XPeng sinks 7% on weak Q4 results, dim China EV outlook
First-ever quarterly profit overshadowed by revenue miss and guidance signaling market slowdown
XPeng shares fell 7% to $17.84 on Friday after the Chinese electric vehicle maker reported fourth-quarter revenue that missed analyst expectations, overshadowing the company's first-ever quarterly profit and painting a bleak picture for demand in China's maturing EV market.
The Guangzhou-based manufacturer reported quarterly revenue of RMB 22.25 billion ($3.18 billion), representing a 38.2% year-over-year increase but falling short of the $3.32 billion analyst consensus forecast, according to Benzinga. The revenue miss reflected weaker-than-expected vehicle deliveries of 116,249 units in the quarter, which missed the lower end of XPeng's own guidance range of 125,000 to 132,000 vehicles despite growing 27% from the prior year.
Yet the headline figure marked a significant milestone for XPeng, which achieved its first quarterly net profit of RMB 380 million ($50 million) on a GAAP basis, swinging from a RMB 1.33 billion loss in the same period a year earlier. Non-GAAP net profit reached RMB 510 million ($70 million), according to CNEVPost. The company also improved its gross margin to a record 21.3% from 14.4% in the fourth quarter of 2024, with vehicle margins rising to 13% from 10% a year earlier, driven by cost reductions and an improved product mix.
However, investors focused on the company's guidance for the first quarter of 2026, which pointed to a significant slowdown. XPeng projected vehicle deliveries between 61,000 and 66,000 units, representing a year-over-year decline of approximately 30% to 35%. Revenue guidance of RMB 12.20 billion to RMB 13.28 billion ($1.74 billion to $1.90 billion) also fell short of analyst expectations of RMB 14.81 billion, indicating a year-over-year decline of 16% to 23%.
The weak outlook reflects broader challenges facing China's electric vehicle market, which has cooled following the phase-out of government subsidies and amid intensifying price wars among domestic competitors. Battery-electric vehicle deliveries in China fell 20.4% in January, while plug-in hybrid sales dropped 35.6% compared with the same month last year, according to industry data.
"XPeng's weak first-quarter revenue outlook, attributed to slowing Chinese EV demand, overshadowed its first-ever quarterly profit at the end of 2025," Benzinga reported. Chinese automakers are bracing for weaker demand as subsidy adjustments impact sales, with overall passenger vehicle sales down 25% year-on-year in February and new energy vehicles falling even more sharply.
From a technical perspective, XPeng's stock remains under pressure, trading below both its 50-day moving average of $18.62 and 200-day moving average of $20.14. The company's market capitalization stands at approximately $18.6 billion, significantly below its 52-week high of $28.23.
Despite the near-term headwinds, analyst sentiment remains broadly positive. The average analyst price target of $26.54 represents roughly 49% upside from current levels, with 23 analysts collectively rating the stock 6 strong buy, 17 buy, 4 hold, and 1 strong sell, according to market data. The company maintains a solid cash position of $6.81 billion as of December 31, 2025, providing financial flexibility for investments in new models and international expansion.
XPeng aims to deliver between 550,000 and 600,000 vehicles globally in 2026, representing growth of 28% to 40% compared with 2025. The company plans to launch four new models this year, including the flagship six-seat full-size XPeng GX SUV, and intends to double its overseas deliveries while increasing international revenue contribution to more than 20%.
For now, however, investors remain focused on the immediate challenges facing China's EV market, where increased competition from established domestic players like BYD and new entrants including Xiaomi is squeezing margins and forcing manufacturers to choose between profitability and market share. The coming quarters will test whether XPeng's first profit was the beginning of a sustainable turnaround or merely a temporary bright spot in an increasingly difficult operating environment.