XPeng, Inc. (NYSE: XPEV) is engaged as a Chinese smart electric vehicle company, which is focused on the designing, developing, manufacturing and marketing smart EVs and related infrastructure to consumers. The Chinese EV company currently has two main models: the P7 smart sports sedan and the P5 smart family sedan.

Shares of the Chinese EV company are surging 43% through late trading on Wednesday, November 30, 2022. Over the past three months, XPeng has seen average daily volume of 28.52 million shares. However, volume of 142.46 million shares or dollar volume of around $1.51 billion, has already exchanged hands through late trading.

XPeng shares are rallying after the company reported third quarter 2022 financial results, which saw total revenues grow 19.3% year-over-year to RMB6.82 billion (US $960 million). The Chinese EV company delivered a total of 29,570 P7 & P5 vehicles during the quarter, which was an increase of 15% compared to the same period last year.

Gross margins did improve from quarter-over-quarter from 10.1% to 13.5%, but were still lower compared to 14.4% for the same period in 2021. Overall, XPeng reported a net loss of RMB2.38 billion (US $330 million) during the third quarter of 2022, which compares to a net loss of RMB1.59 billion for Q3 2021.

On a positive note, XPeng continued to expand its sales network during the quarter to a new total of 407 stores across 143 cities, as of September 30, 2022. Furthermore, the Chinese EV company continued to expand its charging station network to a total of 1,011 locations, which includes 806 XPENG self-operated supercharging stations and 205 destination charging stations.

However, XPeng is working through some serious headwinds. The company says higher costs and China’s COVID situation continue to weigh on overall results. Vice Chairman and President of XPeng, Dr. Hongdi Brian Gu, said the company would be implementing cost control measures and continue to improve operational efficiency.

On an outlook basis provided by the company, the higher costs and COVID challenges are likely to cause a deep decline in EV deliveries during the fourth quarter of 2022. Overall, management estimates total vehicle deliveries to be between 20,000 and 21,000, which would represent a year-over-year decline between 49.7% and 52.1%.

Q4 2022 revenue guidance also reflects an expected slowdown. Total revenue for the last quarter of 2022 is estimated to be between RMB4.8 billion and RMB5.1 billion. On a year-over-year basis, this represents a decline between 40.4% and 43.9%.

“Our management team has recently conducted an in-depth review of our growth strategy, products and operation. We have already carried out organization restructuring and changed some of our strategies. I am confident that our industry-leading smart and electrification technologies will allow us to build competitive products appealing to a broad customer base,” said Mr. He Xiaopeng, Chairman and CEO of XPENG. “I also would like to thank our shareholders for their valuable suggestions to us.”

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