Summary of Key Points
Xpeng Motors achieved its first quarterly profit in the fourth quarter of 2025 (net profit of 380 million yuan), but then lost 1.78 billion yuan in the first quarter of 2026 and another 1.34 billion yuan in the second quarter, making its profitability seem like a fleeting success. Meanwhile, Xpeng has heavily invested in its humanoid robotics business, having just completed a financing round of over 900 million US dollars (with a post-investment valuation of 6.3 billion US dollars). However, the robotics business is still in the red, and its commercial prospects remain uncertain. Xpeng faces a dual challenge: its automotive business has unstable profitability and relies on non-core businesses (such as technical services and carbon credits) to maintain its gross margin; the robotics business requires significant long-term investment with a long payback period, yet Xpeng must compete in this field to avoid falling behind.
I. Automotive Profitability: A Precarious Balance
Xpeng's profit in the fourth quarter of 2025 was more of an "accident" than a sign of stable profitability. The 380 million yuan in profit came mainly from "other income" (primarily government subsidies), while the core operations still resulted in a loss of 40 million yuan. In the first quarter of 2026, sales decreased by 46%, and additional revenues from technical services, carbon credits, and subsidies disappeared, leading to a loss of 1.78 billion yuan. Although sales recovered in the second quarter, combined research and development and sales management expenses amounted to 5.4 billion yuan, consuming all of the 4.08 billion yuan in gross profit, resulting in another loss of 1.34 billion yuan.
In simple terms: It's like running a bubble tea shop that occasionally makes a profit from selling accessories (such as cups), but the main business of selling bubble tea itself is not profitable. Once the sales of accessories drop, the shop immediately loses money. Xpeng's main automotive business has not yet become profitable, and its profits are merely sustained by temporary gains from "side businesses," indicating a very fragile balance.
II. The "Illusion" of High Gross Margin
Xpeng's overall gross margin of 20.7% in the second quarter may seem impressive, but upon closer inspection:
- Automotive Business: Revenue was 17.05 billion yuan, with a gross margin of only 12.1% (very low profit margin from selling cars).
- Services and Others: Revenue was only 2.7 billion yuan (less than 20% of total revenue), but the gross margin was 75.1%, contributing nearly half of the total gross profit.
This high gross margin comes from technical services (such as providing technology to other companies) and carbon credits (selling carbon emission allowances), both of which are unstable—technical services are not available every quarter, and carbon credit prices fluctuate. In reality: Xpeng is still making low or even losing money from selling cars, and the high gross margin is merely supported by its "side businesses," which does not reflect the strength of its core business.
III. Betting on Robotics: Not a Spur of the Moment, but a Necessity to Stay Ahead
Why does Xpeng focus on robotics when its automotive business is just starting to show profitability?
1. Technical Advantages: Autonomous driving and robotics share many common technologies, such as environmental perception, chips, and batteries, with a 85% overlap in the supply chain (for example, the same parts suppliers are used for both cars and robots, potentially reducing costs).
2. Industry Competition: Xiaomi has already entered the robotics market, Li Auto has restarted its robotics research and development, and NIO has invested in a humanoid intelligence company, with Leapmotor also having plans. If Xpeng waits until its automotive business is stable, the market will likely be saturated by then.
3. Long-Term Vision: He Xiaopeng aims to transform Xpeng from a car company into a "physical AI company," with robotics being a key component of this vision.
In simple terms: It's like smartphone manufacturers starting to produce smartwatches early on, not because they make a lot of money now, but to avoid being left behind in the future. Robotics could become the next "smart terminal," and Xpeng cannot afford to miss this opportunity.
IV. The Robotics Business: Promising, but Far from Profitable
The robotics business faces two major challenges:
1. Technical Challenges: Autonomous driving operates in fixed scenarios (roads, parking lots), while robots need to be used in homes and factories for tasks like lifting objects and cooking, which are much more complex. Even Elon Musk has said that developing humanoid robots is more difficult than Model X.
2. Slow Commercialization: The humanoid robotics market is still very small. YuShu Technology produced 18,000 units in 2025, generating only 1.7 billion yuan in revenue, compared to Xpeng's 68.4 billion yuan from car sales. Goldman Sachs predicts that global shipments will only reach 76,000 units in 2027 and 500,000 units in 2032, indicating slow growth.
More importantly, Xpeng's robotics business is still in the red: it lost 87 million yuan in 2024, 369 million yuan in 2025, and had a net debt of 447 million yuan as of March 2026. The recent financing of 900 million yuan included 200 million yuan contributed by Xpeng itself and 100 million yuan by its management, with only 600 million yuan coming from external investors—this means Xpeng is essentially "blood transfusing itself" and seeking help from partners, under significant pressure.
V. Financial Pressure: Declining Cash Reserves and Continuous Expenses
Xpeng currently has 40.48 billion yuan in cash reserves, which seems substantial, but it was 47.66 billion yuan half a year ago, a decrease of 718 million yuan. Research and development expenses have remained at 2.9 billion yuan for two consecutive quarters, funding new car models, autonomous driving, and the mass production of robots.
While the financing has alleviated immediate pressures, there are "repurchase clauses": if Xpeng does not go public within 7 years, investors can demand the redemption of their shares. This means Xpeng must get its robotics business ready for listing within 7 years or repay the funds.
Current Situation: The automotive business needs stable profitability to support its operations, while the robotics business requires continuous investment to stay ahead in the market. Xpeng is like managing two businesses simultaneously—one showing signs of profitability but still unstable, and the other losing money but still requiring investment. Any mistake could lead to problems in both areas.
Conclusion
Xpeng's current situation is one of "surviving in the short term while betting on the future." It must first stabilize its automotive business and reduce its dependence on non-core revenues to truly make money from car sales. The robotics business needs to find a breakthrough for commercialization before running out of funds (for example, by first using robots within its own stores and campuses before gradually expanding the market). It took Xpeng 11 years to achieve profitability last time; how long will it take this time? No one knows, but the time available is running out.