XPeng's sales in the first seven months of the year have fallen the most among major peers. The company's high-end X9 model faced a massive recall, hurting its brand image, while the newly launched GX, despite a sharp price reduction, still underperformed relative to its predecessors.
As the 2026 auto sales season reaches its midpoint, various automakers have released their new energy passenger vehicle sales data for the first seven months. Among the top-tier companies with monthly sales exceeding 10,000 units, XPeng, along with BYD, Li Auto, and Seres, saw a decline in sales from January to July. XPeng sold a cumulative 204,000 vehicles during this period, representing a 12.5% year-on-year decrease, the largest drop among the group. Currently, XPeng's sales are heavily reliant on its lowest-priced model, the MONA M03, while its flagship high-end MPV, the X9, has struggled with weak sales, falling far behind competitors like Denza D9 and Voyah Dreamer. A previous incident where the vehicle stalled due to high temperatures led to a large-scale recall, further tarnishing the brand's reputation.
Additionally, the much-anticipated new model, the XPeng GX, saw its actual price slashed by 50,000 to 130,000 yuan compared to the pre-sale price. However, in its first full month after delivery began, sales still lagged behind the higher-priced and longer-established AITO M9 and NIO ES8, and only slightly exceeded the Li Auto L9, which faces competition from the L8. The company's rebranding and diversification efforts earlier this year have not generated synergies but instead weighed on its core automotive business. XPeng's current operations and financial performance are insufficient to support its grand physical AI narrative, and its market value has fallen significantly behind Li Auto and NIO.
High-End X9 Sales Significantly Lag Competitors as Large-Scale Recall Further Damages Reputation
As automakers release their latest results, XPeng, once a stable leader among new energy vehicle startups, has fallen into an unprecedented slump. In the first seven months of 2026, XPeng's cumulative sales reached 204,000 vehicles, a year-on-year decline of 12.5%, the worst performance among mainstream new energy vehicle companies. XPeng's sales are highly dependent on the lowest-priced MONA M03, which sold approximately 62,300 units in the first half of the year, accounting for nearly 40% of total sales. The X9, the flagship MPV with the highest price tag in XPeng's lineup, was launched in early 2024 with high expectations. However, entering 2026, its sales have shown a steep month-on-month decline, falling from 3,971 units in January to just 1,466 units in June. In comparison, the Denza D9 and Voyah Dreamer, both mid-to-large-sized new energy MPVs, have firmly dominated their market segment, leaving the XPeng X9 far behind.
To make matters worse, just as core product sales were declining, XPeng's quality reputation suffered another major blow. On July 24, 2026, the State Administration for Market Regulation announced that XPeng had officially filed a recall plan, initiating an emergency recall of 33,473 X9 vehicles produced between August 8, 2023, and August 11, 2025, effective August 28, 2026. The announcement stated that due to manufacturing process fluctuations, the front air springs' airtightness had decreased, potentially leading to slow air leakage after prolonged use in high-temperature, high-humidity environments. In extreme cases, this could directly affect vehicle handling, posing a significant safety hazard. In fact, as early as last summer, some owners reported air suspension malfunctions in the X9. This summer, many regions in China experienced persistent extreme temperatures above 40 degrees Celsius, leading to a surge of X9 owners on social media reporting sudden air suspension failures, including air leaks, vehicle body collapse on one side or overall, and dashboard warnings indicating compressor overheating. XPeng's response shifted from initially calling it a "normal phenomenon" to attributing it to "manufacturing process fluctuations" in the recall notice. Notably, on July 1, XPeng announced that global cumulative deliveries of the X9 had exceeded 60,000 units. Based on this estimate, the recall size accounts for approximately half of all X9 vehicles sold. This large-scale recall is a significant blow to XPeng's marketing of "high-end, hardcore self-developed" technology and product reputation, worsening the situation for the company as it navigates a product transition period.
GX Pricing Fails to Boost Sales, Diversification May Be a Drag
On May 20, XPeng launched its first full-size flagship large SUV, the GX, with a price range of 269,800 to 349,800 yuan. Compared to the pre-sale price, the entry-level version saw a sharp reduction of 130,000 yuan, while the top-tier version was cut by 50,000 yuan. During the launch, XPeng CEO He Xiaopeng stated, "The main configuration of the XPeng GX is on par with the current 500,000-yuan class 9-series flagship SUVs." Official data showed that within 12 hours of launch, the GX received over 24,863 firm orders. However, in June, the first full month after deliveries began, the GX's sales still fell short of the higher-priced and older AITO M9 and NIO ES8, and only slightly exceeded the Li Auto L9, which faces competition from the L8. The GX was expected to be a key growth driver for XPeng in June, but given the company's nearly flat total sales month-on-month, the new model's performance was significantly below expectations.
In stark contrast to the lagging sales in its core automotive business, XPeng has been aggressively pursuing strategic expansion. On April 1, 2026, XPeng officially rebranded as "XPeng Group." He Xiaopeng designated 2026 as "a key year for focusing on physical AI and globalization," announcing a transformation from an automotive company to a "physical AI technology group." Its business footprint has expanded to include flying cars, Turing AI chips, VLA autonomous driving models, humanoid robots (IRON), and Robotaxi services. However, the costs of diversification are becoming apparent. In the first quarter of 2026, XPeng Group reported total revenue of 13.03 billion yuan, down 17.6% year-on-year and a sharp 41.4% decline quarter-on-quarter. Its net loss reached 1.78 billion yuan, nearly tripling compared to the same period last year. The company's quarterly R&D expenses totaled 2.91 billion yuan, a 46.8% increase year-on-year, with full-year physical AI-related R&D investment planned to rise to 7 billion yuan. Meanwhile, the company's debt-to-asset ratio has climbed to 71.77%, a historical high. Some analysts have pointed out that the "decline in first-quarter sales is related to the overall industry environment," but the deeper reason is "excessive resource dispersion." The diversification strategy requires continuous large-scale capital investment, yet XPeng is currently "operating at a loss for the full year, with cash flow highly dependent on financing and operating receipts." Overemphasizing the "technology narrative" may cause XPeng to deviate from its core automotive business, a path that has led some other new energy vehicle makers to "chase technological flashiness while losing touch with product reality." XPeng's current operational and financial performance is clearly insufficient to support its grand physical AI narrative. As of the close on August 5, XPeng Group, despite its many business segments, has a market value of only about 90 billion Hong Kong dollars, significantly lower than both Li Auto and NIO.
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