The electric vehicle maker’s Monday was never going to be quiet. XPeng had scheduled its second-quarter earnings release, and the market was bracing for scrutiny. What investors didn’t anticipate was the double blow that landed: a regulatory recall of 264,842 vehicles in China over concerns about the emergency door release mechanism, paired with financial results that missed analyst expectations on nearly every meaningful metric.
The recall, reported by Reuters, taps into a broader wave of safety actions sweeping across Chinese manufacturers — and it arrives at a moment when XPeng can least afford the distraction. The company’s net loss attributable to shareholders ballooned to 1.34 billion yuan in the second quarter, a dramatic widening from the 480 million yuan recorded in the same period a year earlier. Revenue, meanwhile, came in at 19.74 billion yuan, up 8 percent year over year and a robust 51.5 percent quarter over quarter, helped by deliveries of 103,295 vehicles. The gross margin held at 20.7 percent, just above the psychologically important 20 percent threshold, with the vehicle margin at 12.1 percent.
But the headline numbers flatter a business that is paying heavily for growth. The adjusted loss per ADS of 1.29 yuan came in well below the FactSet consensus estimate of 0.91 yuan, and the guidance for the third quarter did little to reassure. XPeng is projecting revenue between 21.7 billion and 23.4 billion yuan — a range that sits conspicuously under the 26.69 billion yuan analysts had penciled in. The delivery outlook of 115,000 to 121,000 vehicles represents sequential improvement, yet it still falls short of what the Street had priced.
That gap between expectation and guidance helps explain why the U.S.-listed shares dropped 7 percent to $11.40 on Monday, with further weakness in pre-market trading. Barclays responded the same day by trimming its price target to $14.00 from $15.00, maintaining an Underweight rating and citing the weak third-quarter delivery forecast as the primary reason.
The Robot Card
Amid the gloom, XPeng did unveil one bright spot — though its relevance to the core business remains an open question. The company’s robotics division closed its first financing round at more than $900 million, led by IDG Capital with strategic participation from Tencent and Alibaba. The post-money valuation of roughly $6.2 billion to $6.3 billion for a unit that has yet to ship a single commercial robot speaks to the conviction of some heavyweight backers.
The humanoid robot, named IRON, is being developed with 76 degrees of freedom and three Turing AI chips, with mass production slated for late 2026 and external deliveries not expected until 2027. It’s a compelling narrative — but one that operates on a different timeline than the quarterly earnings cycle investors are currently punishing.
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The stock’s recovery on Tuesday and Wednesday — a 4.2 percent gain that left shares at €9.95 — looks less like a vote of confidence in the vehicle business and more like a recalibration of the robotics option value against the margin pressure in the auto segment. The shares remain roughly 32 percent below their 200-day moving average and 59 percent beneath the 52-week high of €24.40 reached in November. Over the past 30 days, the stock has shed 11 percent, and it’s down 45 percent year to date.
International Momentum Offers a Counterpoint
The recall and the earnings miss risk obscuring some genuine operational progress. XPeng reported that overseas deliveries exceeded 20,000 units in the second quarter for the first time, a year-over-year jump of 81 percent, with international markets contributing more than a quarter of first-half revenue. The services division also showed life, climbing 94 percent to 2.70 billion yuan, driven by technical development work for another automaker.
The company is positioning the L03 model — which management says has generated historically high order volumes at launch — to push international deliveries above 40,000 units per quarter starting in the fourth quarter. CEO He Xiaopeng also confirmed that the G9L SUV will officially launch in China in September, with pre-sales having begun on August 11. On the software front, the second generation of the VLA driver-assistance model is set to receive its first major update in China from late August.
A Story Pulled in Two Directions
What makes XPeng’s current situation so difficult to parse is the widening gap between its two narratives. The robotics division is raising capital at a valuation that would be the envy of many standalone startups, backed by some of China’s most prominent tech investors. But the automobile business — the entity that actually generates revenue today — is bleeding more with each passing quarter, and its forward guidance suggests management sees no near-term relief.
The recall adds an operational and reputational cost that is difficult to quantify but impossible to ignore. For investors, the confluence of a safety action and disappointing earnings on the same day complicates the task of assessing the core business in isolation. The robotics story, however real and well-funded, remains future music whose commercial payoff won’t be measurable until at least 2027. Until the vehicle segment can demonstrate more convincing operating leverage, the market’s skepticism seems likely to persist — no matter how many billions the robot arm of the business can attract.
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