XPeng Commences Robotaxi Production in Guangzhou as Q4 Profit Signals Strategic Shift
XPeng’s move into mass-producing autonomous vehicles utilises its in-house Turing AI chips, marking a pivotal step in its evolution into a full-stack physical AI company.
Chinese electric vehicle manufacturer XPeng has commenced mass production of robotaxis in Guangzhou, utilising its in-house Turing artificial intelligence chips. The company has established a dedicated robotaxi unit to oversee product development, research, testing, and operations. This initiative supports CEO He Xiaopeng’s strategic pivot toward becoming a full-stack physical AI company, a vision outlined in January. Pilot passenger operations are targeted for the second half of 2026, with a goal of achieving driverless operations without a safety driver by early 2027.
The announcement follows strong financial results that provide the necessary runway for this expansion. In its fourth-quarter earnings report, XPeng recorded its first-ever quarterly profit, posting a net profit of $55.87 million. Total revenues for the quarter reached $3.27 billion, representing a 38.2 per cent year-on-year increase. Full-year gross margin reached 18.9 per cent, an increase of 4.6 percentage points from the previous year. Annual vehicle deliveries totalled 429,445, more than double the prior year’s figures.
Cash reserves stand at $7 billion, providing a significant buffer for the company’s ambitious technology roadmap. Dr Hongdi Brian Gu, vice chairman and co-president of XPeng, described the company’s commitment to physical AI as an unwavering investment. The Turing AI chip, which powers the new robotaxis, has shipped over 200,000 units since entering mass production in the third quarter of last year. XPeng targets nearly 1 million Turing chip shipments in 2026.
Commercial validation of XPeng’s technology is already evident. Volkswagen is a paying customer for both the Turing chip and the VLA 2.0 autonomous driving technology. The VLA 2.0 system is at the heart of the robotaxi program, with daily test drives more than doubling month on month in March 2026. The company’s GX Robotaxi has received official road testing approval in Guangzhou and is conducting ongoing Level 4 corporate road tests.
Looking ahead, XPeng is investing $1.03 billion in physical AI-related research and development in 2026. The company also plans to begin overseas road testing of the VLA 2.0 system this year, with a full international rollout expected by late 2026 or early 2027. Additionally, the humanoid robot IRON is targeted for mass production by the end of 2026, with an initial monthly production goal of over 1,000 units.
Analyst sentiment regarding the stock is mixed, with 10 analysts recommending a Strong Buy, two recommending a Moderate Buy, five recommending a Hold, and two recommending a Strong Sell. The average analyst price target is $23.54, compared to the current price of $15. Despite intense competition from rivals such as Baidu and Pony.ai, and unproven robotaxi economics at scale, XPeng appears to be at a genuine inflection point in its business model.
