Official image of an XPENG P7+ electric sedan parked beside a reflecting pool

news August 25, 2026

XPENG's Q2 Revenue Rebounds 52%, but EV Deliveries Stay Flat

XPENG reported RMB19.74 billion in Q2 revenue and a 20.7% gross margin, but deliveries barely grew year over year and its net loss widened.

By Marcus Holloway

XPENG’s second-quarter numbers tell two very different stories about the Chinese EV maker.

Revenue climbed 51.5 percent from the first quarter to RMB19.74 billion (US$2.91 billion), while gross margin reached 20.7 percent. But the company delivered 103,295 vehicles, just 0.1 percent more than it did a year earlier, and its net loss widened sharply year over year to RMB1.34 billion (US$200 million).

In other words, XPENG is generating more money from roughly the same annual vehicle volume, but it has not yet turned stronger margins and higher services revenue into a bottom-line profit.

That makes the company’s second-quarter 2026 results more nuanced than either the revenue rebound or the wider loss suggests on its own.

Revenue Rebounded Faster Than Deliveries

Vehicle-sales revenue reached RMB17.05 billion (US$2.51 billion), up 55 percent from the first quarter and 1 percent from the same period last year. The sequential jump followed a weak first quarter in which XPENG delivered 62,682 vehicles, versus 103,295 in Q2.

The year-over-year comparison is less dramatic. Second-quarter deliveries increased by only 114 vehicles from the 103,181 recorded in Q2 2025. Vehicle revenue still rose 1 percent, suggesting the company held onto slightly more revenue per delivered vehicle despite relentless price competition in China.

XPENG’s 12.1-percent vehicle margin was unchanged from the first quarter but down from 14.3 percent a year earlier. The company attributed that annual decline to a product-generation transition, a reminder that replacing and repositioning models can temporarily increase costs even when overall revenue is moving in the right direction.

Services and other revenue did much more of the margin lifting. It nearly doubled year over year to RMB2.70 billion (US$400 million), helped by technical research-and-development services supplied to another automaker and by parts and accessories sales. That segment posted a 75.1-percent margin, pulling XPENG’s total gross margin above 20 percent even as the margin on vehicle sales slipped.

Why The Loss Widened

XPENG’s net loss of RMB1.34 billion was substantially larger than the RMB480 million loss recorded a year earlier, although it improved from RMB1.78 billion in the first quarter.

Spending explains much of the year-over-year pressure. Research and development expense rose 32.1 percent to RMB2.91 billion (US$430 million) as XPENG invested in new models and AI-related technology. Selling, general and administrative expense increased 15.2 percent to RMB2.50 billion (US$370 million), with higher marketing, advertising and dealer commissions among the reasons cited.

Those investments may support future products, but they are cash outlays today. XPENG ended June with a cash position of RMB40.48 billion (US$5.97 billion), down from RMB42.09 billion at the end of March.

The balance is familiar across the EV industry: scale the product lineup and software stack fast enough to stay competitive, while trying to keep spending from outrunning gross-profit growth.

XPENG Expects A Stronger Third Quarter

Management expects to deliver 115,000 to 121,000 vehicles in the third quarter. That would represent an increase of roughly 11 to 17 percent from Q2, but the range runs from a slight year-over-year decline to growth of about 4.3 percent.

Revenue guidance is stronger. XPENG forecasts RMB21.7 billion to RMB23.4 billion, equal to approximately 6.5 to 14.8 percent annual growth and about 10 to 18.5 percent growth from Q2.

Those are company forecasts, not completed results. Still, they show what XPENG needs from its newer products: more revenue and deliveries without giving back the margin gains that have pushed its overall gross margin past 20 percent.

The product pipeline includes the MONA L03, which XPENG launched globally in Munich in July. The company said it delivered 38,027 vehicles in July, bringing its total for the first seven months of 2026 to 204,004. That monthly pace would be enough to reach the lower end of Q3 guidance if it holds through August and September.

The Bigger Story Is No Longer Volume Alone

XPENG has spent years proving it can design technologically ambitious EVs and produce them at meaningful scale. By June 30, its retail network covered 257 cities through 740 stores, while its self-operated charging network had expanded to 3,780 stations, including 2,720 ultra-fast-charging sites.

The next test is making that scale economically durable.

Q2 offered real progress: revenue recovered quickly from the first quarter, services income grew, and total gross margin remained above 20 percent. It also exposed the unfinished work. Vehicle margin is lower than it was a year ago, R&D and selling expenses are rising, and the company is still losing money despite delivering more than 100,000 vehicles in a quarter.

For global automakers watching China’s EV market, that combination matters. Chinese brands are not competing only on sticker price anymore; they are building charging networks, software platforms and overseas product plans at the same time. Yet even one of the better-known players is showing how expensive that race remains.

XPENG’s Q3 guidance points to another step up in volume. Whether that growth can arrive with a smaller loss will be the more important number.