Earnings and Options Strategy | XPeng's Q4 2025 deliveries fall below previous guidance. Can a breakout model bring surprises to profit expectations?

$XPeng (XPEV.US)$ / $XPENG-W (09868.HK)$ is set to release its earnings report before the market opens on March 20 Eastern Time (after the Hong Kong market closes on March 20 Beijing Time). Institutional forecasts predict revenue of 22.002 billion yuan for Q4 2025, a year-on-year increase of 36.61%; expected earnings per share are 0.008 yuan, with hopes of turning losses into profits year-on-year.

Leveraging MONA M03 and P7+, XPeng Motors has shown strong performance in the highly competitive market, but actual deliveries for Q4 fell short of the lower end of guidance, while a drop in average selling price put pressure on revenue and profit expectations.

At this critical juncture of escalating price wars and full transition to AI, the Q1 2026 guidance, partnership income from Volkswagen, and progress in Robotaxi could be key factors in redefining its valuation. With the earnings report approaching, what options strategies are available for operation?

MONA and P7+ may drive Q4 revenue, but Q4 2025 deliveries were below guidance

In 2025, XPeng Motors aims to capture market share in the 150,000 to 200,000 yuan price range with MONA M03 and P7+. According to disclosed data, XPeng Motors' total annual deliveries reached 429,445 units, with 116,249 units delivered in Q4, failing to meet the lower limit of management's guidance of 125,000 to 132,000 units given during the Q3 earnings call.

The main sales models in Q4, MONA M03 and P7+, accounted for a large proportion, coupled with year-end promotions by carmakers. The popularity of value-for-money models drove down the average selling price, suppressing XPeng Motors' overall revenue scale.Based on automotive sales revenue divided by deliveries, the average selling price per vehicle for XPeng Motors in Q3 2025 was 155,600 yuan; compared to 189,100 yuan in Q3 2024. It remains questionable whether XPeng Motors can achieve its previously announced revenue guidance of 21.5 billion to 23 billion yuan for Q4.

Investors may focus on management’s remarks during the earnings call. Supply chain capacity bottlenecks could lead to order backlogs and delayed revenue recognition, while extreme competitive pressures in the terminal market suggest that XPeng Motors' pricing power in the fiercely competitive market is under challenge.

The narrowing losses continue; can the guidance for Q1 2026 exceed expectations?

The market anticipates XPeng Motors to achieve breakeven in the fourth quarter, but XPeng's Q4 deliveries remained roughly flat compared to Q3. The scale effect on the manufacturing side failed to be further unlocked, and the drop in average selling price directly squeezed XPeng Motors' profit margin on vehicle hardware.

Even assuming XPeng Motors remains loss-making in Q4, with its single-quarter profitability target being pushed back,XPeng Motors’ trend of narrowing annual losses for 2025 is still clear.Entering 2026, price wars in the new energy vehicle market are escalating. The Q1 2026 guidance provided by management in this earnings report has become particularly important, as outsiders also look forward to XPeng Motors confirming its internal target of reaching 550,000 to 600,000 units in annual sales volume by 2026.

Another key point not to be overlooked is that high-margin service revenue from Volkswagen’s EEA architecture licensing is a crucial line of defense supporting XPeng Motors' overall gross margin.XPeng Motors’ current valuation already partially reflects external optimism regarding autonomous driving technology and licensing partnerships with Volkswagen; overly conservative guidance for Q1 could trigger capital outflows.

AI and robotics R&D burn cash, but the roadmap acts as a valuation catalyst

Beyond its core automobile business, XPeng Motors is fully transitioning into a physical AI company. 2026 is considered a critical year for the commercialization of L4 autonomous driving. XPeng’s Robotaxi business plans to begin mass production and pilot operations in 2026, while preliminary production roadmaps have been unveiled for XPeng Huitian’s flying car and the humanoid robot IRON.

However, the combination of intelligent vehicles with AI and robotics R&D is an extremely cash-intensive endeavor. That said, XPeng had a robust reserve of cash and equivalents at the end of Q3 (RMB 48.33 billion), providing a safety net against industry price wars. Moving forward, attention should be paid to whether XPeng’s AI ecosystem strategy will evolve into a heavy financial burden that continuously consumes cash flow.

The management's disclosure of the commercialization timeline for Robotaxi during the earnings call, along with specific business progress in XPeng Motors’ AI technology converting into high-margin software subscription revenue, will act as a catalyst for XPeng’s valuation logic. Of course, the AI ecosystem business cannot contribute significant profits in the short term, and the long-term perspective determines the upper limit of XPeng Motors' market capitalization.

Pre-earnings technical analysis and options strategy

After a round of strong rebound in XPeng Motors' stock price, multiple short-term technical indicators have entered the 'overbought' or 'severely overbought' zones, indicating increased pressure for short-term adjustments. However, medium-term trend indicators (such as MA, MACD) have not completely turned negative yet, with the overall situation being in a phase of consolidation and searching for direction.

Specifically, medium-short term moving averages are providing recent support to the stock price, with the price standing above most medium-term moving averages such as the 20-day, 30-day, and 60-day lines, but still facing pressure from long-term moving averages. Recent technical data shows that the MACD histogram has started to contract after reaching its peak, suggesting that upward momentum is weakening; KDJ indicator analysis reveals that both the K-line and J-line have entered the 'severely overbought' region above 80.

In terms of options data, implied volatility (IV) is at a relatively high level for the year (Hong Kong shares: IV percentile 76%; US shares: IV percentile 75%), indicating expectations of significant future stock price fluctuations.

Xiaopeng US Stock IV

Xiaopeng Hong Kong Stock IV

Meanwhile, bullish options trading has been active recently, with a low Put/Call ratio for US shares, reflecting continued optimism in market sentiment, although the Put/Call ratio for Hong Kong shares is relatively high.

Xiaopeng US stock options open interest PC ratio

Hong Kong stock options open interest PC ratio

If you are optimistic about XPeng Motors releasing stronger positive Q4 earnings, you can adopt a spread strategy to go long despite the currently high implied volatility.

The profit and loss characteristics of this strategy at expiration can be referenced in the figure below (only showing the profit and loss of the options portion, excluding any gains or losses from previously held stock positions), for educational purposes only and not representing any investment advice:

If you believe that XPeng Motors may drop after its earnings release, investors holding XPeng shares could hedge by employing a covered call strategy — selling 1 call option for every 100 shares of US stock held, or 1 call for every 200 shares of Hong Kong stock held.

For investors looking to buy at a lower price following the earnings report, consider using a short put strategy to acquire shares at lower support levels, such as 60.5 Hong Kong dollars for Hong Kong stocks and 15.5 US dollars for US stocks.

If you want more inspiration on options strategies, you can easily access it through the mobile app or the new desktop version by following the path below!

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