XPeng's total gross margin rose to 20.7% while vehicle margin fell to 12.1%, and its Q3 delivery guide brackets zero growth

by Clara Borresen · August 24, 2026

Senior Earnings Analyst, Earnings Dispatch

XPeng released second-quarter results before the U.S. open on Monday, and the two margin figures in the release move in opposite directions. Total gross margin improved. The margin on the cars themselves did not.

According to the company's Aug. 24 release, total revenues were RMB19.74 billion (US$2.91 billion), up 8.0% from a year earlier and up 51.5% from the first quarter. Vehicle sales revenue was RMB17.05 billion (US$2.51 billion), up just 1.0% year over year but 55.0% sequentially. Services and others revenue was RMB2.70 billion (US$0.40 billion), up 93.9% year over year and 32.6% sequentially.

Deliveries tell the same story about the automotive business. XPeng delivered 103,295 vehicles in the quarter. RTTNews, reporting on the release on Aug. 24, put the year-ago figure at 103,181 units, a year-over-year increase of 0.1%. The sequential jump was large, but the annual comparison was effectively flat.

The margin split follows from that mix. Gross margin for the quarter was 20.7%, up 3.4 percentage points from a year earlier and up 0.1 points sequentially. Vehicle margin was 12.1%, down 2.2 percentage points year over year and unchanged from the first quarter. In other words, the entire year-over-year improvement in the consolidated margin came from the services and others line, which nearly doubled, rather than from the cars. Readers who take the 20.7% figure as a statement about vehicle economics will read it backwards.

Hongdi Brian Gu, vice chairman and co-president, said in the release: "During the second quarter of 2026, our operations remained resilient despite industry-wide cost pressures. Driven by breakthroughs in our premiumization and globalization efforts, our gross margin continued to exceed 20%." Chairman and chief executive Xiaopeng He said: "The back-to-back success of the GX and MONA L03 gives us greater confidence in our upcoming new models, as we translate our leading edge in smart technologies and design into more blockbuster products and stronger brand momentum."

Below the gross line, spending grew faster than revenue. Research and development expenses were RMB2.91 billion (US$0.43 billion), up 32.1% year over year and up 0.3% sequentially. Selling, general and administrative expenses were RMB2.50 billion (US$0.37 billion), up 15.2% year over year and up 32.5% sequentially. Loss from operations was RMB1.14 billion (US$0.17 billion) on a GAAP basis and RMB1.04 billion (US$0.15 billion) on a non-GAAP basis.

The GAAP net loss was RMB1.34 billion (US$0.20 billion) and the non-GAAP net loss was RMB1.24 billion (US$0.18 billion). RTTNews, reporting on the release on Aug. 24, put the year-ago GAAP net loss at RMB0.48 billion and the year-ago non-GAAP net loss at RMB0.39 billion, so the loss widened materially against the same quarter a year earlier on both accounting bases. The gap between the GAAP and non-GAAP loss is small in absolute terms; share-based compensation in the quarter was RMB147.4 million, which is roughly a tenth of the reported net loss.

Per-ADS figures require care about units. The GAAP net loss per ADS was RMB1.40 (US$0.21) and the non-GAAP net loss per ADS was RMB1.29 (US$0.19); per ordinary share, the GAAP loss was RMB0.70 (US$0.10) and the non-GAAP loss was RMB0.65 (US$0.10). Investing.com, publishing on the results on Aug. 24, described the quarter as missing a consensus loss of 0.29 per share against a reported 1.29, and a revenue consensus of 20.57 billion against a reported 19.74 billion. It printed those figures with dollar signs and does not name the compiler behind the estimates. The comparisons only cohere in renminbi terms: the company's own dollar translation of the non-GAAP per-ADS loss is US$0.19 and of revenue is US$2.91 billion. Any beat-or-miss arithmetic here has to be done in one currency and on one accounting basis, and on the renminbi reading the reported figure sits well outside the estimate.

The guidance is where the automotive question gets sharpest. For the third quarter of 2026 the company expects deliveries of 115,000 to 121,000 vehicles, which it describes as a year-over-year change of approximately negative 0.87% to positive 4.30% and a sequential increase of approximately 11.33% to 17.14%. Total revenues are expected to be between RMB21.7 billion and RMB23.4 billion, a year-over-year increase of approximately 6.47% to 14.81%. The revenue range therefore grows faster than the delivery range at every point, which is consistent with the services line continuing to carry the mix rather than with a change in per-vehicle pricing.

Investing.com reported that the shares fell 4.22% in premarket trading, to US$11.68 from a prior close of US$12.19, and placed the stock near the bottom of a 52-week range of US$11.49 to US$28.24. Cash, cash equivalents, restricted cash and short- and long-term investments stood at RMB40.48 billion (US$5.97 billion) as of June 30, 2026. On the call, according to Investing.com's transcript, vice chairman Brian Gu said the hardware margin in the company's humanoid robot programme is already much higher than in the automotive business and that profitability there could arrive faster than in cars once volume ramps, while chief executive He Xiaopeng said the Iron robot's lifetime revenue and gross-profit contribution would be substantially higher than the current average selling price and gross profit per vehicle. Neither claim is reflected in the guidance ranges the company actually issued for the September quarter.