Macquarie Upgrades XPeng (NYSE: XPEV) to Outperform Amidst Strategic Shift to Physical AI

• Macquarie has upgraded XPeng (NYSE: XPEV) to Outperform, signaling positive analyst sentiment for the electric vehicle (EV) manufacturer.
• XPeng is strategically transforming into a "physical AI company," expanding beyond smart EVs to include advanced driver assistance, Robotaxis, and humanoid robots.
• Despite a challenging first quarter with falling total revenues, XPeng demonstrated improved financial strength with its gross margin rising to 20.6%, contrasting with competitor performance.

On May 28, 2026, analyst firm Macquarie upgrades its rating for XPeng (NYSE: XPEV) to Outperform from Neutral. XPeng is a Chinese company that designs and manufactures electric vehicles (EVs). It competes with other EV makers like Li Auto (NASDAQ: LI). The upgrade occurred when XPeng's stock price was $16.44.

The company is shifting its strategy to focus on "physical AI" applications. As highlighted by MarketBeat, this includes advanced driver assistance, Robotaxis, and humanoid robots. To reflect this, the company officially changed its name from XPeng Motors to XPeng Group. This signals a transformation from a smart EV company to a physical AI company.

Despite a weaker first quarter, XPeng shows signs of financial strength. As highlighted by PR Newswire, its gross margin increased to 20.6% from 15.6% a year earlier. Gross margin is the profit a company makes from its sales after subtracting the direct costs of producing its goods. This improvement occurred even as total revenues fell 17.6%.

This performance contrasts with its competitor, Li Auto. As highlighted by GuruFocus, Li Auto’s stock fell after it reported weaker margins. XPeng’s vehicle-specific margin also rose to 12.1% from 10.5%, which the company credits to lower costs and a better product mix. This happened even with a 33.3% drop in vehicle deliveries.

Looking ahead, management anticipates a sharp rebound in second-quarter deliveries. The company plans to deliver four new models this year, starting with the successful launch of the GX. This positions XPeng for a strong sales growth path, with new AI businesses expected to create additional sources of revenue.