Summary In H1, XPeng's net operating cash outflow was 11.72 billion yuan, while its loss was only 3.12 billion yuan. The bulk came from a reduction in payables to suppliers and inventory tie-up; net financing inflow was 6.99 billion yuan, equivalent to 60% of the operating outflow.

In H1, XPeng's net operating cash outflow was 11.72 billion yuan, versus a net loss of 3.12 billion yuan for the same period. In the same period last year, operating cash was still a net inflow of 7.64 billion yuan. In half a year, cash reserves fell from 47.66 billion yuan to 40.48 billion yuan.

Lost 3.1 billion, operating cash outflow 11.7 billion

The loss can't explain this outflow. The gap between the two is over eight billion yuan, mainly from working capital.

How much an automaker loses and how much cash leaves its account are two different books. The income statement records whether money was made this half-year; the cash flow statement records whether money actually came in and went out. Cars sold, parts bought—when the money is paid and when it's collected both widen the distance between the two books.

Gross profit is improving. As discussed in Part 01, in Q2 services and others contributed 49.6% of gross profit on 13.7% of revenue. For the full H1, gross margin rose from 16.5% to 20.6%, with gross profit up 1.14 billion yuan. But R&D expenses rose 1.63 billion yuan over the same period, and operating loss widened from 1.98 billion to 3.02 billion yuan. Gross profit improvement was first eaten by R&D, and further down at the cash level, it ran into a reversal in working capital.

Last year's H1 was also loss-making, yet operating cash was positive. This year operating cash flipped from net inflow to net outflow—a swing of nearly 20 billion yuan, with the extra two billion in losses accounting for only a small piece. To find where this money went, look at the accounts between XPeng and its suppliers.

XPeng H1 2025 vs. H1 2026 net cash flow from operating activities. Data from XPeng's 2026 interim report.

Owed suppliers 7.45 billion less

The main body of cash outflow this half-year was money XPeng paid back to suppliers.

Between automakers and suppliers, the norm is to take goods first and pay later. XPeng's money owed to suppliers is partly recorded in accounts payable and partly issued as bank acceptance bills, recorded in notes payable. In H1, notes payable decreased by 5.17 billion yuan and accounts payable decreased by 2.28 billion yuan—a total of 7.45 billion yuan.

Only by placing last year's H1 alongside does the weight of this account become clear. In H1 last year, notes payable increased by 5.83 billion yuan and accounts payable increased by 1.78 billion yuan—the supplier side contributed 7.61 billion yuan to XPeng's operating cash. This year the same position turned into an outflow of 7.45 billion yuan. One positive, one negative—a swing of over 15 billion yuan, accounting for the bulk of the 20 billion yuan flip in operating cash. Last year's 7.64 billion yuan net inflow was largely propped up by payables.

Notes saw the biggest change. At year-end, XPeng had 19.16 billion yuan in bank acceptance bills outstanding; by end-June it had dropped to 13.99 billion yuan. Of these, bills issued less than three months ago and not yet settled fell from 11.10 billion to 7.15 billion yuan, a decrease of 3.95 billion yuan. The operating cash tied up in notes alone exceeded the half-year loss by over two billion yuan.

Inventory added pressure on the other side. On the cash flow statement, inventory tied up 3.62 billion yuan of operating funds. On the balance sheet, inventory rose from 10.38 billion to 13.73 billion yuan; of the increase, raw materials rose 1.36 billion, work-in-progress rose 1.35 billion, and finished vehicles rose only 640 million. The money is mainly stuck on the production line. In H1, XPeng delivered 165,977 vehicles, down 15.8% year-on-year—under 28,000 per month on average.

Other working capital items moved little. Accounts and notes receivable recovered 870 million yuan, while prepayments and other current assets tied up an additional 1.16 billion yuan—the two largely offset each other. What really dragged operating cash down was still suppliers and inventory. The decrease in payables plus inventory tie-up together exceeded 11 billion yuan—that's the main force pulling down operating cash.

As of end-June, XPeng still had 13.99 billion yuan in notes outstanding and 15.72 billion yuan in accounts payable—a total of 29.71 billion yuan. These are operating liabilities pending settlement, on the same order of magnitude as the 40.48 billion yuan in cash reserves. When looking at XPeng's cash, these 29.71 billion yuan in liabilities must be viewed alongside the 40.48 billion yuan in cash.

Main components of H1 operating cash outflow. Author's calculation based on XPeng's 2026 interim report.

Net financing inflow covered 60%

Of the 11.7 billion that flowed out, XPeng covered part through financing.

In H1, XPeng borrowed 12.88 billion yuan new and repaid 5.83 billion yuan; including other financing items, net financing inflow was 6.99 billion yuan. Short-term bank borrowings rose from 4.28 billion to 10.07 billion yuan, more than doubling in half a year; long-term borrowings rose only 1.48 billion yuan—the bulk of the borrowing increase was short-term. The effective interest rate was 1.31%—this money is cheap, at the cost of having to repay or roll it over within a year. H1 interest expense was 290 million yuan, versus 200 million last year; interest income fell from 600 million to 470 million yuan.

This half-year, XPeng owed suppliers less and banks more. On the investing side, net inflow was 2.92 billion yuan, mainly from XPeng's own time deposits maturing and being recovered. Over the same period, 1.56 billion yuan was spent on purchasing and constructing fixed assets, and 1.63 billion yuan in capital commitments remained unpaid for the Guangzhou, Zhaoqing plants and Wuhan base. Even after borrowing this much, cash reserves on the books were still 7.18 billion yuan less than at year-end.

Of the 40.48 billion yuan, 9.62 billion yuan is pledged as collateral for borrowings, guarantees and notes—1.18 billion more than at year-end. Of the four hundred billion on the books, the freely deployable portion needs another discount.

Management stated clearly in the interim report that liquidity depends on whether operating cash flow can improve, and on the ability to raise equity and borrow.

Supplier settlements and inventory tie-up consumed this half-year's operating cash; financing covered only 60%, and cash reserves fell 7.18 billion yuan over the same period.

Work from Creator Alliance, reviewed and approved.