Xpeng reports revenue of around €9.6 billion
As early as the beginning of January, it was revealed that Xpeng delivered 429,445 battery-electric vehicles in the past year, representing a 126% increase compared to 2024. With the now-released, though still unaudited, financial data for the fourth quarter and the full year 2025, the financial impact of this growth is clear: revenue from vehicle sales rose by 90.8% to 68.38 billion yuan (€8.6 billion). That also means that the average price per vehicle sold dropped to nearly 160,000 yuan (€20,000), likely due to the market introduction of the affordable Mona M03 model.
Revenue from services and other income amounted to 8.34 billion yuan (€1 billion) in the 2025 financial year, marking a 65.6% increase. According to Xpeng, this rise is attributed to higher revenues from CO₂ certificate trading, parts and accessory sales, and technical research and development (R&D) services for another car manufacturer.
The latter likely refers to its key partner Volkswagen, which holds a 5% stake in Xpeng and has recently collaborated with the company to develop the VW ID.UNYX 08 based on the Xpeng G9, as well as the China architecture CEA.
Service business delivers high margins
A closer look at the details reveals that this secondary business acts as a key profitability driver. The margin for services and other income stood at 68.2%, while the margin for vehicle sales was only 12.8%. Across both segments, the gross margin was 18.9%.
It is important to note that a positive margin does not yet equate to profit; it merely indicates that a product can be sold for more than its production costs. However, this does not account for additional cost blocks such as research and development, administration, sales, depreciation, interest, and taxes.
When examining the bottom line, Xpeng’s net loss for 2025 amounted to 1.14 billion yuan (€143 million), compared to 5.79 billion yuan (€725 million) in 2024. Xpeng has thus succeeded in reducing its net loss by around 80%. The Guangzhou-based company also sees itself on track to reach the break-even point: like its rival Nio, Xpeng achieved its first net profit in the fourth quarter of 2025, amounting to 380 million yuan (€47.5 million).
Heavy investment in AI, including autonomous driving
“In the fourth quarter of 2025, XPENG’s gross margin reached 21.3%, reaching a new record high, with net profit hitting 0.38 billion yuan. By leveraging a business model driven by technological leadership, we have established a profitability path that sets us apart from traditional automakers,” said Brian Hongdi Gu, Vice Chairman and Co-President of Xpeng. “Our cash on hand of RMB47.66 billion at 2025 year-end provides a solid foundation for our unwavering investment in Physical AI R&D.”
CEO He Xiaopeng also emphasises the importance of physical AI for the company’s future. This involves the fusion of artificial intelligence (software) with physical machines (hardware) that operate in the real world—in Xpeng’s case, these include battery-electric vehicles, robots, and the ‘flying cars’ of its subsidiary Aridge.
“I believe Xpeng is at a historical inflection point for Physical AI applications,” said He Xiaopeng. “Our goal is not only to grow our global market share of AI-defined vehicles and bridge the gap from L2+ assisted driving to L4 autonomous driving, but also to bring our second-generation VLA model to international markets and achieve scale production of advanced humanoid robots.”
The abbreviation VLA stands for Vision-Language-Action, referring to an AI model that can not only understand text like ChatGPT but also interpret video data in real time and translate it directly into physical actions (steering, braking, evading). In other words, it forms the foundation for an autonomous driving system.
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