Xpeng shares dip on weak earnings as robotics unit raises record $900 million

Xpeng shares fell on 24 August after the Chinese electric vehicle manufacturer reported second-quarter earnings that missed market estimates. The decline followed the release of cautious guidance for the third quarter, with the company projecting revenue between RMB21.7 billion and RMB23.4 billion. This outlook sits significantly below the RMB26.69 billion forecast by analysts, contributing to a stock price that is down approximately 45 per cent from the start of the year.

Despite the near-term disappointment, Xpeng announced that its robotics business had secured over $900 million in its first funding round. The financing, which was backed by investors including Tencent and Alibaba, secured a post-money valuation exceeding $6.3 billion. This round represents a record for a single private funding in Beijing’s embodied-AI sector.

The company intends to use the proceeds to accelerate the development of robotics hardware and software, physical-AI models, and data collection. Xpeng also plans to expand manufacturing capacity and pursue overseas growth. The firm aims to produce 1,000 IRON humanoid robots per month by the end of 2026, with initial deployments planned for retail and industrial locations. Broader commercialisation of the robots is targeted for 2027.

Financially, the company showed strength in its non-core operations. The overall gross margin increased by 340 basis points year-on-year to 20.7 per cent in the second quarter, driven by its services and other businesses. This margin expansion suggests that the company’s value may extend beyond its primary electric vehicle operations.

Wall Street remains cautiously optimistic about the stock’s potential. According to Barchart, the consensus rating for Xpeng is "Moderate Buy," with a mean price target of $21.59. This target indicates a potential 90 per cent rally from current levels, reflecting investor interest in the long-term upside of the robotics division.