Key Takeaways
- XPeng’s Q1 2026 net loss reached 1.78 billion yuan ($262.6 million), significantly exceeding analyst projections of 811.9 million yuan.
- Quarterly revenue declined 18% to 13.03 billion yuan amid vehicle deliveries plunging approximately one-third compared to the prior year.
- Gross margin expanded to 20.6% from 15.6% year-over-year, representing a major positive for market participants.
- Despite missing estimates, XPEV shares climbed 3.8% to $17.07 in premarket sessions.
- The company’s Q2 outlook projects 100,000–106,000 vehicle deliveries with revenue between 19.60–20.80 billion yuan.
XPeng (XPEV) kicked off 2026 with challenging first-quarter results that featured a significant net loss and declining revenues, yet investors responded positively to enhanced profitability metrics and encouraging forward guidance — pushing shares higher before the opening bell.
The Chinese electric vehicle manufacturer based in Guangzhou reported a Q1 net loss of 1.78 billion yuan ($262.6 million), representing a substantial increase from the 664 million yuan loss recorded in the same period last year. Revenues contracted 18% to reach 13.03 billion yuan. The results fell short of analyst consensus — Wall Street had anticipated a loss of 811.9 million yuan alongside revenue of 13.55 billion yuan.
Shares of XPEV climbed 3.8% to reach $17.07 during Thursday’s premarket session, defying the earnings shortfall.
The automaker delivered 62,682 vehicles during the quarter, representing a decline from the 94,008 units delivered in Q1 2025 — approximately a one-third reduction. This marked the end of several consecutive quarters of record-breaking performance and mirrored broader challenges facing China’s electric vehicle industry, where total new vehicle sales decreased roughly 7% in Q1 2026.
Profitability Metrics Show Improvement
While headline numbers fell short of expectations, the company’s gross margin expanded to 20.6%, up from 15.6% in the year-ago quarter. Vehicle-specific margins improved to 12.1%, supported by operational efficiency gains and an optimized product portfolio.
This margin expansion likely explains why shares avoided a selloff following the earnings release. The data indicates that despite lower unit volumes, XPeng is extracting greater profitability from each vehicle transaction.
Li Auto, which also unveiled quarterly results Thursday, experienced a 3.4% stock decline to $15.25 after similarly underperforming expectations. Li reported a 15-cent per-share loss on $3.3 billion in revenue, compared to analyst estimates calling for a 13-cent loss on $3.2 billion. While deliveries increased modestly to 95,142 units, revenues contracted on a year-over-year basis.
Second Quarter Outlook Suggests Rebound
Looking ahead to Q2, XPeng projects deliveries ranging from 100,000 to 106,000 vehicles — approximately unchanged from the prior year — alongside revenue expectations of 19.60 to 20.80 billion yuan. This guidance represents substantial sequential growth compared to Q1’s weaker performance.
Li’s Q2 delivery forecast proved less optimistic, targeting approximately 97,500 vehicles, representing a roughly 12% year-over-year decline.
Considering projections from NIO, which reported results independently, the three major Chinese EV manufacturers collectively anticipate delivering around 313,000 vehicles in Q2 — representing 9% year-over-year growth and an uptick from the 5% growth registered in Q1. This provides a cautiously optimistic indicator for the sector overall.
Heading into Thursday’s earnings announcement, XPEV had declined 19% year-to-date, potentially cushioning investor reaction to the disappointing results.
During April, Tesla recorded approximately 139,000 vehicle sales in China, down 15% year-over-year, with TSLA shares declining 1.6% in premarket trading to $433.51.
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