XPeng Inc. (XPEV) posted a net profit of RMB 0.38 billion (US$54.8 million) in its fourth‑quarter 2025 results, marking the company’s first profitable quarter since its IPO. The company’s gross margin reached a record 21.3 %, while vehicle sales revenue climbed 30 % year‑over‑year to RMB 19.07 billion. Vehicle margin improved to 13.0 % from 10.0 % in Q4 2024, but it was slightly lower than the 13.1 % margin reported in Q3 2025, reflecting a modest sequential decline that is offset by higher volumes and cost‑control measures.
The technology licensing and high‑margin services segment grew 121.9 % year‑over‑year to RMB 3.18 billion, driven largely by technical R&D services for Volkswagen and other partners. This segment’s rapid expansion underscores XPeng’s strategy to monetize its Physical‑AI platform beyond vehicle sales.
Full‑year 2025 figures show deliveries of 429,445 vehicles, a 125.9 % increase from the previous year, and revenue of RMB 21.91 billion, up 87.7 % YoY. Cash on hand at year‑end was RMB 47.66 billion, providing a strong liquidity base for continued investment in AI and manufacturing.
For the first quarter of 2026, XPeng guided deliveries of 61,000 to 66,000 units, a 29.8 % to 35.1 % decline YoY, and revenue of RMB 12.20 billion to RMB 13.28 billion, down 16.0 % to 22.8 % YoY. Management cited softening demand in China and the rollback of government subsidies as key factors behind the weaker outlook, signaling caution amid a challenging market environment.
"In the fourth quarter of 2025, XPENG’s gross margin reached 21.3 %, reaching a new record high, with net profit hitting RMB 0.38 billion. By leveraging a business model driven by technological leadership, we have established a profitability path that sets us apart from traditional automakers," said Dr. Hongdi Brian Gu, Vice Chairman and Co‑President. "In 2025, XPENG delivered a total of 429,445 vehicles, representing a 125.9 % year‑over‑year increase. We continue to push the boundaries of Physical AI, accelerating the mass production and commercialization of product innovations as we expand our global footprint," added Xiaopeng He, Chairman and CEO.
Investors reacted cautiously to the earnings release. While the first‑quarter profit and record margins were welcomed, the sharp decline in Q1 2026 guidance—particularly the projected drop in deliveries and revenue—dampened enthusiasm, reflecting concerns about near‑term demand and the broader macro‑environment in China.
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