Chinese automaker XPeng reported its first-ever quarterly net profit, marking a milestone for the company as it scales its business to humanoid robots, robotaxis, and flying cars.
On the earnings call, management laid out an ambitious 2026 roadmap including new model launches, increased focus on international expansion, and higher R&D spending focused on autonomous driving.
A few hours earlier, when posting its results, XPeng said it expects a significant sales slump in the first quarter of the year with between 61,000 and 66,000 units delivered globally.
The company delivered 116,249 EVs during the quarter with gross margin climbing to a record 21.3%, up sharply from 14.4% in the same period a year earlier.
XPeng plans to launch seven models in 2026 — four all-new vehicles spanning full-size to compact segments, plus three range-extended variants (EREV) of existing fully electric models.
All new launches will feature dual powertrain options and advanced autonomous driving capabilities ranging from L2+ to L4-ready hardware.
Two of the new SUVs will join the Mona series, XPeng‘s more affordable lineup, as the company looks to broaden its reach across price segments.
All four SUVs will be offered in both battery electric (BEV) and extended-range versions.
“As deliveries of new models ramp up, we’ll achieve strong quarter-over-quarter growth in volume,” founder and CEO He Xiaopeng said, despite the weak first-quarter guidance.
Among the highlights is the XPeng GX — the brand’s first flagship six-seat, three-row SUV, which has been road-testing in China for several months and is set to open pre-orders in the second quarter.
“The GX delivers MPV-class comfort and spaciousness and features steer-by-wire and rear-wheel steering. It will be our first model designed to support L4-level hardware and software capabilities,” He added.
The GX will enter one of China’s most competitive segments, facing off against the new-generation Nio ES8 and the upcoming, larger ES9, the Onvo L90, the Li Auto i8, the Tesla Model Y L, and the Zeekr 9X.
XPeng also recently debuted the third-generation X9 MPV in a fully electric version, alongside an extended-range variant of its entry-level G6 SUV — the latter arriving two months after the electric third-gen G6 and G9 rolled out.
Overseas Targets
XPeng delivered 45,008 vehicles outside China in 2025, accounting for roughly 10% of total deliveries.
The company aims to double that figure this year and raise the overseas revenue contribution to over 20%.
Its four new models are set to enter global markets in 2026, and the brand plans to double its sales and service network to 680 stores worldwide.
Last year, XPeng expanded to 60 markets, meeting its 2025 target.
Additionally, it began assembling electric vehicles in Europe last year, in a partnership with Magna Steyr — allowing it to bypass the European Commission’s tariffs on Chinese EVs.
Morgan Stanley expects Europe, ASEAN, and Latin America to drive 20% to 25% growth for the brand.
“With the enhanced overseas competencies, our global expansion will further accelerate significantly through 2027 and 2028, and revenue from overseas markets will become one of the core drivers of the company’s profitability,” He Xiaopeng said during the earnings call.
Vice Chairman and President Brian Gu said he anticipates “the global overseas market will represent much faster market growth compared to our overall growth rates, as well as becoming a core profit center for our business.”
Later in the call, Gu admitted that “approximately 50% of our overseas volume is in Europe.”
Looking further ahead, XPeng is targeting 1 million annual overseas sales by 2030, with international markets expected to generate over 70% of profits, the CEO first said in an internal memo last month.
The same memo also revealed that Volkswagen Group will adopt XPeng‘s autonomous driving solution, VLA 2.0 — expanding the brand’s collaboration beyond software development for VW China.
R&D Revenue and Expenses
Revenue from services and others reached 3.18 billion yuan ($450 million) in the fourth quarter, more than doubling year-over-year, driven largely by technical R&D services revenue from Volkswagen.
Mass production of the first model co-developed by the two automakers — the Volkswagen ID.UNYX 08 — began last week.
R&D expenses rose 43.2% year-over-year to 2.87 billion yuan ($410 million) in the fourth quarter, reflecting higher spending on new vehicle models and technologies.
XPeng invested a total of 9.5 billion yuan ($1.4 billion) in R&D throughout 2025, of which 4.5 billion yuan ($652 million) was allocated to AI.
“Pushing the boundaries of physical AI is very exciting for my team and me. We’re more committed than ever to intensifying our R&D investments,” He Xiaopeng said.
XPeng plans to invest 7 billion yuan in physical AI-related R&D this year, on top of its existing vehicle development budget.
Questioned by Golman Sachs’ analyst Tina Hou on whether these AI-related expenses were “all recorded in R&D or some of it will be also allocated to capital expenses,” the Chief Executive Officer said that the company’s “R&D spending will become more efficient.”
“In the subsequent years, the growth rate of our AI R&D investment will, you know, not be as significant or aggressive as previous years,” He said.
VLA 2.0
Management revealed that the second-generation VLA autonomous driving system will receive at least one major over-the-air update per quarter.
The next quarter’s update will expand autonomous driving coverage beyond major highways and city roads to include smaller roads, parking lots, and campus environments.
“It’s actually a very critical change, meaning that our capability is evolving from navigation-enabled public roads to cover more areas,” He said.
XPeng is also scaling its on-vehicle model from 10 billion to 20 billion parameters and is targeting a 5 to 10x improvement in safety disengagement mileage.
Preparation for the second VLA unit is underway, and the company expects to begin gradual beta testing and deployment across overseas markets by the end of this year into early 2027.
He said initial international tests have been encouraging, even without local road data.
“Even without any overseas actual road data, our VLA alone performs really well and achieves excellent results,” noting the system’s generalizability across multiple markets.
Robotaxi Plans
XPeng announced last November its plans to launch three robotaxi models in 2026 — a 5-seater, a 6-seater, and a 7-seater.
The models will be powered by a vision-only solution and four in-house developed Turing AI chips delivering up to 3,000 TOPS of compute power.
The company will begin manned pilot operations with safety drivers in the second half of the year and is targeting fully driverless operation in early 2027.
“By beginning of next year, hopefully, we can do without the safety driver on board,” the CEO stated on Friday. “In the second half of the year, we plan to launch pilot passenger operations for our Robotaxi service to validate the technology, user experience, and the business model.”
Rapid growth in the robotaxi business is anticipated between 2027 and 2028.
He added that the company intends to open its platform globally, partnering with operational partners to scale autonomous driving across multiple markets.
Late last year, reacting to the robotaxi announcement, Bernstein had cautioned that while mass production was planned for 2026, licensing and safety mileage accumulation would likely delay fully driverless operation permits until 2027 or later.
Deliveries
XPeng is targeting full-year deliveries of 550,000 to 600,000 vehicles — a 28% to 40% jump over 2025.
However, the near-term outlook was far less encouraging.
The company guided first quarter deliveries of just 61,000 to 66,000 units — a 30% to 35% drop year-over-year — as reduced government subsidies and the Chinese New Year holiday weighed heavily on industry-wide demand.
The first-quarter revenue forecast of 12.2 to 13.3 billion yuan also came in well below analyst expectations.
XPeng‘s US-listed shares plunged by 8.3% on Friday, closing at $17.55
