XPENG (NYSE:XPEV) executives highlighted a year of sharp delivery growth, margin expansion, and what they described as major progress in autonomous driving and “physical AI” during the company’s fourth-quarter and full-year 2025 earnings call. Management also provided first-quarter 2026 delivery and revenue guidance and discussed plans to broaden its product lineup, expand overseas operations, and scale initiatives including Robotaxi and humanoid robots.
2025 results: deliveries up 126%, first quarterly profit in Q4
Chairman and CEO He Xiaopeng said the company delivered 42,945 vehicles in 2025, up 126% year-over-year. He pointed to several product milestones, including Mona M03 becoming the best-selling battery electric sedan in the CNY 100,000–200,000 segment and P7+ ranking first among pure electric sedans in the CNY 150,000–200,000 segment. He also said the company’s Kunpeng super extended-range EV X9 entered mass production, marking the start of what he called a “one vehicle, dual energy era.”
In the fourth quarter, finance VP James Wu reported total revenue of RMB 22.25 billion, up 38.2% year-over-year and up 9.2% sequentially. Vehicle sales revenue was RMB 19.07 billion, while services and other revenue rose to RMB 3.18 billion, up 121.9% year-over-year. Wu attributed the services and other growth primarily to technical R&D services provided to Volkswagen Group tied to milestone achievements, parts and accessories sales, and carbon credit trading.
Gross margin in Q4 was 21.3%, up from 14.4% a year earlier and 20.1% in Q3. Vehicle margin was 13.0%, roughly flat sequentially and up from 10.0% in Q4 2024, which Wu said reflected ongoing cost reductions and an improved product mix.
Wu said R&D expense rose to RMB 2.87 billion (up 43.2% year-over-year), driven by development of new models and technologies. SG&A expense increased to RMB 2.79 billion (up 22.7% year-over-year), primarily from higher franchise store commissions tied to sales volume and new model launches, as well as higher marketing and advertising.
The company posted its first quarterly profit, with Q4 net profit of RMB 0.38 billion, compared with a net loss of RMB 1.33 billion a year earlier. Operating loss narrowed to RMB 0.04 billion from RMB 1.56 billion in Q4 2024.
VLA 2.0 rollout and autonomy roadmap
He framed 2026 as a pivotal period for XPeng’s autonomous driving strategy, saying the company’s VLA 2.0 passed a “physical Turing test” for autonomous driving in early March 2026, where passengers “can hardly distinguish if it’s a human or AI who’s driving the car.” He reiterated the company’s expectation that “fully autonomous driving can be expected to come in the next 1–3 years.”
In response to Morgan Stanley questions, He said XPeng expects at least one major over-the-air (OTA) update each quarter. For a Q2 OTA, he said the system’s coverage will expand beyond major highways and city roads to include smaller roads, parking lots, and campus/community environments—moving from navigation-enabled public road autonomy toward “no navigation, no rules” internal-road scenarios. He also said the company plans to expand edge model parameters to roughly the 20-billion level and aims to improve “mileage per takeover” by 5–10 times on the current base this year, alongside more cockpit integration and multi-language localization support.
He said VLA 2.0 began a gradual rollout to users “starting yesterday,” and that after early March promotion, daily test drives doubled month-over-month and the mix of Ultra and Ultra SE trims more than doubled. He added that management expects broader rollout and ongoing upgrades to improve conversion, increase sales volume, and lift average selling prices, while also increasing user engagement.
Robotaxi: Guangzhou road testing approval, pilot operations planned
He said XPeng’s Robotaxi vehicles powered by VLA 2.0 have received road testing approval in Guangzhou and are conducting ongoing L4 public road tests. He said the company plans to begin pilot passenger operations in the second half of the year to validate technology, customer experience, and the business model.
On timing, He said that regulatory steps—progressing from testing licenses to operations with safety drivers and then without—remain a key gating factor. He said XPeng expects to begin passenger operations with a safety driver in the second half of this year and hopes to operate without a safety driver by early next year. He added the company intends to open its Robotaxi system to partners in China and globally over time.
In-house Turing SoC and external collaboration
He said the VLA 2.0 performance is supported by XPeng’s in-house Turing AI system-on-chip (SoC) alongside its proprietary foundation model and compiler optimizations. He said the plan was for the chip to achieve three times effective compute versus peers, but the company ultimately achieved a 10-times improvement in effective compute. He also said the Turing SoC has shipped more than 200,000 units since entering mass production and being deployed in vehicles in Q3 of last year.
Starting in Q2 of this year, He said all XPeng models, including Max trims, will transition to the in-house Turing SoC. He set a full-year shipment target of roughly 1 million chips and said Volkswagen is the first external customer for both the Turing SoC and VLA 2.0, adding that the company is open to working with more automakers, AI companies, and Tier 1 suppliers.
Product expansion, overseas targets, and humanoid robot plans
He said XPeng plans to launch four new models in 2026 spanning large to compact vehicles, designed for global markets and built on dual-energy platforms, with autonomous driving capabilities evolving from L2+ toward L4. He also said that in Q2 2026, the company plans to start pre-orders for a flagship six-seat full-size SUV called the XPeng GX, which will include steer-by-wire and rear-wheel steering and be the first model designed to support L4-level hardware and software.
On international operations, He said overseas deliveries nearly doubled to 45,000 units in 2025 and contributed over 15% of total revenue. For 2026, management set a goal to double overseas deliveries again and lift overseas revenue contribution to over 20%. He also said XPeng aims to reach 680 overseas sales and service stores in 2026, doubling from the end of 2025, and expand its self-operated ultra-fast charging network to 10 overseas markets.
President Brian Gu said Europe is XPeng’s largest overseas region, representing about 50% of overseas volume, and noted encouraging growth in markets including Germany, France, and Great Britain. He also highlighted Southeast Asia as an important growth market, citing Thailand, Indonesia, and Malaysia, and pointed to emerging opportunities in the Middle East, Central Asia, and Latin America. Gu said XPeng intends to launch extended-range products to select overseas markets by the end of the year, and plans to introduce VLA 2.0 overseas alongside the expected DCAS regulation framework, with the system potentially available in some international markets by early next year.
He also discussed XPeng’s humanoid robot, IRON, which he said is targeted to enter mass production by the end of 2026 and would initially be deployed in commercial scenarios such as reception and guidance at XPeng stores and campuses. He said the company began construction of a humanoid robot mass production base in Guangzhou and set a target of monthly production capacity of more than 1,000 units by the end of the year.
For near-term outlook, He guided first-quarter 2026 deliveries to 61,000–66,000 units and revenue to RMB 12.2 billion–RMB 13.2 billion. He said March deliveries are expected to rise 69% to 101% sequentially. He added that XPeng invested RMB 9.5 billion in R&D in 2025, including RMB 4.5 billion for AI, and said physical AI-related R&D investment would increase this year, with all such investments booked as R&D rather than capital expenditures.
About XPENG (NYSE:XPEV)
XPENG Inc (NYSE: XPEV) is a China-based developer and manufacturer of smart electric vehicles. The company designs, engineers and sells battery-electric sedans and sport-utility vehicles along with related software and services. Founded in 2014, XPENG positions itself as a technology-driven automaker with a focus on vehicle connectivity, software-defined features and advanced driver assistance systems.
Product offerings center on passenger EVs spanning compact crossovers and midsize sedans, supported by in-house software platforms and over-the-air update capabilities.
