XPeng (XPEV) Is Up 20.6% After Strong Q2 and Expanded Volkswagen Partnership - Has The Narrative Shifted?

• In August 2025, XPeng reported second-quarter revenue of CNY 18.27 billion, a narrowing net loss, and issued third-quarter guidance forecasting revenue between CNY 19.6 billion and CNY 21.0 billion, with a year-over-year rise of about 94% to 107.9%.
• Volkswagen Group also announced the expansion of its technical collaboration with XPeng, allowing XPeng’s E/E Architecture to be adopted across Volkswagen's full range of platforms, including electric, hybrid, and internal combustion vehicles, in China.
• To understand the impact, we’ll explore how XPeng’s deepening Volkswagen partnership may strengthen the company’s competitive positioning and growth narrative.

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XPeng Investment Narrative Recap

For XPeng shareholders, the core belief centers on the company’s ability to rapidly scale innovative EV technology and monetize partnerships, despite persistent net losses. The recent Volkswagen collaboration expansion meaningfully reinforces XPeng’s short-term growth catalyst by broadening its high-margin licensing revenue potential, but the most immediate risk, continued net losses and delayed profitability, remains largely unchanged for now.

The August agreement to extend XPeng’s E/E Architecture across all of Volkswagen’s platforms in China stands out, as it could accelerate recurring licensing streams and solidify XPeng’s position as an influential software supplier in the sector. While this progress supports the central catalyst of scaling technology revenue, the long-term sustainability for XPeng still depends on controlling costs and improving vehicle margins against stiff domestic competition.

However, investors should also consider that ongoing high R&D and marketing expenses mean that...

Read the full narrative on XPeng (it's free!)

XPeng's outlook forecasts CN¥132.1 billion in revenue and CN¥5.9 billion in earnings by 2028. This scenario is based on an annual revenue growth rate of 29.9% and a CN¥10.2 billion increase in earnings from the current level of CN¥-4.3 billion.

Uncover how XPeng's forecasts yield a $25.98 fair value, a 9% upside to its current price.

Exploring Other Perspectives

Simply Wall St Community members provided 13 fair value estimates for XPeng ranging from CN¥9.23 to CN¥34.15 per share. While partnership milestones drive optimism, the wide spread in these views points to differing expectations around future profitability and the risks that could affect XPeng’s earnings trajectory.

Explore 13 other fair value estimates on XPeng - why the stock might be worth less than half the current price!

Build Your Own XPeng Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your XPeng research is our analysis highlighting 1 key reward that could impact your investment decision.
• Our free XPeng research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate XPeng's overall financial health at a glance.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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