Xpeng Motors Reports First Quarter with Revenue Exceeding RMB 20 Billion as Recovery Takes Shape
Xpeng Motors posted quarterly revenue surpassing RMB 20 billion (US$2.8 billion) for the first time in its third-quarter results, signaling a potential turnaround for the Chinese electric vehicle maker as it narrows losses and expands delivery volumes. The company's revenue reached RMB 20.38 billion in the three months ended September, up 101.8% year-on-year and 11.5% from the previous quarter.
The Guangzhou-based automaker delivered 116,000 vehicles in the third quarter, a 149.3% surge from a year earlier, driving the revenue growth. Net losses narrowed substantially to RMB 3.8 billion (US$ 530 million) from RMB 18.1 billion (US$ 2.5 billion) in the same period last year and RMB 4.8 billion (US $670 million) in the second quarter of 2025. Overall gross margin climbed to a record 20.1%, up from 15.3% a year ago and 17.3% in the previous quarter.
The company held RMB 48.33 billion (US$ 6.7 billion) in cash and cash equivalent sat the end of the third quarter, compared with RMB 35.75 billion (US$ 5 billion) a year earlier and RMB 47.57 billion (US$ 6.6 billion) at the end of the second quarter. Xpeng forecast fourth−quarter deliveries between 125,000 and 132,000 vehicles, with total revenue projected at RMB 21.5 billion to RMB 23 billion(US$ 3 billion to US$ 3.2 billion).
Beyond its core automotive business, Xpeng is positioning "physical AI" as a strategic growth driver, with Chairman and CEO He Xiaopeng outlining ambitious plans for humanoid robots and robotaxi services, though commercial viability remains uncertain in the near term.
Financial Metrics Show Broad Improvement
Xpeng's third-quarter results reflected strengthening fundamentals across key operational metrics, though structural volatility persists. Vehicle gross margin reached 13.1%, up from 8.6% a year earlier but down from 14.3% in the second quarter. The company attributed the annual improvement to continued cost reductions and the sequential decline to product transitions, indicating profitability remains sensitive to model cycles and pricing pressures.
The services and other segment contributed significantly to overall margin expansion, generating RMB 2.33 billion (US$325 million) in revenue with a profit margin of 74.6%, up from 60.1% a year ago and 53.6% in the prior quarter. This segment primarily comprises technology development services provided to manufacturing partners including Volkswagen. Management stated this business would continue growing in the fourth quarter, including initial revenue recognition from Volkswagen's adoption of Xpeng's Turing chip.
Research and development expenses rose 48.7% year-on-year to RMB 2.43 billion (US340 million), though the R&D expense ratio declined as revenue scaled. Selling, general and administrative expenses increased 52.6% to RMB 2.49 billion (US347 million), driven by higher sales commissions and marketing spending tied to expanding deliveries.
Seven New Models Planned for 2026
Xpeng is accelerating product launches to sustain momentum, with He Xiaopeng announcing seven new models for 2026. The company will introduce three extended-range electric vehicles in the first quarter and four additional models featuring dual-powertrain configurations throughout the year, targeting key market segments.
Extended-range vehicles represent a new growth vector. The X9 extended-range version launched pre-sales on November 6 at a starting price of RMB 350,000 (US$48,700), with pre-orders reaching nearly four times the previous X9 pre-sale period, according to He. Gu Jie, head of powertrain, indicated the company's architecture enables any model to offer pure electric or extended-range configurations based on market demand.
Overseas expansion is another priority. He stated Xpeng would launch at least three models for international markets in 2026. Export volume exceeded 5,000 units in September 2025, up 79.4% year-on-year and 65.8% month-on-month. The company's first overseas production facility commenced operations in Indonesia in July.
Physical AI Strategy Remains Nascent
Management devoted substantial discussion to "physical AI" initiatives during the earnings call, with He providing updated timelines for humanoid robots and autonomous vehicles. Xpeng aims to achieve mass production of advanced humanoid robots by the end of 2026 and targets annual sales exceeding one million units by 2030. The company reiterated plans to launch three robotaxi models in 2026 alongside trial operations.
These ventures remain in early stages and lack clear commercialization pathways. Unlike the automotive business, which demonstrates measurable progress in delivery volumes, margins and cost structure, physical AI initiatives currently function more as strategic narrative than near-term earnings contributors. Their commercial value requires longer-term assessment as the company navigates competitive pressures in its core EV business.
Xpeng's U.S.-listed shares fell 5.9% to US 23.54 at publication time, valuing the company at US$ 22.4 billion. Hong Kong-listed shares closed down 2.74% at HK 96, for a market capitalization of HK$ 183.34 billion.