XPeng's 2025 Annual Report Filing Confirms Ongoing Struggles Amid EV Price War

What happened

XPeng has filed its 2025 Annual Report on Form 20-F, providing updated financial disclosures that highlight persistent operational challenges. The report reveals continued volatility in deliveries, with Jan-Feb 2026 figures of 20,011 and 15,256 vehicles, far below the internal 2026 target of 45,800-50,000 per month. It underscores supply-side risks, including uncertain governmental approval for Zhaoqing manufacturing, which could constrain production regardless of demand. Management explicitly warns that the company may fail to meet publicly announced guidance due to average selling price pressure, supplier costs, and competitive intensity. Despite a net cash position of RMB 45.28 billion as of March 2025, ongoing losses and negative interest coverage indicate no near-term profitability relief.

Implication

The annual report solidifies XPeng's exposure to a brutal China EV price war, where monthly delivery prints and guidance credibility remain primary swing factors. Near-term catalysts, such as the March 20 earnings call and post-holiday delivery data, are critical to assess whether the company can bridge the gap to its 2026 targets. Supply constraints from Zhaoqing approval uncertainties add a new layer of risk that could hamper growth even if demand recovers. While the balance sheet offers liquidity, persistent losses mean cash burn could accelerate if volumes don't improve, increasing dilution risk. Therefore, the WAIT rating is justified until clearer evidence of sustained operational improvement emerges, likely within the next 3-6 months.

Thesis delta

The filing does not shift the core investment thesis but deepens the bearish case by highlighting unresolved supply-side risks and guidance fallibility. It reinforces the WAIT stance, as no new positive catalysts have emerged to alter the near-term outlook of delivery volatility and margin pressure. Investors should closely monitor the March 20 earnings and subsequent delivery prints for any signs of inflection before reconsidering the position.