Xpeng Inc

The European Union is debating a draft of the Industrial Accelerator Act, pending legislation that would give preferential treatment to products made in the EU. Under the draft, electric vehicles would need 70% of their contents made in the EU and would have to be assembled in the region to qualify for subsidies and tax incentives. The legislation is awaiting a European Parliament committee decision, with a September 30 deadline for lawmakers to submit amendments and a committee vote scheduled for December 1. The measure could be a headwind for Japanese automakers looking to sell in Europe, including Toyota Motor, Honda Motor, and Nissan, as well as Chinese EV makers such as Nio, BYD Company, and XPeng.

Simply Wall St lowered its fair value estimate for XPeng to US$19.06 from US$22.36, as updated Street targets for the Chinese automaker now range roughly between US$12 and US$24. JPMorgan, Citi and BofA all kept positive ratings while trimming their price targets into the US$18 to US$24 range, with JPMorgan cutting from US$27 to US$24 and UBS moving from US$18 to US$12. UBS highlighted XPeng as an emerging Chinese automaker in humanoid robotics, pointing to a robotics capital raise of over US$900m at a valuation above US$6.3b as longer term optionality beyond the core auto business, while Barclays pointed to the L03 model as important for second half 2026 results and for XPeng reaching 10,000 overseas deliveries by Q4. On the bearish side, UBS and Barclays flagged pressure on the core auto business from intense competition, supply chain issues, short product cycles and lower than expected Q3 guidance, and BofA reduced its 2026 to 2028 volume assumptions by mid single digit percentages. The revised model also adjusted CN¥ revenue growth to 19.66% from 21.95%, net profit margin to 2.46% from 3.44%, future P/E to 56.08x from 44.61x, and the discount rate to 12.88% from 12.04%.

The second-life electric vehicle battery market is projected to grow from USD 1.70 billion in 2026 to USD 224.24 billion by 2040, according to a Research and Markets report published on GlobeNewswire. The growth is driven by increasing EV adoption and demand for cost-effective stationary energy storage, with applications in renewable energy storage, grid balancing, and EV charging. The market's expansion is supported by circular economy policies, automaker partnerships, and technologies such as AI diagnostics, though performance variability and end-of-life management remain challenges. Separately, XPeng filed a shelf registration this week for $74.9 million involving an ESOP-related offering of 14 million Class A Ordinary Shares; its shares fell 4.5% to $10.23, while HGTECH rose 5.8% to CN¥105.98 and Tesla closed at $356.58, down 0.7%.

The draft amendment to the Road Traffic Safety Law introduces for the first time a dedicated chapter with special provisions for autonomous vehicles, clarifying that when traffic violations occur while autonomous driving functions are activated, the manufacturer or importer will be responsible for handling them, and requiring that autonomous driving functions must not be falsely or exaggeratedly advertised. The draft has 9 chapters and 170 articles, and also stipulates that autonomous vehicles must pass road traffic rule compliance testing and be legally registered before hitting the road, and implements a compulsory motor vehicle traffic accident liability insurance system. Cui Dongshu, head of the Passenger Car Market Information Joint Conference of the China Automobile Dealers Association, said this legal revision clarifies primary responsibility at the legal level and resolves the long-standing pain point of liability attribution. Market reaction was mixed. Hong Kong-listed new energy vehicle makers broadly fell, with XPeng down 9.19 percent, NIO down 3.45 percent, Li Auto down 3.60 percent, and Leapmotor down 5.71 percent. Among robotaxi concept stocks, Pony AI fell 5.62 percent and WeRide fell 3.95 percent. Meanwhile, the upstream intelligent driving industry chain was relatively resilient, with Desay SV down slightly by 0.45 percent, Momenta up 5.97 percent, and Horizon Robotics up slightly by 0.53 percent.

China has begun its largest vehicle recall, with Tesla and 10 other manufacturers addressing safety concerns involving emergency access to vehicle doors. The campaign covers almost 4.3 million vehicles, with Tesla accounting for the biggest portion at about 2.98 million Model 3, Model Y, Model S, and Model X vehicles affected. The recall centers on the possibility that occupants or rescuers may struggle to find or use mechanical door releases after a serious crash, particularly if a vehicle's electrical system stops working. Tesla plans to add identification labels and distribute a software update that can lower the windows following a collision. Other affected manufacturers include Xiaomi, Leapmotor, Xpeng, and Geely, with Xiaomi covering about 390,000 vehicles, while Leapmotor and Xpeng are recalling roughly 371,000 and 264,000 respectively.

BYD is preparing to unveil its first humanoid robot in August, expanding its rivalry with Tesla beyond electric vehicles and into embodied AI. The company plans to introduce the robot at its Di Space experience centers, beginning with a presentation in Zhengzhou, and reportedly said the robots will be more than just a concept product and will be able to interact with visitors. Executive Vice President Stella Li identified retail as the first target market, envisioning two or three robots in every store to explain vehicle features, demonstrate products, and assist sales staff. BYD established a dedicated humanoid-robotics laboratory in late 2024 and has tested machines from Chinese developers including Unitree and UBTech. The move places BYD against Tesla's Optimus program and Chinese rivals including XPeng, while U.S. restrictions on imports of new Chinese humanoid robots could limit BYD's access to a major overseas market.

Leading domestic Tier 1 supplier Konghui Technology issued an official statement publicly responding to the reliability dispute over air suspensions. As of June 30, 2026, Konghui Technology has supplied air springs for over 35 vehicle models, with cumulative deliveries reaching 1.47 million units. Among these, more than 550,000 units feature air springs with plastic-welded air chambers, and no batch leak failures have ever occurred for any reason. The statement stems from concentrated reports of air spring failures by Xpeng X9 owners, raising doubts about the durability of domestic air springs. However, Konghui Technology listed partner brands including Li Auto, Zeekr, Lantu, and Audi Germany, without mentioning Xpeng. The supplier of air springs for some Xpeng models is Baolong Technology. As air suspensions move down from vehicles priced above 500,000 yuan to the 200,000 to 300,000 yuan range, domestic suppliers are accelerating their replacement of international giants. A Dongxing Securities research report shows that the installation volume of air suspensions in domestic passenger cars grew from 238,000 sets in 2022 to 1.272 million sets in 2025, with the penetration rate rising from 1.2% to 5.4%. It is projected that by 2030, the installation volume will reach 2.85 million sets, and the market size will exceed 20 billion yuan.

On July 16, eight domestic automakers held launch events, six of which were new vehicle unveilings, a density that has sparked industry concern over excessively rapid product cycles. According to an incomplete tally by Red Star Capital Bureau, GAC Group, Geely Auto, Great Wall Motor, Xpeng, Leapmotor, SAIC's IM brand, Li Auto, and SAIC-GM-Wuling all had activities that day, rolling out a total of seven all-new or refreshed models. In the first half of this year, 630 new car models were introduced in China, averaging 3.5 per day, while only 173 new phone models hit the market in the same period — meaning new car launches are now more than twice as frequent as new phone releases. BYD executive He Zhiqi bluntly called it 'completely insane,' noting that a new car typically requires an investment of over 1 billion yuan and a development cycle of more than two years, yet the buzz rarely lasts three months. Dongfeng Nissan executive Sun Hao went further, likening the pace of new car launches to that of beverages. The rapid iteration has created a 'new car effect death valley,' where vehicles sell well at launch but demand fades just as production capacity ramps up, causing severe supply chain volatility. Several automakers have already booked massive asset impairment provisions — for example, SAIC Motor set aside 6.773 billion yuan in asset impairment provisions for 2025, while GAC Group's cumulative intangible asset impairments over the past three years have exceeded 3.2 billion yuan.

China's new-energy vehicle exports surged more than 150% to 499,000 units in June, even as domestic retail sales of passenger cars fell 23.2% year-over-year to 1.6 million units. New-energy vehicles, including plug-in hybrids and pure-electric vehicles, declined 9% year-over-year but still represented more than 60% of the market for a third consecutive month. BYD's total shipments rose 5.5% despite a one-fifth drop in domestic sales, while Tesla delivered 89,091 vehicles from its Shanghai factory in June, including 52,920 sold locally, marking its strongest monthly total of the year and extending its year-on-year growth streak in China to eight months. The China Passenger Car Association warned that costs and margins remain under pressure from automotive-grade chip prices and speculative lithium carbonate bidding, as Zeekr moved past the halfway point of its annual sales target while Xpeng remained well behind initial projections after weaker first-half deliveries.

XPeng Inc reported a 17.6% year-over-year decline in total revenues for the first quarter of 2026, alongside a net loss of $1.78 billion, as the company transitions from a smart electric-vehicle maker to a physical AI company. Vehicle sales revenue dropped 23.5% from a year earlier on lower deliveries, though the company delivered 62,682 vehicles in the quarter and expects significant delivery growth ahead. XPeng launched the GX, China's first pre-installed mass-produced robotaxi model, with initial orders exceeding expectations and the flagship version accounting for over 80% of total orders. International expansion is accelerating, with overseas deliveries projected to surpass 20% of total revenue starting in the second quarter. The company also highlighted progress in autonomous driving and humanoid robots, aiming to validate its robotaxi business model with an economy car model in 2027.