XPeng, the Chinese electric vehicle startup backed by the Volkswagen Group, ended the first half of 2026 with losses triple those of the previous year. Data from elespanol motor show the company posted a net loss of 3.121 billion yuan (398.2 million euros), as sales fell and government subsidies were cut. Spending on research and development and financial costs also rose sharply.
Despite its widening losses, XPeng increased gross profit to 6.766 billion yuan (863 million euros), up 20.2% year-on-year. The gain was largely driven by an 8.6% reduction in the total cost of sales, which offset some of the pressure on revenue. But the company sold 165,977 vehicles in the first six months of the year, down 15.8% from the same period in 2025. Total revenue fell 3.8% to 32.777 billion yuan (4.182 billion euros), while vehicle sales revenue declined 10.2% year-on-year. Revenue from service operations moved in the opposite direction, jumping 67% to 4.731 billion yuan (603.6 million euros).
As a prolonged price war weighs on the Chinese market, XPeng has increasingly turned to exports to offset weakness at home. Revenue from China fell 15.4% to 24.55 billion yuan (3.1316 billion euros), while international sales climbed 74% to 8.226 billion yuan (1.0494 billion euros). Overseas markets now account for a quarter of XPeng’s total revenue, up ten percentage points from the first half of 2025. The shift reflects a broader push by Chinese automakers to expand abroad. Geely, for example, raised its export ambitions after acquiring a major stake in Ford España, as detailed in this recent report.
Government support has also declined. Subsidies received by XPeng fell 59.1% year-on-year to 320 million yuan (40.8 million euros), reflecting lower sales and tighter state incentives. Meanwhile, R&D expenses rose 39% to 5.8214 billion yuan (742.5 million euros), while interest expenses climbed 41.8% to 289.4 million yuan (36.9 million euros). The figures point to heavy investment in future technologies and a rising cost of capital.
For the third quarter, XPeng forecasts global sales of 115,000 to 121,000 vehicles, a year-on-year change ranging from -0.8% to 4.3%. The company expects quarterly revenue of 21.7 billion to 23.4 billion yuan (2.767 billion to 2.984 billion euros), up 6.4% to 14.8% from the same period last year.
XPeng’s results show the pressure on China’s electric vehicle sector: domestic demand is slowing as price competition intensifies, while state support recedes. The company’s shift toward international markets and increased investment in new idea may help stabilize its position, but it has yet to chart a clear path to profitability as the industry changes.
