operations can be achieved in the fourth quarter.
For investors, the following points are key to evaluating the value of each company:
Q3 Core Indicators: Vehicle gross margin and operating expense control are the two key indicators to measure the quality of Q3 performance.
Q4 Outlook: Compared to the established facts of Q3, the market is more concerned with each company’s guidance on delivery volume and profit margin for Q4, which will directly impact market sentiment and subsequent earnings forecasts.
Long-term Value Reassessment: Investors will closely scrutinize the 2026 new model plans and pricing strategies of each automaker to judge whether they can maintain competitiveness in potential cyclical headwinds. Meanwhile, non-vehicle businesses, especially AI-related hardware/software segments, will play an increasingly important role in company valuations.
Preview of Q3 Performance for the Big Three: NIO’s losses are expected to narrow; Li Auto is expected to remain profitable but with a QoQ profit decline; XPeng’s losses are expected to be roughly in line with Q2.
XPeng: Steady Growth in Deliveries, Losses Remain Flat
XPeng’s Q3 performance was basically in line with company guidance, and operations remained stable.
Deliveries and Revenue: Q3 deliveries were 116,000 units, a 12% increase YoY, falling within the guidance range of 113,000–118,000 units. Revenue is expected to reach RMB 20.4 billion, also within the guidance of RMB 19.6–21.0 billion, indicating the average selling price (ASP) remained stable QoQ.
Profit Margin Analysis: Vehicle gross margin is expected to rise slightly by 0.2 percentage points from 14.3% in Q2 to 14.5%, as scale effects offset the slower ramp-up of the G7 model and the impact from the Mona 03 model (accounting for 39%). Group overall gross margin is expected at 17.2%, roughly the same as Q2’s 17.3%.
Profitability: Q3 net loss under US GAAP is expected to be around RMB 500 million, which is about the same as the RMB 478 million loss in Q2.
Q4 Outlook: The report forecasts that, thanks to the ramp-up of the new P7 and the contribution from the X9 extended-range version, XPeng’s Q4 deliveries are expected to rise 12%–16% QoQ to 130,000–135,000 units.
Li Auto: Profitable but Profit Down, Focus on New Model Orders
Li Auto remained profitable in Q3, but several key profit indicators declined QoQ, showing some operational pressure.
Deliveries and Revenue: Q3 deliveries were 93,000 units, within the guidance of 90,000–95,000 units. But revenue is expected at RMB 25.7 billion, down 15% QoQ, mainly due to changes in the MEGA model sales mix and increased discounts.
Profit Margin Analysis: Vehicle gross margin is expected at 19.4%, flat with Q2. Company overall gross margin is 21%, with total gross profit around RMB 5.4 billion.
Profitability: As the launch of i8 and i6 models led R&D and sales management expenses to rise 10% and 5% QoQ, the report expects Li Auto to record an operating loss of RMB 200 million in Q3, compared to an operating profit of RMB 800 million in Q2. Net profit is expected at RMB 300 million, but per-vehicle profit dropped sharply from RMB 9,900 in Q2 to RMB 2,900.
Q4 Outlook: Given weak October sales data, the report predicts Li Auto’s Q4 delivery guidance may be in the range of 105,000–110,000 units, up 13%–18% QoQ. Investors will closely watch for inventory accumulation of the i8 and i6 models.
NIO (NIO.N): Losses Narrow Sharply, Q4 Deliveries Poised for Explosive Growth
NIO demonstrated good cost control in Q3, with losses narrowing sharply QoQ, and the market has high expectations for its Q4 delivery growth.
Deliveries and Revenue: Q3 deliveries were 87,000 units, up 21% QoQ, but at the lower end of the company’s guidance range of 87,000–91,000 units. Revenue is expected at RMB 21.9 billion, in line with its guidance of RMB 21.8–22.9 billion.
Profit Margin Analysis: Vehicle gross margin is expected to reach 12.5%, a QoQ rise of 2.2 percentage points. Assuming non-vehicle businesses break even, group overall gross margin is expected to be 10.9%.
Profitability: Initial results of organizational restructuring are apparent, with Q3 operating expenses expected to drop from RMB 7.0 billion to RMB 6.7 billion QoQ. Net loss is expected to narrow from RMB 5.0 billion in Q2 to about RMB 4.3 billion.
Q4 Outlook: The report gives a very optimistic forecast. Thanks to the incremental contribution of the sub-brand Ledo L90 and the new ES8, NIO’s Q4 deliveries may soar 72% QoQ to 150,000 units. This will be the key season to validate the company's new car strategy and multi-brand strategy.
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The above content is from Chasing Wind Trading Desk.
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