Xpeng has reported an 8% year-on-year increase in second-quarter revenue, reaching $2.9B (~AUD 4.1B), but the company’s net loss nearly tripled compared to the same period last year. Despite stronger sales and improved gross margins, rising expenses continue to weigh on profitability.
Revenue Growth and Margins
Xpeng‘s second-quarter revenue came in at $2.9B (~AUD 4.1B), up 8.0% from a year earlier and 51.5% higher than the previous quarter. The result was within the company’s guidance range, though close to the lower end.
Gross margin improved to 20.7% in the second quarter, compared to 17.3% a year earlier and 20.6% in the first quarter. However, the vehicle margin was 12.1%, flat from the previous quarter but down from 14.3% a year ago. Xpeng attributed the year-on-year decline in vehicle margin to a product-generation transition.
Profitability and Expenses
Xpeng’s net loss for the second quarter was $198.7M (~AUD 277.6M), a 179% increase from $71.2M (~AUD 99.4M) a year earlier. The loss narrowed by 24.7% compared to the first quarter’s $264M (~AUD 368.7M).
On a non-GAAP basis, excluding share-based compensation and a fair-value gain on a derivative liability, the net loss was $183.9M (~AUD 256.8M). Research and development expenses rose 32.1% year-on-year to $431.6M (~AUD 602.8M), mainly due to higher spending on new vehicle models and AI-related technologies. Selling, general, and administrative expenses increased 15.2% to $370.8M (~AUD 517.8M), reflecting greater marketing and advertising costs.
Business Segments and Deliveries
Revenue from services and other businesses surged 93.9% year-on-year to $400.4M (~AUD 559.3M), with the segment’s margin rising to 75.1% from 53.6%. Xpeng said this growth was mainly driven by technical research and development services provided to an automaker, as well as increased revenue from parts and accessories sales.
Second-quarter vehicle sales revenue reached $2.5B (~AUD 3.5B), up 1.0% year-on-year and 55.0% sequentially. Vehicle deliveries totaled 103,295 units, a slight increase of 0.1% year-on-year and up 64.8% from the previous quarter.
Cash Position and Guidance
As of June 30, Xpeng held $6B (~AUD 8.4B) in cash, cash equivalents, restricted cash, short-term investments, and time deposits, down $238.8M (~AUD 333.5M) from the end of March.
For the third quarter, Xpeng has guided for deliveries of 115,000 to 121,000 vehicles, representing a year-on-year range from a 0.87% decline to a 4.30% increase and sequential growth of 11.33% to 17.14%. Expected third-quarter revenue is $3.2B (~AUD 4.5B) to $3.5B (~AUD 4.8B), which would be 6.47% to 14.81% higher year-on-year.
Recent Developments and CEO Comments
Xpeng delivered 38,027 vehicles in July. To meet its third-quarter guidance, the company will need to deliver between 76,973 and 82,973 vehicles in August and September, or an average of about 38,487 to 41,487 vehicles per month.
Chairman and CEO He Xiaopeng said the back-to-back success of the GX and Mona L03 models had increased the company’s confidence in its upcoming new models. Xpeng also expects the mass production and commercialization of physical AI technologies to accelerate over the coming year.
Earlier, Xpeng announced that its robotics subsidiary Dogotix had secured $900M (~AUD 1.3B) in conditional funding commitments at a post-money valuation of $6.3B (~AUD 8.8B). This transaction will establish a separate funding channel for the robotics business while allowing Xpeng to retain control.
Why this matters
Xpeng’s results highlight the challenges faced by Chinese EV makers as they scale up production and invest heavily in new technologies. While revenue and gross margins are improving, rising R&D and marketing expenses are putting pressure on the bottom line.
The company’s ability to meet its ambitious third-quarter delivery and revenue targets will be closely watched, as will the progress of its AI and robotics initiatives.
What this means for buyers
Buyers considering Xpeng vehicles can expect the company to continue launching new models and investing in advanced technologies. However, the financial results suggest that Xpeng is still working toward sustained profitability, which may influence future pricing, incentives, and after-sales support.
Those interested in Xpeng’s latest models or upcoming AI features should monitor the company’s delivery performance and product announcements over the coming months.
Key Specs
- Q2 Revenue: $2.9B (~AUD 4.1B)
- Q2 Net Loss: $198.7M (~AUD 277.6M)
- Q2 Gross Margin: 20.7%
- Q2 Vehicle Deliveries: 103,295 units
- Q2 R&D Expenses: $431.6M (~AUD 602.8M)
- Cash and Equivalents (June 30): $6B (~AUD 8.4B)
- Q3 Delivery Guidance: 115,000–121,000 vehicles
- Q3 Revenue Guidance: $3.2B (~AUD 4.5B) to $3.5B (~AUD 4.8B)
Source
Images sourced from: xpeng.com, cnevpost.com, evkx.net, businessinsider.com
