On the evening of August 24, XPENG-W (SEHK: 09868) released a semi-annual report that fell short of expectations. For the first half of the year, the company's revenue declined 3.8% year-on-year to 32.78 billion yuan, while it recorded a net loss of 3.12 billion yuan, widening by approximately 173.4% compared to the same period last year. This translates to an average daily loss of over 17 million yuan.
During the first half, XPENG delivered a total of 166,000 vehicles, a year-on-year decrease of 15.8%. The automotive gross margin also slipped by 0.5 percentage points year-on-year to 12.1%. However, amid these performance pressures, XPENG simultaneously announced a major development: its humanoid robot business completed an initial financing round exceeding 900 million U.S. dollars, achieving a post-investment valuation of over 6.3 billion U.S. dollars. This sets a new record for the largest single-round private equity financing in China's embodied intelligence industry. Based on XPENG Group's closing market capitalization on the Hong Kong Stock Exchange that day, the robot business's valuation exceeds half of the company's total market value.
Additionally, He Xiaopeng announced during the earnings call that while continuing as CEO of XPENG Group, he will also assume the role of CEO for the robotics business. According to XPENG, its humanoid robot IRON is planned to enter mass production by the end of the year, starting with commercial applications in XPENG's stores and parks. The robot is scheduled for official launch and delivery in both Chinese and international markets by 2027. According to Tianyancha data, XPENG Group listed on the Hong Kong Stock Exchange in 2021. As of the close on August 26, XPENG shares were priced at 46.68 Hong Kong dollars per share, with a total market value of approximately 89.4 billion Hong Kong dollars, having shrunk by more than half from last year's peak.
Revenue and net profit both decline in H1, deliveries fall 15.8% year-on-year
According to the latest financial report from XPENG Group, the company achieved revenue of 32.78 billion yuan in the first half of this year, down 3.8% year-on-year. Its net loss reached 3.12 billion yuan, expanding by 173.4%, while the non-GAAP net loss was 2.92 billion yuan, widening by 260.4%. In the second quarter alone, XPENG recorded revenue of 19.74 billion yuan, an 8% year-on-year increase and a 51.5% quarter-on-quarter rise. The quarterly net loss stood at 1.34 billion yuan, up 179.9% year-on-year, with a non-GAAP net loss of 1.24 billion yuan, expanding 221.1%.
The sluggish performance of the automotive business was the primary driver behind XPENG's revenue decline. In the first half, XPENG delivered 166,000 vehicles, down 15.8% year-on-year, and its automotive gross margin fell 0.5 percentage points to 12.1%. Automotive sales revenue decreased 10.3% year-on-year to 28.05 billion yuan, mainly due to lower delivery volumes. However, viewed by quarter, the decline in H1 deliveries was concentrated in Q1, with Q2 essentially stabilizing. In the second quarter, XPENG delivered 103,000 vehicles, up 0.1% year-on-year and surging 64.8% quarter-on-quarter, generating automotive sales revenue of 17.05 billion yuan, a 1% year-on-year increase and 55% quarter-on-quarter growth.
Notably, while the automotive gross margin dipped slightly, XPENG's overall gross margin improved, rising 4.1 percentage points year-on-year to 20.6%. This was primarily attributed to the company's services and other business segments, whose first-half revenue surged 67.1% year-on-year to 4.73 billion yuan, with gross margin jumping approximately 11 percentage points to 71.4%. According to the 2025 financial report, XPENG's services and other businesses mainly include technology R&D services, services included in sales contracts, after-sales services, and supercharging services. XPENG explained that the strong growth in this segment was driven by two factors: increased revenue from technology R&D services provided to an automobile manufacturer after achieving certain key milestones under an agreement, and higher revenue from parts and accessories sales as cumulative vehicle sales grew.
Leida Finance noted that the automobile manufacturer XPENG referred to is likely Volkswagen. As early as 2023, XPENG and Volkswagen established a long-term strategic cooperation focused on product development and technological innovation, jointly creating two pure electric models. At that time, Volkswagen also announced an investment of approximately 700 million U.S. dollars in XPENG, acquiring about 4.99% of its equity and securing an observer seat on the board. In July 2024, the two parties signed a strategic cooperation joint development agreement, clarifying that XPENG would jointly develop the CEA electronic and electrical architecture for Volkswagen's CMP and MEB platforms produced in China. Last August, XPENG and Volkswagen Group signed an agreement to expand their strategic cooperation on electronic and electrical architecture technology. Through this agreement, the jointly developed industry-leading EEA will be integrated not only into Volkswagen's pure electric vehicle platforms in China but also deployed across its fuel and plug-in hybrid vehicle platforms in the Chinese market. In mid-March this year, the first jointly developed model between Volkswagen and XPENG, the ID. UNYX, officially entered production at Volkswagen Anhui as planned, taking only 24 months from signing the joint development technical cooperation agreement to mass production. The second jointly developed model is also expected to hit the market within this year.
Leverage ratio rises sharply, Q4 targets 60,000 monthly deliveries
Despite the improvement in overall gross margin during the first half, substantial operating expenses continue to exert significant profitability pressure on XPENG. The financial report shows that XPENG's total operating expenses reached 9.78 billion yuan in H1, up 28.7% year-on-year. Among these, R&D expenses alone hit 5.82 billion yuan, a 39% year-on-year increase. Meanwhile, selling, general, and administrative expenses totaled 4.38 billion yuan, up 6.5%, bringing combined expenses to over 10 billion yuan. XPENG attributed the rise in R&D spending to increased costs associated with new models and AI-related technology development as the company expands its product portfolio to support future growth. The increase in SG&A expenses was mainly due to higher marketing and advertising costs.
XPENG's cash reserves are also being depleted rapidly. As of the end of H1, the company held 40.48 billion yuan in cash, down 7.18 billion yuan from 47.66 billion yuan at the end of 2025. Net cash used in operating activities during H1 was approximately 11.72 billion yuan, compared to net cash generated from operations of 7.64 billion yuan in the same period last year. Furthermore, XPENG's leverage ratio climbed significantly, reaching 73.2% at the end of H1, up 31.4 percentage points from the end of 2025.
In contrast, overseas markets emerged as one of the few bright spots in this semi-annual report. In the first half, XPENG's overseas revenue reached 8.23 billion yuan, up 62.2% year-on-year, with its revenue share rising from 14.9% in the same period last year to 25.1%. During the same period, revenue from mainland China totaled 24.55 billion yuan, down 15.4% year-on-year. The latest data shows that in July this year, XPENG delivered 38,000 vehicles, up 3.6% year-on-year but down 5.5% month-on-month. Looking ahead to the third quarter, XPENG expects to deliver between 115,000 and 121,000 vehicles, representing a year-on-year change of approximately -0.87% to 4.3%. It projects total revenue of 21.7 billion to 23.4 billion yuan, up approximately 6.47% to 14.81% year-on-year.
During the earnings call on August 24, XPENG Group Chairman and CEO He Xiaopeng stated that with the launch of four new SUV models, the company's sales are expected to increase significantly in the fourth quarter, with the potential to challenge a monthly delivery target exceeding 60,000 vehicles.
Robotics business secures 900 million USD funding, post-investment valuation exceeds 'half of XPENG'
While the automotive business faces short-term headwinds, XPENG is aggressively increasing its bet on the robotics sector. Looking back to last November's XPENG Tech Day, the company's next-generation humanoid robot IRON made a striking debut, frequently trending on social media thanks to its lifelike "catwalk." This contributed to XPENG's Hong Kong market value briefly surging to over 200 billion Hong Kong dollars, temporarily surpassing traditional automotive giant Geely Automobile. This robot serves as a key component of XPENG Group's physical AI strategy, positioned as a highly anthropomorphic, AI-driven, high-end humanoid robot with top-tier safety standards, aiming to become the next-generation general-purpose humanoid robot platform.
On August 24, XPENG Group announced that its humanoid robot business entity, Pengxing, had completed an initial financing round of over 900 million U.S. dollars, with a post-investment valuation exceeding 6.3 billion U.S. dollars (approximately 42.3 billion yuan). This sets a new record for single-round private equity financing in China's embodied intelligence industry. Leida Finance learned that the proceeds from this round will primarily be used for software and hardware R&D of XPENG's robotics business, physical AI model training and iteration, high-quality data collection, construction of full-chain mass production facilities, and global commercial expansion. Based on XPENG Group's closing market value of approximately 91.4 billion Hong Kong dollars on that day, the robotics business's valuation already exceeds half of the company's total market value.
The financing round was led by IDG Capital, with participation from Gaorong Ventures, along with strategic investment support from Tencent and Alibaba. Upon completion of this financing round, XPENG Group will continue to hold controlling interest in the robotics business, which will remain consolidated in the group's financial statements. According to Jiemian News, this 900 million U.S. dollar financing also includes clear risk-sharing arrangements. External investors contributed 600 million U.S. dollars, XPENG Group contributed 200 million U.S. dollars, and entities controlled by He Xiaopeng and XPENG Vice President Gu Hongdi collectively contributed 100 million U.S. dollars. Under the transaction terms, if the robotics company fails to complete a qualified IPO within seven years, investors can demand a buyback.
At the earnings call, He Xiaopeng also announced that while serving as CEO of XPENG Group, he would personally take on the additional role of CEO of the robotics business. XPENG has its own strategic considerations for independently raising funds for the robotics business. The company believes that financing allows the robotics business's value to be independently reflected based on its own development trajectory, attracting specialized robotics capital distinct from automotive investors. Additionally, the funding provides capital for humanoid robot R&D and commercialization, reducing reliance on XPENG Group's own balance sheet. The participation of strategic investors such as Tencent and Alibaba is also expected to help expand application scenarios, customers, and industrial resources for the robotics division.
According to XPENG, IRON is planned to enter mass production by the end of 2026, initially deployed in XPENG's stores and parks. It is scheduled for official launch in 2027, with deliveries targeting retail and service industry customers in both China and overseas markets. Monthly production capacity will be increased to thousands of units based on demand. He Xiaopeng also projected that the full lifecycle revenue and gross profit per IRON unit, including hardware sales, software fees, and AI model upgrade revenue, will significantly exceed XPENG's current average vehicle price and gross profit per car. Whether XPENG's robotics business can successfully access the capital markets in the future and provide profit support to its parent company remains to be seen, and Leida Finance will continue to monitor developments.