XPeng Sells Carbon Credits to Porsche While Its Stock Sits 54% Lower

XPeng signed emissions-credit deals with Porsche and other automakers across the EU, UK and Australia, expected to bring in over 1 billion CNY.

XPeng has found an unlikely revenue stream in Europe's climate regulations. The Chinese electric-vehicle maker signed agreements on Tuesday to trade emissions certificates with several international automakers, Porsche among them, according to media reports. The contracts span the European Union, the United Kingdom and Australia, and are expected to generate cumulative proceeds above 1 billion CNY — roughly 149 million USD.

The arrangement captures an odd reversal in the global auto industry. European manufacturers facing strict CO2 fleet targets in Brussels and London are increasingly turning to Chinese help to keep their balance sheets clean. Sluggish sales of their own electric models have left them short of compliance, forcing them to buy pollution rights on the open market. That money now flows to a Chinese challenger, a business reality that would have seemed implausible only a few years ago.

For XPeng, the deal is close to pure profit. Selling surplus emissions allowances requires no factory capacity and no marketing spend, so the proceeds land with an exceptionally high margin. The cash arrives at a useful moment, as the company's overseas expansion consumes substantial sums.

Deliveries Climb, but the Tape Tells Another Story

Operationally, XPeng has plenty to point to. The company reported 41,256 vehicles handed over in September, a solid monthly gain, bringing third-quarter deliveries to 118,390 units — up 15% from the prior quarter.

The stock, however, is not playing along. In German trading the share fell 2.7% to EUR 8.18, while media reports put the decline in Hong Kong at 4%. The pressure stems from the broader backdrop rather than anything company-specific: rising US Treasury yields, firmer oil prices and lingering disappointment over China's recent stimulus measures triggered a wide selloff in Hong Kong that swept up the automaker. When risk aversion takes hold, investors tend to unload growth and technology names first.

The scale of the disconnect is stark. Year to date, the stock has lost 54%, trading near EUR 8.34 and demanding hard evidence of a durable turn in profitability before sentiment can shift.

Software as a Second Engine

XPeng is hedging its bets more aggressively than most peers. Reuters reported on September 17 that the company plans to offer its technology to foreign automakers beyond Volkswagen, opening new revenue channels. The existing VW partnership offers a template: about a week ago, the German giant opened pre-orders for the jointly developed ID. UNYX 09, naming XPeng officially as development partner and relying on its VLA intelligent driver-assistance system.

Licensing software and assistance systems looks like a smart lever. It reduces dependence on thin vehicle-sales margins and builds recurring income streams across the international auto sector.

Paris, Malaysia and a Fresh Operating System

The international push continues on several fronts. After launching the flagship G9L SUV in China on September 17, XPeng will stage the model's world premiere at the Paris Motor Show on October 12, the same day European order books open and local pricing is announced. Demonstrations of the NGP intelligent driving system are planned at the show's Autonomous Lab.

In Asia, the company aims to add ten new locations in Malaysia by the end of 2026. On the software side, it began rolling out the XOS 6.3.0 operating system, built on the VLA 2.0 model, in China on September 22.

None of this has yet registered in the share price. What the market wants is proof that overseas volumes can scale — and until that arrives, the gap between XPeng's operational momentum and its beaten-down valuation is likely to persist.