XPeng Group, after its rebranding, has released its first half-year financial report. In the first half of the year, the company generated revenue of 32.78 billion yuan, a year-on-year decrease of 3.8%. Its net loss expanded to 3.12 billion yuan, widening by 173.4% year-on-year, while the non-GAAP net loss reached 2.92 billion yuan, a year-on-year increase of 260.4%.

According to the company's announcement, it delivered a total of 166,000 vehicles in the first half, down 15.8% year-on-year. However, looking solely at the second quarter, there are some bright spots. The company showed marginal improvements in operations, with revenue, gross margin, and delivery numbers all trending upward on a quarter-over-quarter basis.

Amid intensifying competition in the vehicle business, XPeng Group has built a physical AI business matrix covering AI vehicles, Robotaxi, and humanoid robots. Notably, its humanoid robot IRON secured over $900 million in its first-round financing, achieving a post-investment valuation of 42.3 billion yuan, which is regarded as its second growth curve. However, over 85% of the group's current revenue still comes from automobile sales, while physical AI-related businesses contribute minimal revenue at this stage. Moreover, continuously increasing R&D investment has been eroding profits.

On one hand, the vehicle business needs to catch up with peers; on the other hand, high-valuation new ventures like humanoid robots are still in the early commercialization phase. Whether XPeng Group's physical AI narrative can come to fruition remains a key focus for market watchers.

Declining Deliveries, Falling Revenue, and Broadening Net Losses in H1

On April 1, 2026, XPeng Motors officially changed its Chinese stock short name from "XPeng Motors" to "XPeng Group," setting the stage for its diversified business layout. On August 24, the newly rebranded XPeng Group published its interim results. In the first half, the company achieved revenue of 32.78 billion yuan, down 3.84% year-on-year, while net losses widened by 173.35% to 3.121 billion yuan.

The direct cause of the widening losses is pressure on the sales front. XPeng Group's vehicle deliveries in the first half of 2026 stood at 166,000 units, a decline of 15.8% year-on-year. In comparison with other new-energy vehicle makers, NIO led the pack with first-half revenue of 57.67 billion yuan, while XPeng Group's revenue of under 33 billion yuan placed it fifth. Li Auto posted the largest loss among the group, with XPeng Group following behind. On the delivery front, Leapmotor surpassed 350,000 vehicles, while NIO and Li Auto both exceeded 190,000; XPeng Group's less than 170,000 units ranked fifth.

While vehicle sales faced headwinds, XPeng's "services and other income" became one of the few highlights in the financial report. In the first half, this segment generated 4.73 billion yuan in revenue, surging 67.1% year-on-year, mainly driven by technology R&D services and component sales provided to Volkswagen Group.

In addition to sluggish sales, R&D spending also weighed on profitability. First-half R&D expenses amounted to 5.82 billion yuan, up 39.0% year-on-year, with investments directed mainly toward new models, physical AI, and humanoid robots, further straining profit margins.

On a quarterly basis, compared with the disappointing first half, XPeng Group showed signs of recovery in the second quarter of 2026. Total revenue reached 19.74 billion yuan, up 51.5% quarter-over-quarter and 8.0% year-on-year. In terms of profitability, the group's comprehensive gross margin improved by 3.4 percentage points year-on-year to 20.7% in Q2. Delivery volumes reached approximately 103,300 vehicles, a quarter-over-quarter increase of 64.8%.

According to media reports, XPeng Group currently sells more than ten models, covering sedans, SUVs, and MPVs. After a slow first-quarter delivery season, the 2026 MONA M03 and GX were launched in the second quarter. Notably, the MONA series is XPeng Group's sales pillar, contributing 40% of total sales in 2025.

Founder He Xiaopeng said, "The consecutive success of GX and MONA L03 gives us greater confidence in upcoming models, converting our advantages in intelligence and design into more best-selling products and stronger brand momentum."

For the third quarter of 2026, XPeng Group expects vehicle deliveries to range between 115,000 and 121,000 units, up approximately 11.33% to 17.14% quarter-over-quarter. However, media reports indicate that the market consensus for XPeng's deliveries is around 147,000 vehicles, implying a gap of roughly 18% to 22% between the company's guidance and market expectations. Some analysts suggest supply chain constraints or production ramp-up challenges could be the bottleneck.

Overall, XPeng Group's first-half performance was weak, but the second quarter showed signs of improvement. Whether third-quarter deliveries can beat expectations will determine the company's near-term performance trajectory.

Chasing Physical AI: XPeng Group's New Narrative

XPeng Group's revenue structure remains highly dependent on vehicles. As of the first half of 2026, automobile sales accounted for as much as 85.56% of total revenue, making it the company's core business. Facing intensifying competition and margin pressure in China's new-energy vehicle sector, the group has set a strategic goal of evolving into a physical AI enterprise.

The core concept of physical AI is enabling AI to understand the real world and execute actions within it. Its business applications are divided into three main areas: AI vehicles, Robotaxi, and humanoid robots.

In the AI vehicle segment, XPeng Group is developing its Turing AI autonomous driving system, covering the entire stack from cloud-based large models to onboard models, Turing AI chips, and the Canghai chassis, all developed in-house. Regarding Robotaxi, He Xiaopeng indicated that the pre-production Robotaxi equipped with the second-generation VLA has completed over 2,000 internal test orders in Guangzhou, successfully running through the full passenger-carrying demonstration operation process. The company aims to achieve driverless passenger operations next year.

Humanoid robots are regarded by outsiders as XPeng Group's second growth curve. According to the company's official website, the XPeng AI Robot IRON is dedicated to creating the most human-like humanoid robot. Guosen Securities research reports that XPeng IRON is a key vehicle for XPeng Group's physical AI strategy, with the goal of becoming a next-generation general-purpose humanoid robot platform supporting a wide range of applications and self-improvement in the real world.

XPeng's robotics business has built a full-stack in-house R&D technology system with deep hardware-software coupling, covering the robot's body, brain, cerebellum, data, and infrastructure. Furthermore, the robotics business has independently designed and developed an AI-native hardware platform and all core components — including chips, controllers, motion modules, and dexterous hands — and leverages its mature smart EV R&D and manufacturing ecosystem to achieve automotive-grade quality and mass-production delivery capabilities.

Notably, on August 24 this year, XPeng Group announced that its robotics business had raised over $900 million in its first round of financing, achieving a post-investment valuation exceeding $6.3 billion (approximately 42.3 billion yuan), setting a new record for single-round private equity financing in China's embodied intelligence industry. As of the September 7 market close, XPeng Group's total market capitalization was 75.4 billion yuan, meaning the robotics business valuation accounts for more than half of the company's total market value.

Following the completion of this financing round, XPeng Group will continue to hold a controlling stake in the robotics business, which will remain consolidated in the company's financial statements. Some observers believe that this financing round provides clear market-based valuation for XPeng's robotics business, and external funding will support the long-term investment in full-stack self-developed physical AI, while improving long-term incentive mechanisms for executives and core talent.

He Xiaopeng aims to build XPeng Group into one of China's most valuable humanoid robot companies and become a globally leading physical AI company, driving large-scale application and commercialization of advanced general-purpose humanoid robots and autonomous driving technology in both domestic and overseas markets. To mobilize group resources to accelerate the robotics business, He Xiaopeng has personally served as CEO of the robotics business since June. The XPeng IRON is expected to officially launch in 2027, beginning scaled deliveries to external customers in retail and service industry scenarios, across China and overseas.

XPeng Group's bet on physical AI is essentially a response to the red-ocean competition in the vehicle sector, seeking a second growth curve. However, the business still faces multiple practical constraints on the road to implementation.

First, the humanoid robot industry as a whole is still in its early stages, with commercial pathways not yet fully established. Comparable listed companies like UBTech continue to report sustained losses, and commercial scenarios require long-term cultivation and refinement.

Second, from a financial perspective, the new businesses are still in the investment phase with limited revenue contribution. Currently, XPeng Group's non-automotive revenue accounts for less than 15%, and both humanoid robots and Robotaxi have not entered large-scale commercialization, making it difficult for them to offset the performance pressure from the vehicle business in the short term.

Finally, full-stack self-development brings substantial R&D expenses. The multi-track layout of physical AI continues to push R&D costs higher, further testing the company's cash flow and profitability resilience — especially given that the vehicle business has yet to achieve profitability.

The rebranding from XPeng Motors to XPeng Group reflects the company's strategic ambition to move beyond single-dimensional vehicle manufacturing. The humanoid robot segment has attracted substantial financing and a 42.3 billion yuan valuation, fully opening up the physical AI narrative. However, a high valuation does not equate to delivered results. Going forward, XPeng Group must demonstrate whether its vehicle product portfolio can sustain volume growth and improve profitability, while also proving that humanoid robots and Robotaxi can meet their timelines for product launch and commercial scenario development. Whether the physical AI story can transform from a valuation narrative into tangible revenue still requires sustained verification through future financial reports.