XPeng's volume ramp this round has already added to automotive gross profit — selling more did not push down the automotive gross margin. However, the average amount of money left per vehicle declined. The M03 chip swap and continued GX deliveries are addressing two different accounts: how to control costs on the volume model, and how to get higher-priced cars to contribute more gross profit.

Selling 40,000 More Vehicles Added 729 Million Yuan in Gross Profit

In Q2 2026, XPeng delivered 103,295 vehicles, up 40,613 from Q1, a 64.8% increase. Automotive revenue minus cost of sales brought gross profit from 1.330 billion yuan to 2.059 billion yuan, up 54.8%.

Excerpt from XPeng's Q2 financial report, in billions of yuan; the first two columns are Q2 and Q1 respectively.

Estimating by dividing automotive revenue and cost by deliveries in each quarter, average revenue per vehicle fell from 175,500 yuan to 165,000 yuan, cost fell from 154,300 yuan to 145,100 yuan, and gross profit per vehicle fell from 21,200 yuan to 19,900 yuan. Revenue per vehicle dropped by about 10,500 yuan, cost dropped by about 9,200 yuan, so gross profit fell by about 1,300 yuan.

Calculating at Q1's average gross profit per vehicle, the increase in deliveries corresponds to about 862 million yuan in incremental gross profit, while the decline in per-vehicle contribution offsets about 133 million yuan, for a combined increase of 729 million yuan. Automotive gross margin was 12.1% in both quarters — every 100 yuan of automotive revenue still left 12.1 yuan of gross profit, and as average revenue per vehicle declined, the corresponding gross profit amount declined with it.

M03 Chip Swap: The Cost Savings Still Have to Pay for New Features

According to CPCA data compiled by CnEVPost, M03 deliveries were 20,432 in Q1 and 42,056 in Q2, with its share of company deliveries rising from 32.6% to 40.7%. About 53% of XPeng's extra 40,000-plus vehicles came from the M03. How much gross profit each volume model can retain directly affects the return on this batch of incremental deliveries.

2026 MONA M03, priced from 119,800 to 151,800 yuan. Image source: XPeng official.

At the April facelift, the M03 Max switched from two Nvidia Orin-X chips to one self-developed Turing chip. The two range versions of the old and new Max generations were both guided at 129,800 yuan and 139,800 yuan. In an April 2 interview, He Xiaopeng expected the new M03 to be more profitable than the 2025 model, and attributed the "more for the same price" approach to cost reduction from the self-developed chip, scale, and operational efficiency.

At the same transaction revenue, cost reductions such as the chip swap must first offset the spending on newly added features, and only the remaining net savings can become extra gross profit per vehicle. MONA product lead Yang Guang also explained that the chip and