The company’s flat second-quarter deliveries outperformed a shrinking home market, while overseas expansion and a major robotics initiative offer new paths to growth

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Key Takeaways:

  • Xpeng’s EV deliveries held steady in the second quarter despite fierce competition in China, but forex and investment losses pushed its net loss sharply higher
  • The EV maker is looking overseas and beyond cars for growth, using its technology in Volkswagen projects and humanoid robots

It may not sound like much, but Xpeng Inc.’s (NYSE:XPEV) (9868.HK) ability to keep its electric vehicle (EV) sales steady in the second quarter represented a modest achievement. The feat comes in a Chinese market where sales are hitting the skids after several years of explosive growth, even as automakers continue to churn out new models at breakneck speed. But the picture wasn’t all upbeat for Xpeng either, as currency and investment losses caused its heavy losses to continue.

The company, one of many startups and state-owned EV makers in a crowded Chinese market, delivered 103,295 vehicles in the three months through June, up just 0.1% year-on-year, according to its latest quarterly report released last week. Its revenue rose 8% to 19.74 billion yuan ($2.91 billion), which looked relatively strong in the current climate of steady price erosion, while its gross margin rose to 20.7% from 17.3%.

Despite those improvements, Xpeng continued to hemorrhage money. Its second-quarter net loss nearly tripled to 1.34 billion yuan from 480 million yuan a year earlier, mainly due to foreign-exchange and investment losses.

The second-quarter performance marked an improvement from the first quarter, when the company’s deliveries skidded 33% year-on-year to 62,682, as its revenue fell 17.6% to about 13 billion yuan.

Xpeng forecast its recently stabilizing situation will continue into the current quarter, forecasting deliveries of 115,000 to 121,000 vehicles for the three months through September, representing a 0.9% decline to a 4.3% increase year-on-year.  It also forecast its third quarter revenue would rise between 6.5% and 14.8% year-on-year.

Both its delivery and revenue outlooks fell short of analysts’ expectations, as its Hong Kong-listed shares fell more than 9% after the results were released.

The results also showed how founder and CEO He Xiaopeng is trying to make his company more than a carmaker, in a bid to diversify beyond the intensely competitive EV space. Xpeng, its executives and outside investors conditionally agreed to subscribe for $900 million of shares in Dogotix, Xpeng’s former internal humanoid robot division, valuing the recently spun off company at $6.3 billion.

Crowded road at home

China’s EV makers are fighting among each other for a market that has stopped delivering easy growth. Domestic sales of new energy vehicles (NEVs), including battery cars and plug-in hybrids, fell 13.4% to 5.09 million in the first half of this year, even as overall sales, including exports, rose 7.3% to 7.45 million, according to industry data. In effect, companies like Xpeng were only able to steady their ships by turning to exports.

The intense competition was highly visible at the Beijing Auto Show in April, where 173 out of 222 new models on display were NEVs. In such an environment of constant launches and rapid price cuts, even hit models can age quickly.

Xpeng’s ability to hold its deliveries roughly steady looks relatively impressive compared to some of its startup rivals. Li Auto’s (LI.US; 2015.HK) deliveries fell 11.5% to 98,330 vehicles in the second quarter, though Nio’s (NIO.US; 9866.HK) grew 49.4% to 107,658. Such variation is often tied to new vehicle launches, which can boost sales temporarily, before they quickly normalize at lower levels.

As the domestic market slows, overseas markets are offering another escape route. Xpeng delivered more than 20,000 vehicles abroad in the second quarter, up 81% year-on-year, as international operations supplied more than a quarter of its revenue in the first half of the year. It expects its overseas sales to keep growing, forecasting deliveries of more than 40,000 in the fourth quarter.

After co-founding mobile browser developer UCWeb, which Alibaba acquired in 2014, He Xiaopeng went on to become an investor and co-founder of Xpeng, alongside former GAC executives Xia Heng and He Tao. He left Alibaba to personally take the wheel at Xpeng in 2017 and later reorganized it after a troubled period exposed management problems in 2022. Volkswagen (VOW.DE) later chose the company’s G9 platform for two China-focused EVs and invested about $700 million for about 5% of Xpeng in 2024.

While the Volkswagen alliance targets the German automaker’s own EV sales in China rather than exported Xpeng cars, it is generating high-margin technology revenue. Xpeng’s services and other revenue nearly doubled year-on-year to 2.7 billion yuan in the second quarter, helped by development work for Volkswagen. The segment also posted a 75.1% gross margin, far higher than the 12.1% for vehicle sales.

From four wheels to two legs

Xpeng is also taking technology developed for cars into driverless taxis and humanoid robots. In April, He Xiaopeng said the company’s vision language action (VLA) driving system had beaten Tesla’s (TSLA.US) full self-driving (FSD) system in some complex situations and set an August goal to surpass it more broadly. On the earnings call, he said VLA 2.0 matched the world’s leading driver-assistance system on major roads and performed better on narrow roads, campuses and in parking facilities. Tesla began rolling out its FSD (Supervised) in China in May, but has yet to win approval for broader use.

Xpeng is also taking its technology beyond China. It said VLA 2.0, trained mainly on Chinese data, performed nearly as well during tests on German urban roads, and it aims to secure European approval in the first half of 2027. It has Guangzhou approval for tests with nobody in the driver’s seat and has completed more than 2,000 internal robotaxi orders. Passenger operations without an onboard safety operator are targeted for 2027.

Then there’s Dogotix, Xpeng’s former in-house humanoid robot division, whose main product is IRON, a model designed to work as a salesperson or guide in shops, showrooms and campuses using chips and AI models developed for its cars. The move into humanoid robots is natural for EV companies, whose cars already combine sensors, batteries, motors and AI. Tesla made a similar leap with Optimus.

But Xpeng isn’t exactly alone with its humanoid robot foray, entering a field that’s quickly becoming as overcrowded as NEVs. AgiBot shipped 5,168 humanoid robots in 2025 and the newly listed Unitree (688836.SH) shipped about 4,200, ranking first and second worldwide, according to Omdia.

Xpeng says 85% of the suppliers for IRON robots overlap with its auto supply chain. Dogotix is targeting scaled production by year-end and external sales in the first half of 2027, with monthly capacity of several thousand units later that year. Other investors in Dogotix include IDG Capital, Gaorong Ventures, Tencent and Alibaba.

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Benzinga Disclaimer: This article is from an unpaid external contributor. It does not represent Benzinga’s reporting and has not been edited for content or accuracy.