Is XPeng Stock a Buy?

The electrical automobile company delivered extra autos than each Nio and Li Auto in December.

Rekha Khandelwal

Key Capabilities

  • XPeng’s electrical automobile deliveries rose 263% year over year in 2021.
  • The EV maker operates roughly 660 of its beget supercharging stations all over China.
  • XPeng stock is buying and selling at a unbelievable valuation when put next with its EV peers.

China is a main market for electrical autos. BloombergNEF estimates there had been global sales of roughly 6.3 million electrical autos (EVs) in 2021. Of these, around 3 million had been sold in China. XPeng (NYSE:XPEV) sold 16,000 EVs in China in December, which appears impressive focused on that it’s competing with some distance bigger and additional established firms within the sector.  Let’s talk about if the EV stock is a desire simply now.

XPeng’s EV sales roar

Some high avid gamers dominate the Chinese EV market. BYD (OTC:BYDDY) (OTC:BYDD.F) sold primarily the most electrical autos in China in December –92,823 — of which 48,317 had been fully electrical, whereas the final had been fade-in hybrids.

A person looking thoughtful while working on his laptop.

Image offer: Getty Pictures.

Tesla sold simply about 53,000 EVs in November in China, all of which had been fully electrical. Other dominant avid gamers within the Chinese EV market consist of a joint mission of SAIC Motor, Overall Motors, and Wuling Motors, which sold extra than 50,000 EVs in November. GAC Community and Mountainous Wall Motors each sold extra than 15,000 EVs in November. 

Following the above avid gamers are original pure-play EV firms including XPeng, Li Auto (NASDAQ:LI), and Nio (NYSE:NIO). Particularly, Li Auto currently provides fade-in hybrids reasonably than fully electrical autos. XPeng grew its EV sales posthaste within the final couple of months.

Monthly vehicle deliveries.

Data offer: XPeng, Li Auto, and Nio. Chart by creator.

XPeng’s EV sales had been higher than each of Nio and Li Auto for 3 months in a row. XPeng delivered 98,155 EVs in 2021, rising 263% year over year. The corporate has to this point delivered 137,953 autos. 

XPeng has been rising its income impressively over the final a number of quarters.

XPEV Revenue (Quarterly) Chart

XPEV Income (Quarterly) files by YCharts

Its moderate quarterly year over year income roar within the final one year is higher than its high peers. Given the anticipated roar within the Chinese EV market, XPeng is smartly-placed to grow even if it maintains its contemporary market piece. The corporate’s handsome range of offerings, and the prospects’ response to its items, would possibly possibly presumably possibly additionally abet it attach that goal.  

A handsome range of offerings

XPeng currently provides three items — the P7 sports sedan, the P5 family sedan, and the G3 SUV. The corporate provides assorted variations of P7 with assorted specs. Pricing begins from Renminbi 229,900 ($36,000) for the customary model going up to RMB 409,900 ($64,300) for the High Performance model.  XPeng started deliveries of the P5 family sedan in October. Its pricing ranges from RMB 160,000 ($25,100) to RMB 230,000 ($36,000). By comparability, pricing for the G3 SUV begins from RMB 149,800 ($23,500).

In November, XPeng launched a original model, the G9. XPeng is launching original items repeatedly, that are helping it in concentrated on a broader grisly of prospects and grow its sales.

XPeng targets the mass market with merchandise priced within the variety of RMB 150,000 to RMB 400,000. That is decrease than all of the items that Tesla sells in China, except the Model 3. XPeng is having a uncover about to give among the finest aspects in its items, nonetheless at great decrease mark aspects than that equipped by the competitors.  

The corporate operates 661 branded supercharging stations all over China. Additionally, it has partnered with third events, providing a community of over 200,000 chargers. Sooner or later, the company provides its beget driver-assistance gadget and is working to refine it continuously. All in all, XPeng looks to be within the toddle for the lengthy-term. 

May possibly well presumably light you desire XPeng stock simply now?

Sooner than deciding to make investments, it’s some distance well-known to tell some key risks associated with investing in worldwide shares. Except for forex, political, and country-particular risks, XPeng patrons face risks touching on to concentrated voting vitality. XPeng’s three co-founders — Xiaopeng He, Heng Xia, and Tao He — relief watch over 69.5% of the company’s complete voting vitality. Further, Taobao China Maintaining Puny, a wholly owned subsidiary of Alibaba Community, controls 14.6% of the voting vitality. 

Such relief watch over would possibly possibly presumably possibly additionally negatively affect the interests of American depositary piece (ADS) holders, ought to light they battle with the interests of these retaining the majority voting vitality. Particularly, such risks seem like already priced within the stock, as reflected within the discounted valuation of XPeng stock when put next with its U.S. peers.

XPeng stock is buying and selling at a bigger mark-to-forward-sales ratio than a number of assorted EV shares equivalent to Rivian, Lucid, or Tesla. Alternatively, XPeng stock is buying and selling at a reasonably higher ratio when put next with that of Nio or Li Auto, reflecting its higher anticipated roar charge.

XPEV Market Cap Chart

XPEV Market Cap files by YCharts

XPeng stock’s valuation appears handsome simply now relative to its peers. An exhilarating merchandise range, impressive sales roar, and a broad addressable market attach XPeng stock attention-grabbing.

All in all, the stock appears smartly placed to generate market-beating returns within the lengthy urge.

This text represents the idea of the creator, who would possibly possibly presumably possibly additionally disagree with the “unswerving” recommendation map of a Motley Fool top class advisory carrier. We’re motley! Questioning an investing thesis — even no doubt one of our beget — helps us all exclaim seriously about investing and repair decisions that abet us change into smarter, happier, and richer.

Rekha Khandelwal has no position in any of the stocks mentioned. The Motley Fool owns and recommends BYD, NIO Inc., and Tesla. The Motley Fool has a disclosure policy.“>

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