XPeng Sounds Alarm On China EV Demand With Disappointing Outlook

XPeng Inc. (NYSE:XPEV) delivered a milestone quarter, swinging to profit and posting robust growth, but a revenue miss and a sharply weaker outlook signaled mounting pressure from a cooling Chinese EV market. Revenue Growth And Deliveries The company delivered 22.25 billion Chinese yuan ($3.18 billion) in quarterly revenue, a 38.2% year-over-year (Y/Y) jump that landed just shy of the $3.32 billion analyst consensus forecast. The Tesla Inc. (NASDAQ:TSLA) rival's quarterly vehicle deliveries increased 27.0% Y/Y to 116,249. XPeng's physical sales network had 721 stores, covering 255 cities as of December 31, 2025. XPeng's self-operated charging station network reached 3,159 stations as of December 31, 2025, including 2,108 XPENG ultra-fast charging stations. Margins, Profitability, And Balance Sheet Revenues from vehicle sales increased 30.0% Y/Y to 19.07 billion Chinese yuan ($2.73 billion) due to higher deliveries. Gross margin was 21.3% versus 14.4% a year ago. Vehicle margin was 13.0% versus 10.0% a year ago, primarily attributable to the cost reduction. Operating loss for the quarter was 40 million Chinese yuan ($10 million) Adjusted earnings per ADS were 0.52 Chinese yuan versus the analyst consensus loss estimate of 0.06 Chinese yuan. In USD terms, the adjusted EPADS was 7 cents. The company held $6.81 billion in cash and equivalents as of December 31, 2025. Strategy And Outlook Xiaopeng He said XPeng delivered 429,445 vehicles in 2025, marking a 125.9% year-over-year increase, while continuing to advance its Physical AI strategy through faster commercialization and global expansion. He added that the company is at a key turning point in AI-driven mobility, aiming to grow its share in AI-defined vehicles, move from advanced driver assistance toward full autonomy, expand its next-generation VLA model globally, and scale production of humanoid robots. XPeng projects fiscal first-quarter 2026 vehicle deliveries between 61,000 and 66,000 units, reflecting a decline of 29.79%-35.11% Y/Y. The company anticipates a quarterly revenue of 12.20 billion Chinese yuan to 13.28 billion Chinese yuan (marking a decline of 16.01%-22.84% Y/Y), versus the analyst consensus estimate of 14.81 billion Chinese yuan. XPeng's weak first-quarter revenue outlook, hit by slowing Chinese EV demand, overshadowed its first-ever quarterly profit at the end of 2025, Bloomberg reported. The report added that Chinese automakers are bracing for weaker EV demand as subsidy cuts weigh on sales, with overall passenger vehicle sales down 25% year-on-year in February and new energy vehicles falling even more, according to the China Passenger Car Association. XPEV Price Action: XPeng shares were down 2.35% at $18.70 during premarket trading on Friday, according to Benzinga Pro data. Image via Shutterstock