Key Takeaways
- XPeng’s Q1 2026 net loss reached 1.78 billion yuan ($262.6 million), exceeding analyst forecasts of 811.9 million yuan.
- The company’s revenue declined 18% year-over-year to 13.03 billion yuan amid falling vehicle deliveries.
- A significant highlight was the gross margin expansion to 20.6%, compared to 15.6% in the prior year period.
- Despite earnings disappointments, XPEV stock gained 3.8% in premarket sessions, reaching $17.07.
- The company projects Q2 deliveries between 100,000 and 106,000 units with revenue guidance of 19.60–20.80 billion yuan.
XPeng (XPEV) kicked off 2026 with challenging first-quarter results that included expanded losses and declining revenues, yet investors pushed shares higher in premarket trading, drawn by enhanced profitability metrics and optimistic forward-looking projections.
The Chinese electric vehicle manufacturer reported a Q1 net loss of 1.78 billion yuan ($262.6 million), significantly larger than the 664 million yuan loss recorded in the same quarter last year. Revenues contracted 18% to 13.03 billion yuan. These numbers fell short of Wall Street projections, which anticipated a loss of 811.9 million yuan alongside revenue of 13.55 billion yuan.
Despite the earnings shortfall, XPEV shares advanced 3.8% to $17.07 during Thursday’s premarket session.
The company delivered 62,682 vehicles during the quarter, representing a decline from 94,008 units in Q1 2025—approximately a one-third reduction. This downturn ended a streak of record-breaking quarters and mirrored broader challenges facing China’s electric vehicle industry, where overall new vehicle sales decreased roughly 7% during the first quarter of 2026.
Profitability Metrics Show Positive Momentum
Whough headline numbers disappointed, XPeng’s gross margin expanded to 20.6%, up from 15.6% in the year-ago period. Vehicle margins specifically rose to 12.1%, fueled by operational efficiencies and an enhanced product portfolio.
This margin expansion likely prevented a stock selloff following the earnings announcement. The improvement demonstrates that despite lower sales volumes, XPeng is extracting greater profitability from each unit sold.
Meanwhile, Li Auto’s shares declined 3.4% to $15.25 after the company also reported Thursday with similar earnings misses. Li posted a 15-cent per-share loss on $3.3 billion in revenue, versus analyst expectations of a 13-cent loss on $3.2 billion. While Li’s deliveries increased modestly to 95,142 vehicles, revenue fell on a year-over-year basis.
Second Quarter Outlook Signals Rebound
Looking ahead, XPeng forecasts Q2 deliveries ranging from 100,000 to 106,000 vehicles—essentially flat compared to last year—with revenue projected between 19.60 and 20.80 billion yuan. This guidance represents a substantial sequential improvement over Q1’s weaker performance.
By contrast, Li’s Q2 delivery forecast appeared less optimistic, targeting approximately 97,500 vehicles, representing a roughly 12% year-over-year decline.
When combined with NIO, which issued its own separate report, the three major Chinese EV manufacturers anticipate delivering approximately 313,000 combined vehicles in Q2—a 9% year-over-year increase and an improvement over Q1’s 5% growth rate. This represents a cautiously positive indicator for the sector overall.
Heading into Thursday’s earnings release, XPEV stock had already declined 19% year-to-date, which may have tempered negative reactions to the quarterly miss.
For comparison, Tesla sold approximately 139,000 vehicles in China through April, down 15% year-over-year, with TSLA stock slipping 1.6% in premarket trading to $433.51.
