XPeng Shares Fall After Q2 Miss as Robotics Unit Raises More Than $900 Million

XPeng (NYSE:XPEV) shares moved lower in U.S. pre-market trading on Monday after the Chinese electric vehicle manufacturer reported second-quarter revenue and earnings below analyst expectations. The company also announced a major financing round for its robotics division, valuing the business at more than $6.3 billion.

XPeng reported a second-quarter loss of RMB1.29 per share, considerably wider than the RMB0.29 loss expected by analysts. Revenue reached RMB19.74 billion, an increase of 8% from a year earlier and 51.5% from the previous quarter, but below the consensus forecast of RMB20.57 billion.

The shares were down 3.5% by 06:49 ET (10:49 GMT).

Vehicle Revenue Rises as Gross Margin Improves

Vehicle sales generated RMB17.05 billion in revenue during the quarter, representing growth of 1.0% year on year and 55.0% quarter on quarter.

XPeng’s overall gross margin strengthened to 20.7%, compared with 17.3% in the same period last year and 20.6% in the first quarter.

Vehicle margin, however, declined to 12.1% from 14.3% a year earlier and was unchanged from the preceding quarter.

Total vehicle deliveries reached 103,295 during the period, remaining broadly unchanged compared with the second quarter of last year.

XPeng Forecasts Up to 121,000 Deliveries for Q3

For the third quarter, XPeng expects to deliver between 115,000 and 121,000 vehicles.

That range would represent a year-on-year change of approximately negative 0.87% at the lower end to positive 4.30% at the upper end.

The company forecast third-quarter revenue of between RMB21.7 billion and RMB23.4 billion, implying annual growth of approximately 6.47% to 14.81%.

The guidance suggests XPeng expects sequential momentum to continue, although the relatively modest year-on-year delivery growth highlights the competitive conditions facing China’s electric vehicle market.

XPeng Robotics Business Raises More Than $900 Million

Alongside its quarterly results, XPeng announced that its robotics operation had secured more than $900 million through a new financing round.

The transaction values the robotics unit at more than $6.3 billion on a post-money basis and represents a significant expansion of XPeng’s ambitions beyond electric vehicles.

IDG Capital led the financing, with Gaorong Ventures also participating. Tencent and Alibaba joined the round as strategic investors.

According to XPeng, the transaction represents the largest single private funding round completed to date within China’s embodied AI industry.

Funding Targets AI Development and Global Expansion

XPeng will retain controlling ownership of the robotics business, which will continue to be consolidated within the group’s financial statements.

Proceeds from the financing will be directed towards software and hardware research and development, physical AI model training, data generation and the construction of mass-production capabilities.

Part of the capital will also support the robotics unit’s international commercial expansion as XPeng seeks to develop another growth platform alongside its core electric vehicle operations.

For NYSE:XPEV investors, the second-quarter update presents a mixed picture. The earnings and revenue misses pressured the shares in pre-market trading, while improving gross margins and the substantial valuation secured for the robotics business highlight areas of potential longer-term growth.

XPeng stock price