Delivery volume doubles, losses shrink by 80%. How does XPeng Motors boost its valuation through technology?

(Source: Zhengtan Finance)

Image source: Duguo

On March 20, XPeng Motors (9868.HK) released its 2025 full-year results. Full-year deliveries were 429.4 thousand units, up 125.9% year over year. Total revenue was RMB 76.72 billion, up 87.7% year over year. Net loss was RMB 1.14 billion, with the loss narrowing by 80.31% year over year. Notably, XPeng Motors achieved profitability for the first time in the fourth quarter of 2025, with single-quarter net profit of RMB 380 million.

With its full-year 2025 loss narrowing, XPeng Motors’ outlook for its first-quarter 2026 performance is not optimistic. It expects 2026 first-quarter vehicle deliveries of between 61,000 and 66,000 units, representing a year-over-year decline of approximately 29.79% to 35.11%; total revenue of between RMB 12.2 billion and RMB 13.28 billion, representing a year-over-year decline of approximately 16.01% to 22.84%.

Can XPeng Motors turn a full-year profit in 2026?

1

Sales drive revenue growth ●

XPeng Motors’ revenue is mainly composed of vehicle sales revenue and service and other revenue. In 2025, XPeng Motors’ vehicle sales revenue was RMB 68.38 billion, up 90.8% year over year, mainly due to an increase in delivery volume; service and other revenue was RMB 8.34 billion, up 65.6% year over year.

XPeng Motors said that the increase in service and other revenue was mainly due to: after achieving several key milestones in 2025 under agreements signed with automakers, the company increased the provision of technology R&D services to those manufacturers; as cumulative vehicle sales increased, revenue from sales of parts and accessories rose; and revenue from its carbon credit business increased as well.

Notably, XPeng Motors’ cooperation with Volkswagen Group is gradually coming to fruition. In 2023, Volkswagen Group and XPeng Motors reached a long-term strategic cooperation; in August 2025, the two sides announced a deepening of their cooperation. The application scope of the regional control electronic and electrical architecture CEA co-developed by both sides will expand from pure electric vehicle models to domestically produced gasoline and hybrid models. In March 2026, the first jointly developed model between Volkswagen and XPeng, the ZHONGYI 08, officially entered mass production, with expected launch in the first half of 2026; the second co-developed model will also enter the market within 2026.

In its 2025 second-quarter earnings call, XPeng Motors previously said that under the newly expanded cooperation on electronic and electrical architecture, related revenue will be recognized after these gasoline and plug-in hybrid models begin mass production. In essence, it is adding a third recurring revenue source on top of the two existing recurring revenue sources. Obviously, as the jointly built models with Volkswagen gradually roll out, XPeng Motors will also receive more revenue.

From the gross margin perspective, XPeng Motors’ vehicle gross margin increased from 8.3% in 2024 to 12.8%, mainly due to continuous cost reductions and improvements in the model product mix. Overall gross margin increased from 14.3% to 18.9%.

On expenses, XPeng Motors’ R&D spending in 2025 was RMB 9.49 billion, up 47% year over year. This was mainly due to expanding the product lineup to support future growth, resulting in increased expenses for developing new models and related technologies. Selling, general and administrative expenses were RMB 9.4 billion, up 36.8% year over year, mainly due to higher franchise store commissions driven by rising sales volume, higher marketing and advertising expenses, and higher employee compensation due to an increase in the number of employees.

In addition, XPeng Motors’ government subsidy income also increased significantly. In 2025, XPeng Motors’ net other income was RMB 1.76 billion, up 198.9% year over year, mainly due to an increase in government subsidies collected.

2

Average selling price per vehicle under RMB 160,000 ●

In 2025, XPeng Motors’ delivery volume grew 125.9% year over year, while revenue growth was 87.7%. At the same time, based on vehicle revenue/deliveries, XPeng Motors’ average selling price per vehicle in 2025 was about RMB 159,000. In 2024, its average selling price per vehicle was about RMB 188,000. This indicates that XPeng Motors is still relying on mid- and low-end cars to drive volume.

Data from CarHome shows that in 2025, XPeng MONA M03 sold 175.3 thousand units, accounting for 40.83% of total sales; XPeng P7+ sold 75.7 thousand units, accounting for 17.63% of total sales; XPeng G6 sold 47.9 thousand units, accounting for 11.15% of total sales. These three models together contributed nearly 70% of XPeng Motors’ 2025 total sales.

Among them, XPeng MONA M03’s official guidance price was RMB 119,800–RMB 139,800; XPeng P7+’s official guidance price was RMB 186,800–RMB 208,800; XPeng G6’s official guidance price was RMB 176,800–RMB 198,800.

For comparison, the top three models by sales volume for XPeng Motors in 2024 were XPeng MONA M03, XPeng G6, and XPeng G9. In March 2025, the 2025 XPeng G6 and G9 were launched. It is understood that the new G6 was priced at RMB 176,800–RMB 198,800, while the new G9 was priced at RMB 248,800–RMB 278,800. Compared with the 2024 XPeng G6 priced at RMB 199,900–RMB 276,900 and the G9 priced at RMB 263,900–RMB 359,900, the new prices were lowered by RMB 20,000–RMB 80,000.

Clearly, XPeng Motors achieved a substantial increase in delivery volume by relying on “low pricing.” This is also related to industry trends. According to data from Cui Dongshu, Secretary-General of the CPCA (China Passenger Car Association), the average price of new energy vehicles has recently been gradually declining: from an average price of RMB 184,000 in 2023, down to RMB 180,000 in 2024, and to RMB 161,000 in 2025, showing a clear drop in prices.

At the same time, 2026 is a crucial year for XPeng to expand its product lineup and upgrade product strength. XPeng plans to launch four new models to fill the gaps in the large-car and compact-segment categories. The new models are designed by a newly restructured design team, targeting the global market. They support dual-energy capability in one vehicle and have upgrades in autonomous driving capability from L2+ to L4.

In addition, AI has also become a key focus for XPeng Motors. In its financial report, XPeng Motors Chairman and CEO He Xiaopeng said he believes XPeng Motors is at a historic inflection point for physical AI applications. The company not only needs to expand AI vehicle global market share and complete the leap from L2+ assisted driving to L4 autonomous driving, enabling the second-generation VLA to go overseas, but also needs to achieve large-scale mass production of advanced humanoid robots.

According to available information, in March 2026, XPeng Motors officially released its second-generation VLA intelligent driving system. XPeng views this model as its first mass-production physical world foundation model. It is both an action generation model and a physical-world model for understanding and simulation. It can perform self-evolving learning while understanding real-world interaction rules, and can cross-domain drive cars, Robotaxi, robots, and flying cars.

The second-generation VLA has also become an important driver for XPeng Motors to increase sales volume and raise the average selling price of its vehicles. At the 2025 earnings call, He Xiaopeng said that since the launch of VLA2.0, the average daily test-drive volume at XPeng stores in March increased month over month by one time. The sales share of Ultra and Ultra SE models increased by more than one time. And starting from March 19, VLA2.0 has been gradually pushed to users. It will first cover the Ultra version of the XPeng P7 Ultra, and then be pushed to the Ultra versions of models such as XPeng G7 and X9. He Xiaopeng said, “We believe that after truly full-scale rollout, and with continuous upgrades to the second-generation VLA, there will be more foot traffic, leading to further significant conversion, and we will raise the average selling price of all our single vehicles.”

Against the backdrop of new highs in both delivery volume and revenue, and a sharp narrowing of losses, XPeng Motors also faces the reality of a declining average selling price per vehicle and a cooler outlook for the first quarter. Whether the second-generation VLA and the new product lineup matrix can help XPeng Motors maintain delivery volume growth while raising the average selling price per vehicle will be one of its key tests for achieving full-year profitability.

Author | Wei He

Source | CarCircle Visibility (CarVisibility)

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