After years of losses, Chinese manufacturer Xpeng finally posted a green first quarter. Between price wars and the end of aid, this fragile respite could quickly close.
On paper, it ticked all the boxes of the manufacturer condemned to burn cash for years. Ultra competitive market, price war, massive investments in technology: the Chinese Xpengspecialist in
electric carhas long lost money in each financial year. And yet, at the turn of 2026, a line has finally changed color on its accounts.
After years in the red, the brand has just reached a symbolic milestone: for the first time since its creation,
it announces a profitable quarter. A turnaround based on a surge in sales, better cost control and new revenues in services and technology, but which remains very exposed to the Chinese economic climate. And there, when we look closely at the figures and forecasts for 2026, the balance seems much less comfortable than it appears at first glance.
Xpeng goes green: a first historic net profit
The turning point occurred in the fourth quarter of 2025. Over this period, Xpeng released a net profit 380 million yuan, or around 48 million eurosaccording to its financial results. A year earlier, in the fourth quarter of 2024, the same manufacturer still posted a loss of 1.33 billion yuan, the equivalent of 167 million euros. The contrast is spectacular.
This shift is based on a clear improvement in profitability. The gross margin reached 21.3% in the fourth quarter of 2025, up significantly year-on-year. At the same time, deliveries have exploded: from 141,601 vehicles in 2023 to 429,445 in 2025, an increase of 203%. Over the whole of 2025, turnover jumped by almost 90% compared to 2024. The company, however, remains in deficit for the year: the net loss is limited to 1.14 billion yuan, approximately 143 million euros, compared to 5.79 billion yuan, or 728 million euros, in 2024. The trajectory therefore remains negative, but the loss has been divided by more than four in one year, a pace of recovery rarely seen in the sector.
Profitability still fragile, under pressure in China and Europe
Behind this spectacular rise, several levers appear in the accounts. The explosion in volumes allows for economies of scale and better utilization of factories, which reduces the unit cost of cars. The brand is also talking about a more aggressive pricing strategy on its domestic market, facing intense local competition. Added to this are efforts on industrial costs and the rise of ancillary activities, such as services and technology. Revenues linked to these services, but also to technological licenses granted to other manufacturers, increased significantly in 2025.
According to public data, licensing agreements have already generated more than 1.7 billion yuan in revenue, or around 215 million euros, over the year. Enough to attract the attention of partners like Volkswagen, with whom Xpeng has signed an industrial partnership. The Jefferies bank, cited by Investing.com, did not hesitate to describe Xpeng as the bank’s “preferred manufacturer”.
2026 prospects under pressure despite an offensive in Europe
For 2026, the picture is much less linear. In China, the end of certain public subsidies for electric vehicles is weighing on demand. The price war between local players compresses margins, even for those who are just starting to taste profitability.
Xpeng is targeting between 61,000 and 66,000 deliveries in the first quarter of 2026, which would represent a drop of around 30% compared to the same period a year earlier. A decline which reminds us to the extent to which the financial balance just achieved can quickly be called into question if volumes decline or if discounts multiply.
In Europe, however, the brand is advancing its pawns. Models destined for our continent are assembled at Magna Steyr in Graz, Austria, which avoids European customs duties. In France, Xpeng has already relied on a network of around 70 dealerships in 2025, for just over 3,300 registrations and an average network profitability close to 0.5%. The stated objective is to reach around a hundred points of sale and around 6,000 registrations in 2026. For French motorists, this translates into an additional offer of electric SUVs and sedans, with prices that are often aggressive compared to historic brands, in a context where each new profitable player makes the competition even keener.
