XPeng stock is currently at a discounted valuation with multiple risks and upside. XPeng is facing rising costs and slower deliveries, as well as weaker margins. However, the company’s new G9 SUV is expected to launch in September, with strong pre-orders. This should boost the company’s delivery numbers. The company also faces an unstable Chinese economy, which could further weaken demand and prices.
Despite the recent decline, the company is still well positioned to generate market-beating returns in the long run. The stock’s valuation is compelling compared to its peers and is at just 2x its consensus 2022 and 2023 revenue estimates. This suggests that XPeng is a great long-term investment opportunity.
XPeng is a growing player in the electric vehicle space and is targeting the mass market. Prices for its cars range between RMB150,000 and RMB400,000. That’s significantly lower than the average cost of Tesla models in China. Moreover, XPeng also runs 661 branded supercharging stations across the country, and partners with third parties to offer over 200,000 more. It also has a driver-assistance system that is still being refined.
In addition, XPeng is adding two new trims and optional packages to its product line. The company attributed this move to its desire to meet customer demand. Further, the company has plans to expand its production capacity in its Wuhan and Guangzhou facilities. In addition, it has recently upgraded its Zhaoqing plant to a production capacity of 200,000 units per year.
Investors in XPeng stock should be aware of the risks associated with it. First, the stock’s voting power is concentrated. Its three co-founders control 69.5% of the voting power in the company. The company is a subsidiary of Alibaba Group. This could lead to an unpredictable situation for investors.
Secondly, the company’s new products aren’t enough to offset the macroeconomic headwinds in China. Despite the recent announcement of a flying car prototype and new robots, these products can’t overcome investor concerns about the future of China. Investors will need to restore their confidence in China before the company’s stock can continue its upward trajectory.
XPeng is a leading Chinese smart electric vehicle company that designs, develops, manufactures, and sells electric vehicles. Its vehicles are targeted at growing middle-class consumers in China. In 2021, XPeng will sell over 98,000 smart electric vehicles and make up 3% of the passenger new energy vehicle market in the country. The company is also a leader in the field of autonomous driving technology.
