XPeng fell about 1 percent today, its fourth straight down day, and it has now lost 10 percent of its value in a week. We think this is mostly a quiet drift lower with no new news to keep the July rally going.
Our view
XPeng is proving it can build advanced software that global giants like Volkswagen want to use, which is a massive advantage. If you already own it, sit tight and let the technology expansion play out.
The company has set its second quarter earnings release for August 24. These results will give a clearer look at how the business is managing its costs and whether its newer, lower-priced models are helping it reach its goal of becoming profitable.
July deliveries rise 4 percent to over 38,000 vehicles
The company delivered about 38,000 vehicles in July, a 4 percent increase from a year ago. Consistent delivery growth is vital for the company because it needs to spread its high research and development costs across a larger number of cars to eventually turn a profit.
The chief executive stated that the company is moving beyond just making electric cars and is now focused on robotics. This shift highlights the company's plan to use its artificial intelligence software in more than just vehicles, potentially opening up new ways to make money from its technology.
The company introduced its L03 SUV in Germany, marking its first major vehicle launch outside its home market. Expanding into Europe is a key part of the company's strategy to grow its sales volume and reduce its reliance on the highly competitive Chinese market.
Barclays analysts reduced their price target for the stock, though it remains above the current trading price. An underweight rating is a signal that the firm expects the stock to perform worse than other companies in the same industry over the coming months.
Analysts have recently adjusted their views following the company's push into overseas markets and robotics. Most analysts, 11 out of 17, rate the stock a buy, and the average target price suggests a 69% gain from today's price.
Average target$19.73+69%vs $11.68 today
TodayAvg price
Low $15High $25.20
Buy17 analysts
3Bearish
3Neutral
11Bullish
FirmRatingPrice TargetDate
Barclays
Underweight
$16→$15
7/16/2026
Jefferies
Buy
$25.20
5/29/2026
Macquarie
Outperform
$19
5/28/2026
Barclays
Underweight
$20→$17
2/18/2026
Macquarie
Outperform
$32→$26
1/15/2026
Loop Capital Markets
—
$25
1/6/2026
Morgan Stanley
Overweight
$34
11/11/2025
Goldman Sachs
Buy
$24
6/17/2025
Morgan Stanley
Overweight
$26→$28
6/12/2025
Bernstein
Market Perform
$18→$19
5/22/2025
Macquarie
Outperform
$24
5/21/2025
Bernstein
Market Perform
$14→$18
3/19/2025
XPeng earnings
Management has a habit of clearing the bars set by analysts, beating expectations in six of the last eight quarters. This suggests they have a good handle on their costs even during a difficult period for sales.
Earnings history
EstimateBeatMiss
XPeng past earnings results
Expected
Actual
Surprise
EPS
$-0.11
$-0.27
-143.6%
Revenue
$1.87B
$1.89B
+1.0%
Key highlights
Revenue outlook improving: Management expects total revenue to reach between RMB19.60 billion and RMB20.80 billion next quarter, which would be a 7.25% to 13.82% increase over the same time last year. This signals a return to growth after a seasonal slowdown where sales fell 17.6% this quarter.
Delivery volume declining: The company delivered 62,682 vehicles this quarter, which is a 33.3% drop compared to the 94,008 cars delivered a year ago. Management attributed the lower vehicle sales revenue, which fell to RMB11.00 billion, directly to this decrease in customer shipments.
Vehicle margins expanding: Vehicle margin, the percentage of car sales revenue left after paying for production, rose to 12.1% from 10.5% a year ago. This improvement happened because the company cut costs and sold a better mix of higher priced models, even as memory chip and battery prices pushed costs up compared to last quarter.
Research spending surging: Spending on research and development jumped 46.8% to RMB2.91 billion as the company works on four new car models and artificial intelligence technology. These investments, alongside lower government subsidies, contributed to an operating loss of RMB1.87 billion.
Services revenue growing: Revenue from services and other items grew 41.2% to RMB2.03 billion, driven by technical research services and parts sales. This part of the business carries a much higher profit margin of 66.5% compared to the cars themselves, helping support the total gross margin of 20.6%.
Our take: This was a difficult quarter where high spending and falling deliveries led to a wider loss than expected. However, the 12.1% vehicle margin shows the company is becoming more efficient at building cars. If the promised new models drive the predicted 59% jump in next quarter's deliveries, the path to recovery remains intact.
