By Jiahui Huang
XPeng turned a quarterly profit for the first time, driven by fast-growing sales and strong margins, making it the latest Chinese electric-vehicle maker to become profitable despite fierce competition in the world's largest auto market.
It has been a momentous year for the Guangzhou-based company, which has notched successive quarters of record sales and is venturing into robotaxis and humanoid robots as it seeks to transform into a physical AI company. The automaker recently unveiled its VLA 2.0 autonomous-driving system, powered by its own chips, aiming for global deliveries in 2027. It also plans to launch three robotaxi models this year for ride-hailing services, with trials slated to begin in China later in 2026.
XPeng's fourth-quarter profit means all three of China's emerging EV brands are now profitable. NIO posted its first-ever quarterly profit last week on record sales. Meanwhile, Li Auto, the first in the group to become profitable, recorded a slim profit amid slumping sales, underscoring how cutthroat the industry has become as carmakers compete to introduce breakthrough technology.
XPeng said Friday that its net profit was 383.2 million yuan, equivalent to $55.5 million, compared with net loss of 1.33 billion yuan a year earlier. That far exceeded the 200.0 million yuan loss estimated by analysts in a Visible Alpha poll.
Revenue rose 38% to 22.25 billion yuan, topping analysts' estimate of 21.65 billion yuan. The automaker delivered 116,249 vehicles in the final quarter of 2025, a new record, though the figure fell short of its guidance of 125,000 to 132,000 units.
Its gross margin improved to 21.3% in the quarter, up from 14.4% a year ago and 20.1% in the third quarter.
For the full year, XPeng's net loss narrowed significantly to 1.14 billion yuan from 5.79 billion yuan as revenue surged 88% to 76.72 billion yuan.
The company said its 2025 gross margin climbed to 18.9% from 14.3% in 2024, thanks to continued cost reductions and a better product mix.
The automaker forecast first-quarter deliveries of between 61,000 and 66,000 vehicles, down 30% to 35% from a year earlier. It expects revenue to decline 16% to 23%, reaching 12.20 billion yuan to 13.28 billion yuan.
The beginning of the year, when the Lunar New Year falls, is typically a slow season for China's auto industry. By contrast, the fourth quarter is usually the strongest period as automakers push to meet annual delivery targets.
Analysts say the year-end consumer rush to beat changes to government incentives for EV purchases could also mean first-quarter sales this time are particularly soft.
One potential tailwind for XPeng is the progress in its collaboration with Volkswagen. The German carmaker earlier this month said it had begun mass production of its first model developed jointly with XPeng. The ID. UNYX 08, an all-electric full-size SUV equipped with fast-charging tech and level 2 self-driving, is set to enter the Chinese market in the first half of 2026.
XPeng's American depositary receipts fell 4.5% in premarket trading.
Write to Jiahui Huang at jiahui.huang@wsj.com
(END) Dow Jones Newswires
March 20, 2026 07:36 ET (11:36 GMT)
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