XPeng (XPEV) Stock Climbs 4% Despite Wider Q1 Loss and Revenue Decline

Key Takeaways

• XPeng’s Q1 2026 net loss reached 1.78 billion yuan ($262.6 million), substantially exceeding analyst projections of 811.9 million yuan.
• First-quarter revenue declined 18% to 13.03 billion yuan amid vehicle deliveries falling approximately one-third year-over-year.
• Gross margin expanded to 20.6% from 15.6% in the prior-year period, representing a significant operational improvement.
• Despite the earnings shortfall, XPeng shares advanced 3.8% to $17.07 in premarket sessions.
• Second-quarter projections indicate 100,000–106,000 vehicle deliveries with revenue expectations of 19.60–20.80 billion yuan.

XPeng (XPEV) kicked off 2026 with challenging first-quarter results that included a wider loss and significant revenue contraction, yet investors gravitated toward strengthening profitability metrics and forward-looking projections — pushing shares higher before the opening bell.

The Chinese electric vehicle manufacturer headquartered in Guangzhou recorded a net loss of 1.78 billion yuan ($262.6 million) during the first quarter, expanding from a 664 million yuan deficit in the same period last year. First-quarter revenue contracted 18% to 13.03 billion yuan. These results fell short of Street consensus — market watchers had anticipated a loss of 811.9 million yuan against revenue of 13.55 billion yuan.

Shares of XPEV climbed 3.8% to $17.07 during Thursday’s premarket session, defying the earnings disappointment.

XPeng Inc., XPEV

The automaker delivered 62,682 vehicles during the quarter, representing a decline from 94,008 units in Q1 2025 — marking roughly a 33% year-over-year decrease. This downturn ended a string of record-setting quarters and mirrored broader headwinds affecting China’s electric vehicle market, where aggregate new vehicle sales declined approximately 7% in Q1 2026.

Profitability Metrics Show Promise

Despite headline numbers falling short of expectations, gross margin expanded to 20.6%, advancing from 15.6% in the year-ago quarter. Vehicle-specific margins improved to 12.1%, benefiting from operational efficiencies and an enhanced product portfolio.

This profitability enhancement likely explains why shares avoided a selloff following the report. The data demonstrates that while unit volume contracted, XPeng is extracting greater profitability from each vehicle transaction.

Li Auto, which released earnings on the same day, experienced a 3.4% decline to $15.25 after similarly underperforming forecasts. Li reported a per-share deficit of 15 cents against revenue of $3.3 billion, compared to analyst estimates calling for a 13 cent loss on $3.2 billion in sales. Deliveries increased marginally to 95,142 vehicles, though revenue decreased year-over-year.

Second-Quarter Projections Signal Rebound

Looking toward Q2, XPeng forecasts deliveries between 100,000 and 106,000 vehicles — essentially unchanged from the prior year — alongside revenue projections of 19.60 to 20.80 billion yuan. This outlook represents substantial sequential momentum compared to Q1’s softer performance.

Li’s second-quarter delivery forecast proved less optimistic, targeting approximately 97,500 vehicles, representing a roughly 12% year-over-year decline.

Considering results from NIO, which reported earnings independently, the trio of Chinese EV manufacturers collectively anticipates approximately 313,000 vehicle deliveries in Q2 — reflecting 9% year-over-year growth and an acceleration from the 5% expansion observed in Q1. This provides 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 market’s measured response to the quarterly shortfall.

Through the end of April, Tesla recorded approximately 139,000 vehicle sales in China, declining 15% year-over-year, with TSLA shares down 1.6% in premarket trading at $433.51.

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