As one of the three leading new energy vehicle manufacturers, XPeng Inc. consistently attracts significant market attention.

The company recently disclosed its 2025 financial results. Full-year revenue and net profit attributable to shareholders both increased by over 80% year-on-year. Notably, the fourth quarter of 2025 saw a net profit of 383 million yuan, marking XPeng's first quarterly profit. A primary driver of this improvement was increased vehicle sales, which boosted overall revenue. The fourth quarter set a new record for quarterly deliveries.

Founded in 2014 by He Xiaopeng, Xia Heng, and He Tao, XPeng entered the competitive new energy vehicle sector. For a company over a decade old that has accumulated tens of billions in losses, achieving a quarterly profit is undoubtedly a milestone.

However, the key question for the market is whether this single quarter of profit can serve as a new starting point for sustained profitability.

Furthermore, as XPeng's business scale expands, He Xiaopeng's ambitions have grown. Unlike some competitors, XPeng is diversifying aggressively. He Xiaopeng aims not only for a strong position in new energy vehicles but is also steering the company into humanoid robots, AI chips, Robotaxi (autonomous taxis), and flying cars.

In essence, He Xiaopeng intends to forge a profit path distinct from traditional automakers, quietly expanding the competitive battlefield into the broader AI arena, a move closely watched by capital markets.

XPeng's current strategy appears to be a dual-track approach: using vehicle sales as a foundation while betting on technology as the main driver. The sustainability of this model in generating profit will test the company's balancing act.

The quarterly profit was achieved through a sales "counterattack." The year 2025 was significant for XPeng, as growth in vehicle sales, particularly of more affordable models, led to substantial performance improvement and the first quarterly profit.

Total revenue for 2025 reached 76.72 billion yuan, a year-on-year increase of 87.7%, setting a historical record. The net loss attributable to shareholders was -1.139 billion yuan, an 80.32% improvement year-on-year.

Although the company remained unprofitable for the full year, the fourth quarter of 2025 saw revenue of 22.25 billion yuan, up 38.2% year-on-year, and a net profit of 383.2 million yuan, marking the first quarterly profit since its 2018 listing.

In terms of profitability, XPeng's gross margin for 2025 was 18.9%, an increase of 4.6 percentage points year-on-year, also a record high. The fourth-quarter gross margin was 21.3%, up 6.9 percentage points year-on-year, representing the fourth consecutive quarter of growth.

This strong performance was underpinned by robust vehicle sales. XPeng's preset sales target for 2025 was 350,000 units. The company's total deliveries for the year reached approximately 429,400 vehicles, a 125.9% increase year-on-year, setting a new annual record. Fourth-quarter deliveries totaled 116,249 units, a 27.0% increase from 91,507 units in the same period of 2024, achieving a new quarterly record. Automotive sales revenue in the fourth quarter further increased to 19.07 billion yuan, with an automotive business gross margin of 13.0%.

From a product perspective, media reports attribute the sales surge to the popularity of models like the MONA M03 and P7+. The MONA M03 contributed 40.8% of sales, while the P7+ and G6 together contributed nearly 30%. These three models accounted for almost 70% of total sales. Higher-end models like the X9 and G9 accounted for about 6% of sales.

It is understood that XPeng's MONA M03, P7+, and G6 models are priced below 200,000 yuan, while the X9 and G9 exceed 300,000 yuan. This suggests XPeng's sales are increasingly reliant on more affordable models. The strong sales of these cheaper vehicles pushed total annual deliveries past 420,000 units.

For its outlook, XPeng provided a conservative forecast for the first quarter of 2026. According to reports, the company expects vehicle deliveries to be between 61,000 and 66,000 units, a year-on-year decrease of approximately 29.79% to 35.11%. It anticipates total revenue between 12.2 billion and 13.28 billion yuan, a year-on-year decline of about 16.01% to 22.84%.

Cumulative deliveries for January and February 2026 were approximately 35,300 units, leaving a gap of 25,700 to 30,700 units to meet the quarterly target. Data from the China Passenger Car Association shows that in January 2026, sales of the MONA M03 were 6,722 units, the highest among all models, but represented a 55.85% year-on-year decrease. Sales of the X9 and G9 were below 1,000 units each, with year-on-year declines exceeding 60% and 40%, respectively.

This indicates that while sales volume from more affordable models can help XPeng survive, sustaining profitability and achieving better performance may require boosting sales of higher-priced models to solidify its market position.

Additionally, XPeng's 2025 financial report highlighted that service and other income has become an important growth driver. For the full year 2025, service and other revenue reached 8.34 billion yuan, a 65.6% increase year-on-year, with a remarkably high gross margin of 68.2%. In the fourth quarter alone, this segment generated 3.18 billion yuan in revenue with a 70.8% gross margin.

Currently, service and other income accounts for about 11% of total revenue. Although this proportion is not high, the high gross margin makes it a significant area for XPeng. The company stated that growth in this segment primarily comes from technology R&D services, parts and accessories sales, and carbon credit transactions.

Thus, XPeng seems to be pursuing a dual-track strategy of "vehicle sales as the foundation, plus technology services." While this approach has proven viable for achieving some profit, its sustainability remains to be seen.

During the earnings call, He Xiaopeng expressed his desire to establish a business model driven by technological leadership, creating a profitability path different from traditional automakers.

He Xiaopeng's ambition involves a major bet on AI. Financial reports reflect past performance, but the market is equally focused on XPeng's business布局, which impacts future competitiveness.

He Xiaopeng believes XPeng should not be just a car seller. He aims to build a technology-driven business model. To achieve this, he is leading XPeng to heavily invest in AI, attempting to create an ecosystem based on a large AI model that covers new energy vehicles, humanoid robots, AI chips, Robotaxi, and flying cars.

In 2025, XPeng's R&D expenditure was 9.49 billion yuan, of which approximately 4.5 billion yuan was related to AI investments. The company revealed that AI-related investment will increase to 7 billion yuan in 2026.

What underpins He Xiaopeng's confidence? On one hand, XPeng has substantial cash reserves. As of the end of 2025, cash and cash equivalents, restricted cash, short-term investments, and time deposits totaled 47.66 billion yuan, an increase of about 5.7 billion yuan from the end of 2024.

On the other hand, XPeng leverages its vehicle manufacturing experience for mass production and cost advantages, alongside technological synergy and full-stack capabilities.

Reportedly, on March 2, XPeng officially launched its second-generation autonomous driving model, VLA. This model is being rolled out in batches to Ultra models. The VLA model is designed not only for cars but also to power four types of embodied intelligent terminals: Robotaxi, humanoid robots, and flying cars.

Regarding AI chips, XPeng's self-developed "Turing" AI chip, which began mass production and installation in the third quarter of 2025, has cumulative shipments exceeding 200,000 units. The shipment target for 2026 is nearly 1 million units, with plans to transition all models to the self-developed chip starting in the second quarter.

Furthermore, the Turing chip has secured a global designation from Volkswagen, and XPeng will collaborate with Volkswagen to develop new models equipped with the Turing AI chip.

In the Robotaxi sector, XPeng formally established a Robotaxi business unit on March 23, adopting a lightweight primary organizational structure aimed at maximizing commercialization efficiency with minimal organizational cost. XPeng plans to launch three fully self-developed Robotaxi models in 2026.

For humanoid robots, XPeng plans to achieve mass production of the "Iron" robot by the end of 2026, targeting a monthly production capacity of thousands of units. Instead of initially targeting the research market, XPeng plans to deploy these robots in commercial, industrial, and eventually household scenarios.

While XPeng's diversification might seem like a distraction from its core business, it is essentially exploring new growth avenues. For new automakers, relying solely on vehicle sales may be insufficient to support valuations and future profit expectations, necessitating breakthroughs in technology, product, and globalization.

However, XPeng's heavy bet on AI, while a long-term strategy, is also a significant gamble. Crucially, vehicle sales remain the primary source of revenue in the short term. As of the end of 2025, automotive sales revenue was 68.38 billion yuan, accounting for 89.13% of total revenue. In contrast, the commercial profitability models for businesses like humanoid robots and Robotaxi remain unproven.

Although the VLA model holds great promise, its technological maturity and user acceptance require market validation. Its ability to genuinely boost sales and profits is yet to be seen. Additionally, the Robotaxi space has numerous competitors, and it remains uncertain whether XPeng can catch up and convert these efforts into tangible profitability.

These future bets on AI are precisely why the market is highly focused on the sustainability of XPeng's profitability. The company's future performance warrants continued observation.