Key Takeaways
- The Chinese EV manufacturer recorded a Q1 2026 net loss of 1.78 billion yuan ($262.6 million), significantly exceeding analyst projections of 811.9 million yuan.
- Quarterly revenue declined 18% to 13.03 billion yuan amid a roughly one-third reduction in vehicle deliveries compared to the prior year.
- A major highlight: gross margin expanded to 20.6% from 15.6% year-over-year, demonstrating operational efficiency gains.
- Despite missing earnings expectations, XPEV shares climbed 3.8% to $17.07 in premarket sessions.
- The company projects Q2 deliveries between 100,000 and 106,000 units with revenue forecasted at 19.60–20.80 billion yuan.
XPeng (XPEV) kicked off 2026 with challenging first-quarter results, reporting expanded losses and diminished revenue, yet investors looked beyond the headline numbers — driving shares higher in early trading thanks to profitability improvements and optimistic forward guidance.
The electric vehicle manufacturer based in Guangzhou saw its quarterly net loss balloon to 1.78 billion yuan ($262.6 million) during Q1, expanding from a 664 million yuan loss in the same period last year. Sales declined 18% to reach 13.03 billion yuan. These results fell short of consensus projections — Wall Street analysts had anticipated a loss of 811.9 million yuan alongside revenue of 13.55 billion yuan.
Despite underperforming expectations, XPEV shares advanced 3.8% to $17.07 during Thursday’s premarket session.
The automaker delivered 62,682 vehicles during the quarter, a substantial decline from the 94,008 units delivered in Q1 2025 — representing approximately a one-third contraction. This downturn ended a streak of consecutive quarterly records and mirrored broader headwinds across China’s electric vehicle market, where total new car sales contracted roughly 7% during Q1 2026.
Profitability Metrics Paint a Brighter Picture
Although revenue and earnings disappointed, the company’s gross margin expanded significantly to 20.6%, up from 15.6% in the year-ago period. Vehicle-specific margins rose to 12.1%, boosted by operational cost reductions and an enhanced product portfolio.
This margin expansion likely explains why the stock avoided a selloff following the report. The metric demonstrates that XPeng is extracting greater profitability from each vehicle sold, despite lower overall volumes.
Meanwhile, Li Auto’s shares dropped 3.4% to $15.25 after the company also released disappointing quarterly results on Thursday. Li reported a per-share loss of 15 cents on $3.3 billion in revenue, compared to analyst estimates calling for a 13 cent loss on $3.2 billion. While deliveries inched higher to 95,142 vehicles, revenue contracted on a year-over-year basis.
Second Quarter Outlook Suggests Momentum Shift
Looking ahead to Q2, XPeng forecasts deliveries ranging from 100,000 to 106,000 vehicles — essentially matching year-ago levels — alongside projected revenue of 19.60 to 20.80 billion yuan. This guidance indicates substantial sequential growth from Q1’s subdued performance.
By comparison, Li’s Q2 delivery forecast was more conservative, targeting approximately 97,500 vehicles, representing a roughly 12% year-over-year decline.
When combined with NIO, which released its results in a separate announcement, the three major Chinese EV manufacturers anticipate delivering approximately 313,000 combined units in Q2 — reflecting 9% year-over-year growth and outpacing the 5% expansion recorded in Q1. This represents a cautiously encouraging indicator for the sector overall.
Heading into Thursday’s earnings release, XPEV had declined 19% year-to-date, which may have contributed to the stock’s resilient response to the disappointing results.
Separately, Tesla delivered approximately 139,000 vehicles in China through April, down 15% from the previous year, with TSLA shares edging down 1.6% to $433.51 in premarket trading.
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