$XPeng(XPEV.US) Quick read: In one sentence, the performance is quite good. The most critical information - the company's gross margin increased from 14% in the second quarter to 15.3%, while the market originally thought that the delivery of the cheap new car M03 would hardly boost the gross margin of the automotive business.

The key to this unexpected result lies in the gross margin exceeding market expectations, broken down by business:

1) Automotive business: Although the proportion of the low-priced, low-margin Mona M03 has increased, the cost reduction this quarter has been greater. On one hand, the impairment impact from the P5 (which was discontinued in the second quarter) dragged down the automotive gross margin by about 3.2 percentage points in the second quarter, but the impairment impact is expected to be minimal in the third quarter. On the other hand, it is anticipated that the increase in the proportion of overseas models this quarter has contributed to this. As a result, although the M03 did drag down the average selling price to less than 190,000, the automotive gross margin increased by 8.6%, showing a decent rebound.

2) Other businesses: This quarter, in addition to the technology licensing fees collected based on the G9 platform, the technology licensing fees based on the EEA technology architecture also began to be recognized in the third quarter, and the gross margin from technology research and development services is higher, leading to the gross margin exceeding expectations.

For next quarter's guidance, since the weekly sales are known, the quarterly sales guidance of up to 91,000 is basically reasonable. Overall, the improvement in automotive gross margin is the real positive aspect this time.