XPEVCAUTIOUS

Gross Margin

20.6%

Higher than 26% of Consumer Cyclical sector peers

Updated 145h ago

Sector Performance

26th percentile

XPEV

20.6%

Sector Median

36.3%

Sector Avg

30.6%

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Deep Analysis

XPeng’s gross margin of 20.6% means that after deducting the direct costs of making its vehicles, the company keeps 20.6 cents of every dollar of revenue as gross profit, which helps cover other expenses and generate net income.

This figure falls well below the sector median of 36.3% for Consumer Cyclical companies, placing XPeng in the 26th percentile among its peers — indicating weaker pricing power or higher production costs relative to competitors. Trend data is limited, with no year-over-year comparison available; however, the quarter-over-quarter decline of 3.3 percentage points (from 21.3% to 20.6%) suggests recent compression in profitability. The combination of a low margin level and a deteriorating quarterly trend signals elevated risk, as the company is already operating with thinner gross profits and that cushion is shrinking, reducing its ability to absorb cost increases or invest in growth. This metric contradicts the overall NEUTRAL verdict because a declining gross margin below the sector norm typically points to operating headwinds that warrant a more cautious stance rather than a neutral one.

Frequently Asked Questions

What does the Gross Margin tell investors about XPEV?

Gross margin reveals pricing power and cost structure. Software companies often sustain 70–80%; manufacturers typically 30–50%. Expansion is a bullish signal.

How is the Gross Margin calculated?

Gross Margin is calculated as: Gross Profit / Revenue.

How does XPEV's Gross Margin compare to its sector?

XPEV's Gross Margin of 20.6% compares to a Consumer Cyclical sector median of 36.3%, placing it in the 26th percentile.

Who are XPEV's closest peers by Gross Margin?

The closest Consumer Cyclical peers by Gross Margin include: BABA (34.5%), ROST (29.6%), BBY (23.5%), BROS (23.1%), BWA (19.2%).

The Formula

Gross Profit / Revenue

Why It Matters

Gross margin reveals pricing power and cost structure. Software companies often sustain 70–80%; manufacturers typically 30–50%. Expansion is a bullish signal.