XPeng’s sales shrank, but margins got prettier

The good, the bad, and the very EV of it all

XPeng kicked off 2026 with a familiar kind of report: the kind where you squint at the top line and then raise an eyebrow at the margins. Quarterly revenue came in at RMB13.03 billion, down 17.6% from a year ago, while total deliveries slid to 62,682 vehicles, a steep 33.3% drop from the same quarter in 2025.

But the margin folks are smiling

Here’s the twist: XPeng’s gross margin improved to 20.6%, up 5 percentage points year over year, and vehicle margin climbed to 12.1%. That’s the kind of math investors love because it suggests the company is getting better at making each car less financially painful to build. In EV land, that’s basically level-up music.

Cash is king, especially when the road gets bumpy

XPeng also said it ended March with RMB42.09 billion in cash, or about $6.10 billion. That matters because a chunky cash pile gives the company breathing room to keep investing in products, tech, and sales without immediately having to go back to the capital markets with a hat in hand.

Big picture: XPeng’s quarter says the company is still fighting the volume battle, but it’s getting more efficient while doing it. If you’re an investor, that’s not a victory lap — but it’s a lot better than burning cash faster than it can sell cars.