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XPENG (XPEV) is trading to a new 52-wk low following a mixed Q2 report this morning. The Chinese smart EV maker reported an adjusted loss of RMB1.29 per ADS ($0.19), while revenue increased 8% yr/yr to RMB19.74 bln ($2.91 bln). However, the main disappointment appears to stem from its Q3 outlook. Although deliveries are expected to improve sequentially again to 115,000-121,000 vehicles, that represents roughly flat yr/yr growth, while revenue is expected between RMB21.7-23.4 bln, representing growth of roughly 6-15% yr/yr.

• Deliveries: Total deliveries of 103,295 vehicles were roughly flat yr/yr but jumped nearly 65% sequentially from a weak Q1. The volume recovery helped vehicle sales increase 55% sequentially to RMB17.05 bln, although vehicle sales were up just 1% yr/yr.
• Services/margins: Overall gross margin expanded 340 bps yr/yr to 20.7% and was relatively flat sequentially. However, vehicle margin declined 220 bps yr/yr to 12.1%, reflecting a product-generation transition, while services and other margin jumped to 75.1% from 53.6%. Services and other revenue nearly doubled yr/yr to RMB2.70 bln, benefiting from technical R&D services provided to another automaker and higher parts and accessories sales.
• New models: XPeng highlighted the early success of its new GX flagship SUV and MONA L03 as supporting confidence in its upcoming product pipeline. GX deliveries reached 6,739 units in June, with its 10,000th vehicle already rolling off the production line, while the MONA L03 launched globally in July and is expected to enter 65 countries and regions this year.
• Robotics: Separately, XPeng's Dogotix robotics subsidiary raised more than $900 mln in its first outside funding round at a post-money valuation above $6.3 bln. The proceeds will support robotics hardware and software development, Physical AI models, mass-production capabilities and global expansion as XPeng pushes toward commercialization of its humanoid robots.

Briefing.com Analyst Insight

XPEV's Q2 results paint a mixed picture. Deliveries recovered sharply from a weak Q1, jumping nearly 65% sequentially, but were essentially flat yr/yr, with Q3 guidance suggesting growth will remain muted even as volumes continue to improve sequentially. Services were the standout, with revenue nearly doubling yr/yr and helping drive the expansion in overall gross margin, although vehicle margin declined 220 bps to 12.1%. At the same time, XPEV continues to invest heavily in new models and AI-related technologies, with R&D expense rising 32% yr/yr and adjusted net loss widening to RMB1.24 bln from RMB0.39 bln. Meanwhile, Dogotix's $900 mln funding round at a post-money valuation above $6.3 bln provides external validation for XPEV's growing robotics and Physical AI business and adds capital as it moves toward commercialization. Still, muted yr/yr vehicle growth and elevated spending appear to be overshadowing the improving services mix and longer-term robotics opportunity in the near term.