4Q25 Revenue: $3.18B, +43.9% YoY, miss estimates by $10M
4Q25 Non-GAAP EPS: $0.07, beat estimates by $0.08
1Q26 Guidance: Expect sales of RMB12.2B to RMB13.3B, missing analyst estimates of RMB15.7B.
Comment: XPeng Inc. delivered a mixed performance, with strong profitability in the most recent quarter offset by a weak near-term outlook. In the fourth quarter, the company reported revenue of RMB 22.25bn, exceeding expectations and growing 30% YoY, driven by stronger sales of higher-margin models such as the P7 sedan. Notably, XPeng achieved its first-ever quarterly net profit of RMB 383mn, marking a significant improvement from losses in the prior year and indicating better cost control and operating leverage. However, this positive momentum was overshadowed by disappointing first-quarter guidance, with revenue expected at RMB 12.2-13.3bn, below market estimates and vehicle deliveries projected to decline 30%-35% YoY. The weak outlook reflects intensifying price competition in China’s electric vehicle market, the rollback of government subsidies and broader demand softness, as evidenced by declining industry registrations. In the short term, growth is likely to remain pressured by domestic price wars and weaker consumer demand. At the same time, the company is repositioning itself beyond traditional EV manufacturing toward a broader “physical AI” strategy, investing heavily in autonomous driving, robotaxis, humanoid robots, and flying vehicles. While these initiatives could drive significant long-term value creation, they also introduce execution risk and require substantial investment. Overall, XPeng’s near-term performance is tied to cyclical industry pressures but longer-term upside remains dependent on its ability to successfully scale its AI-driven mobility ecosystem. 1Q26 recommended trading range: $15 to $18. Neutral Outlook.
