XPeng's Two-Track Strategy Leaves Investors Cold Despite Record Robotik Funding

XPeng's Q2 revenue misses estimates, net loss widens to RMB 1.34B, while robotics unit Dogotix raises $900M at $6.3B valuation. Shares slide near 52-week low.

There are moments when a company's share price tells a harsher story than its press releases. XPeng is living through one of those moments right now.

The Chinese electric vehicle maker delivered its second-quarter numbers on Monday alongside news of a landmark fundraising for its robotics division — and the market responded by selling off the stock. Shares now trade at €9.65, barely above the 52-week low of €9.42 hit just a day earlier. The secondary report pegged the price at €9.54, roughly 1.3 percent above that trough, following a slide of around 7 percent on the day.

The Core Business Is the Problem

Strip away the robotics headlines and the underlying picture is sobering. Revenue came in at RMB 19.74 billion, up 8 percent year-on-year and 51.5 percent quarter-on-quarter — but that sequential jump reflects recovery from a weak first quarter rather than accelerating demand. The secondary source converts that to $2.91 billion, just shy of the $2.95 billion consensus.

The net loss widened from RMB 480 million to RMB 1.34 billion, far exceeding analyst expectations. On a per-share basis, the adjusted loss came to 19 US cents, well above the consensus of RMB 0.76. The third-quarter revenue guidance of RMB 21.7 billion to RMB 23.4 billion also lands meaningfully below the roughly RMB 26.7 billion the Street had penciled in, with delivery guidance of 115,000 to 121,000 vehicles implying at best modest growth and at worst a year-on-year decline.

There are genuine bright spots. Gross margin expanded 3.4 percentage points to 20.7 percent. The operating loss narrowed sequentially from RMB 1.87 billion to RMB 1.14 billion, though it remains wider than a year ago. International deliveries jumped 81 percent in the quarter and accounted for over 25 percent of first-half revenue. Service revenue, boosted by technical development work for Volkswagen, grew nearly 94 percent to RMB 2.70 billion. And the company ended June with RMB 40.48 billion ($5.97 billion) in cash — enough runway to fund both bets simultaneously.

The Robotics Story That Should Be Bigger

The second narrative is arguably the more spectacular one. XPeng's robotics unit — identified in one report as Dogotix Inc. — closed a funding round of more than $900 million at a post-money valuation exceeding $6.3 billion, billed as the largest private raise China's embodied AI industry has ever seen.

IDG Capital led the round with $600 million from external investors, joined by Gaorong Ventures and strategic participation from Tencent and Alibaba. The remaining $300 million came from the XPeng parent and management. Proceeds will fund humanoid robot hardware, training for physical-AI models, and manufacturing capacity.

The IRON robot, boasting 76 degrees of freedom and three Turing AI chips delivering 2,250 TOPS of compute, is slated for series production by year-end with a target capacity of 1,000 units per month. Initial deployments in retail and industrial settings are planned for this year, with broader commercial sales from 2027. CEO He Xiaopeng has taken direct charge of the robotics unit and reportedly devoted more presentation time to robots than cars, arguing that the technical hurdles for general-purpose humanoids are at least twenty times greater than those for intelligent EVs.

The strategic logic is clear: over 85 percent of IRON's supply chain overlaps with the automotive business, which should keep costs down, while the company claims robot hardware gross margins will comfortably exceed those of its current vehicle lineup.

Why the Market Isn't Buying It

The disconnect is the story. Investors continue to value XPeng as an automaker first and foremost, and the robotics vision isn't compensating for the erosion of confidence in the core business. That's a notable dynamic given that the funding round proves even Tencent and Alibaba are willing to back the robot ambition.

Macquarie trimmed its price target to $18 on Monday, citing lower valuation multiples following the quarterly results. The stock has now lost 47 percent since the start of the year and 60 percent from its November 52-week high. On a one-month basis, the decline stands at 15 percent. The relative strength index of 33 points to oversold conditions, which could fuel a short-term technical bounce — but that does nothing to address the fundamental growth slowdown in the vehicle business.

The question for investors isn't whether XPeng has good ideas. It clearly does. The question is whether the core business can heal fast enough for the market to start listening to the second story at all.