XPeng Shares Fall Despite Landmark Quarterly Profit

XPeng posts first-ever quarterly net profit but stock falls over 8% as weak delivery and revenue forecasts for 2026 cast doubt on its AI and robotics strategy.

Chinese electric vehicle manufacturer XPeng achieved a significant milestone in the final quarter of 2025 by posting its first-ever net profit. However, investor reaction was sharply negative, with the company's equity declining substantially in Friday's trading session. The downturn was driven by a disappointing forecast for the coming year, which has cast a shadow over management's ambitious artificial intelligence and robotics initiatives.

Weak Guidance Overshadows a Record Quarter

The positive momentum from the quarterly report was quickly erased when the company issued its outlook for Q1 2026. Management now anticipates vehicle deliveries of just 61,000 to 66,000 units, representing a year-over-year decline of approximately 30% to 35%. Expected revenue, projected to reach a maximum of 13.28 billion Renminbi, also fell notably short of market expectations, which had been above 15 billion. Company leadership attributed the softer forecast to seasonal weakness and the newly introduced 5% purchase tax on electric vehicles in China. Investors responded immediately, sending the stock down 8.16% to 15.20 euros on Friday. This loss extended the share price decline over the past seven days to more than 13%.

This guidance stands in stark contrast to the company's recent performance. The fourth quarter of 2025 saw XPeng surpass expectations, reporting a net profit of 0.38 billion Renminbi. This result was supported by a record gross margin of 21.3%.

Strategic Pivot to AI and Robotics Faces Profitability Hurdle

Concurrently, XPeng is aggressively pursuing a transformation into an AI-driven mobility company. A cornerstone of this strategy is its in-house "Turing" chip, with over 200,000 units already delivered. The company aims to hit the one-million-unit mark by the end of 2026, intending to supply computational power to external partners like Volkswagen. The first co-developed model, the ID. UNYX 08, has already begun production.

To counter the current headwinds, XPeng plans to increase its research and development expenditure for artificial intelligence to 7.0 billion Renminbi this year. A portion of this investment is earmarked for so-called physical AI. The company is targeting mass production of its humanoid robot, "IRON," by the end of 2026, with a goal of manufacturing over 1,000 units per month.

Despite the strong finish to 2025, the full year still concluded with a net loss of 1.14 billion Renminbi. Consequently, achieving sustained profitability remains the most critical operational challenge for XPeng in the near term.