XPeng Stock Drops on Disappointing Earnings. It Continues to Chase Tesla.

Coming into Monday trading, XPeng’s U.S.-listed ADRs were down about 40% this year. (Kevin Frayer/Getty Images)

Key Points

• XPeng reported a second-quarter per-share loss of 10 cents on sales of $2.9 billion, beating Wall Street expectations for a 20-cent loss.
• The Chinese electric-vehicle maker expects to deliver between 115,000 and 121,000 cars in the third quarter.
• XPeng announced that its Dogotix robot subsidiary is raising about $900 million in a deal that values the unit at roughly $6.3 billion.

Everyone seems to have the same idea as Tesla these days. EV growth is slowing, so it’s time to invest in physical AI applications such as robo-taxis and robots.

The latest example comes from Chinese EV maker XPeng . Monday, it reported a second-quarter per-share loss of 10 cents from sales of $2.9 billion. Wall Street was looking for a 20-cent loss on $3 billion in sales.

Vehicle gross profit margins were 12.1%, flat with the first quarter, and down from 14.3% for the second quarter of 2025.

Earnings look OK, but sales are light. XPeng’s U.S.-listed American depositary receipts, or ADRs, were down 3.4% in premarket trading at $11.78, while S&P 500 and Dow Jones Industrial Average futures were down 0.3% and 0.1%, respectively.

Coming into Monday trading, ADRs were down 40% this year. Falling sales are one factor weighing on investor sentiment. Through July, XPeng sold about 204,000 cars, down from about 234,00o over the same span of 2025.

For the third quarter, XPeng expects to deliver between 115,000 and 121,000 cars. It delivered 116,000 in the third quarter of 2025. Sales are expected to be about $3.35 billion. Wall Street currently projects $3.9 billion.

The Chinese car market has been difficult this year, characterized by brutal competition among existing EV makers. “During the second quarter of 2026, our operations remained resilient despite industry-wide cost pressures,” said co-president Dr. Hongdi Brian Gu in a news release. “I expect the mass production and commercialization of physical AI technologies to accelerate over the coming year, generating meaningful gross profit growth to support our continued R&D investment in physical AI.”

XPeng, like Tesla, is pivoting away from EVs into physical AI applications, including robots. On Monday, XPeng also announced that its Dogotix robot subsidiary is raising some $900 million for robotics. The deal values Dogotix at about $6.3 billion.

Robot valuations are rising. Recently, China robot maker Unitree completed its IPO, raising about $900 million. That company is now valued at roughly $40 billion, according to FactSet. A year ago, that valuation was closer to $2 billion.

Write to Al Root at allen.root@barrons.com.

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