XPENG (NYSE:XPEV) said it expects a sharp rebound in second-quarter deliveries after a weaker first quarter, while management outlined a broader push to position the company around “physical AI” applications including advanced driver assistance, Robotaxis and humanoid robots.
Co-founder, Chairman and CEO He Xiaopeng said on the company’s first-quarter 2026 earnings call that XPeng formally changed its official Chinese name from XPeng Motors to XPeng Group, reflecting what he described as a transformation “from a smart EV company to a physical AI company.” He said the company’s smart EV business is expected to remain the foundation for growth, profitability and cash flow, while new AI-driven businesses could become additional revenue sources.
First-quarter revenue declines as deliveries fall
XPeng delivered 62,682 vehicles in the first quarter. James Wu, vice president of finance and accounting, said total revenue was RMB 13.03 billion, down 17.6% year over year and 21.4% from the prior quarter. Vehicle sales revenue was RMB 11 billion, down 23.5% year over year and 42.3% sequentially, which Wu attributed mainly to lower vehicle deliveries.
Revenue from services and others totaled RMB 2.03 billion, up 41.2% year over year but down 36.1% from the fourth quarter. Wu said the annual increase was driven primarily by higher revenue from technical research and development services and parts and accessory sales. The sequential decline reflected reduced technical R&D services revenue after a milestone catch-up in the prior quarter, as well as no carbon credit trading revenue in the latest period.
Gross margin was 20.6%, compared with 15.6% a year earlier and 21.3% in the fourth quarter of 2025. Vehicle margin was 12.1%, up from 10.5% a year earlier but down from 13% in the prior quarter. Wu said the year-over-year improvement reflected cost reductions and better product mix, while the sequential decline was due to higher unit vehicle costs tied to increased memory chip and battery-related costs.
Research and development expenses rose 46.8% year over year to RMB 2.91 billion, driven by new vehicle model development and AI-related technologies. Selling, general and administrative expenses fell 3.2% year over year to RMB 1.88 billion, which Wu attributed mainly to lower commissions to franchise stores.
XPeng reported a loss from operations of RMB 1.87 billion and a net loss of RMB 1.78 billion for the quarter. The company ended March with RMB 42.09 billion in cash.
Company guides for more than 100,000 deliveries in second quarter
Management forecast second-quarter deliveries of 100,000 to 106,000 vehicles, representing quarter-over-quarter growth of 59.5% to 69.1%. Revenue is expected to range from RMB 19.6 billion to RMB 20.8 billion, up 50.4% to 59.6% sequentially.
He said XPeng has moved beyond what he called a seasonal trough and is entering a period of stronger growth supported by four new models, higher production capacity and international expansion. He said the company plans to launch and begin deliveries of four all-new SUV models within six months, starting with the GX. Those vehicles were designed as global models from the beginning, he said.
Asked about second-quarter margins, Wu said total gross margin is expected to be around the same level as the first quarter. He noted that cost pressure from memory chips and battery raw materials is expected to continue, but said the GX should help product mix because its gross profit is “among the highest” in XPeng’s portfolio.
GX launch and MONA updates highlight vehicle pipeline
He said XPeng launched the 2026 MONA M03 in April, including a Max version powered by the company’s Turing AI system-on-chip and an Ultra SE version supporting VLA 2.0. He said more than 85% of MONA M03 customers selected the Max or Ultra SE versions, and said the model has remained China’s top-selling A-class pure electric sedan for 19 consecutive months.
The company launched the GX on May 20, describing it as a flagship model built for the L4 era and China’s first pre-installed mass-produced Robotaxi model with full hardware redundancy. He said the Ultra flagship trim priced above RMB 350,000 accounted for more than 80% of initial firm orders.
In response to a question from Morgan Stanley analyst Tim Hsiao, He said GX sales have exceeded expectations. He said the lead time for the battery-electric flagship version has surpassed 30 weeks and that the Max version accounted for less than 5% of the mix, below expectations. He added that the extended-range version initially lagged the battery-electric version in popularity but is approaching the same level, particularly after expanded promotion in western and northern China.
He said XPeng is prioritizing both scale and operating quality, including supply chain stability and long-term sales performance. He added that most GX configurations are generating gross margins above the company’s expectations, though one SKU was below expectations.
International sales and localized production expand
He said XPeng’s international deliveries exceeded 6,000 units in April for the first time, helped by the overseas delivery launch of the P7+. Beginning in the second quarter, international revenue is expected to exceed 20% of total revenue, he said. XPeng is targeting sustained monthly overseas deliveries of more than 10,000 units in the fourth quarter and aims to more than double full-year overseas deliveries.
Brian Gu, vice chairman and president, said international sales represented close to 20% of recent monthly volume, up from roughly 10% of global volume last year. He said international vehicle sales generate “significantly better” gross profit and net profit contribution, despite tariffs and cost increases.
Gu said XPeng currently has localized production in Indonesia and Malaysia for Southeast Asian demand, along with a partnership with Magna International in Austria to manufacture vehicles for Europe. He said the majority of European sales are expected to have local manufacturing at that production site, while markets without manufacturing facilities will continue under the current business model.
Robotaxi and humanoid robot plans move forward
He said ADAS mileage penetration on VLA 2.0-equipped XPeng vehicles surpassed 50% in April, and said a new VLA release planned for the third quarter is expected to improve model performance. He said VLA 2.0 is being tested in Europe, where XPeng hopes to receive regulatory approvals in multiple countries next year.
XPeng’s fully redundant GX fleet is undergoing L4 public-road testing in Guangzhou, and He said the company aims to launch pilot passenger Robotaxi operations there in the third quarter. He said recent regulatory tightening in China has not negatively affected XPeng’s development schedule. Management said XPeng does not plan to operate Robotaxi fleets directly, but instead expects to work with domestic and international operating partners and earn commissions.
On humanoid robots, He said XPeng’s mass-production robot, IRON, is nearing a software-hardware integration stage and is targeted for mass production by year-end. Initial trial deployment is planned for XPeng showrooms, followed by commercial customer deliveries in China and overseas next year.
He said the first applications could include showroom roles such as tour guide or assisted shopper, with future potential in retail and other commercial settings. He said humanoid robot hardware gross margins could be superior to vehicle margins, and that software licensing or cloud-related revenue may offer additional commercial potential.
Charles Zhang, vice president, said XPeng continues to expect 2026 revenue from technology, services and intellectual property licensing to be comparable to 2025. He said the company will begin scaled delivery of its Turing SoC to partner Volkswagen starting in the second quarter and remains open to additional technology commercialization opportunities.
About XPENG (NYSE:XPEV)
XPENG Inc (NYSE: XPEV) is a China-based developer and manufacturer of smart electric vehicles. The company designs, engineers and sells battery-electric sedans and sport-utility vehicles along with related software and services. Founded in 2014, XPENG positions itself as a technology-driven automaker with a focus on vehicle connectivity, software-defined features and advanced driver assistance systems.
Product offerings center on passenger EVs spanning compact crossovers and midsize sedans, supported by in-house software platforms and over-the-air update capabilities.
