Several electric-vehicle makers, including Chinese EV startup XPeng (XPEV), accelerated in 2020 as total EV sales in China surpassed 1 million for the year. XPeng stock had a breakout year, rising more than 100% through December after a multibillion-dollar debut on the NYSE in August.
XHowever, shares have struggled in 2022 as the market turned away from growth stocks like XPeng. Shares fell from around 50 a share to a low of around 18 in May. In recent weeks, the stock faced resistance at the 200-day line and moved below its 50-day line.
Over the long haul, the future looks optimistic for EV makers. Analysts are bullish about both China EV sales and global EV sales. GlobalData estimates EV sales in China to slow down relatively in 2022 when compared to 2021. Nonetheless, they estimate growth of 57% year-over-year to reach a volume sale of 7.2 million units. Should investors consider buying XPeng stock?
Currently, the stock market is in a correction, which means it's not an optimal time to be buying stocks but still very important to be identifying top contenders for your watchlist. Investors should seek out leading stocks in leading industry groups that are outperforming the market for when the market returns to a confirmed uptrend.
Outlook For XPeng, EV Stocks
Several new EV stocks emerged in the wake of leader Tesla (TSLA), including Nikola (NKLA), Workhorse Group (WKHS) and Hyliion (HYLN), as well as XPeng and China EV startup peer Nio (NIO). Additionally, several legacy automakers have transitioned to focusing on hybrid-electric vehicles, including General Motors (GM), Ford (F) and Ferrari (RACE).
As the competition heats up, XPeng has been expanding operations to fend off Tesla and other major players in the EV market.
In 2020, the company more than doubled its volume of vehicles delivered versus 2019, to 27,041. The firm also recently introduced a sedan model in hopes it'll be a significant driver of sales growth.
After its launch in early 2020, XPeng's P7 sports sedan quickly reached a total of 20,000 deliveries and surpassed the G3 compact SUV as the firm's most popular vehicle. This was a major milestone for XPeng because it became the fastest vehicle to reach 20,000 deliveries of any Chinese EV startup.
But Chinese EV stocks remain in a bear market due to China's recent tech crackdown. Regulatory officials have been scrutinizing data security and automated driving functions of "smart" vehicles, after Tesla's recent backlash over safety issues. Group leader Tesla has been trading choppily in recent weeks which also hindered EV stocks.
XPeng's 2021 Annual Tech Day
On Oct. 24, XPeng held its annual its annual Tech Day event at its headquarters in Guangzhou. The company unveiled future plans for smart mobility, including XPeng's latest generation of flying car made by its affiliate HT Aero, plans for improving its energy replenishment system, and the company's vision for autonomous driving.
XPeng Chairman and CEO He Xiaopeng said the company aims to have the flying car in mass production by 2024. More importantly, XPeng aims to price the vehicle under RMB 1 million ($157,000).
The company says its mission is make the joy of flying accessible to anyone who can drive through flight control algorithm assistance, intelligent assisted driving, and steering wheel-independent operation.
As for the future of its energy replenishment systems, XPeng hopes to introduce China's first mass-produced 800V high-voltage SiC platform. The company's next-generation X-Power supercharger will be able to support "refueling" vehicles with up to 200km of range in 5 minutes.
Finally, XPeng announced details on its XPILOT 4.0 system and said its newest cars will be equipped with the system. XPeng's new model, a flagship SUV on the same platform as the P7, might be named the G7. The car is slated to debut at next month's Guangzhou Auto Show, according to several local media outlets.
XPeng Technical Analysis
Just recently shares of XPeng stock hit resistance at its 50-day line. This means the stock may have trouble getting above this level in the future. Currently, shares are trading around 13 a share amid a rapid decline over the past few weeks.
Back in January, shares became briefly extended from a 48.08 buy point from a long consolidation, but the breakout failed shortly thereafter.
XPeng stock formed an IPO base shortly after it debuted in August 2020. From there, the stock had a successful breakout from a 25.10 buy point. Shares soared past 74 until they peaked in Nov. of last year. Then the stock lost much of its market value before bottoming at roughly 18 on May 13.
As of now, there are no promising buy point set-ups within the stock.
XPEV Stock By The Numbers And Ratings
XPeng reported its most recent earnings on May 23. The electric vehicle maker noted that a wider-than-expected quarterly loss was caused by supply-chain issues and rising materials costs that cut into its margins.
The firm's sales forecast for the current quarter also came in below analyst projections. The company reported a loss of 28 cents a share for the March-ended quarter. This was worse than the 13 cent loss reported in the same quarter a year prior. But sales jumped 161% on a year-over-year basis, which is positive.
XPeng reported on July 5 that electric car sales for the month of June increased by 133% year-over-year to 15,295. That's a near-record result for the company. As for its Q2 deliveries, the company delivered 34,422 BEVs, which represents a jump of 98% year-over-year. According to XPeng, this was also the highest result among emerging auto brands in China for the fourth consecutive quarter.
5 Best Chinese Stocks To Buy And Watch Now
Is XPeng Stock A Buy?
XPeng stock should not be bought right now. The recent IPO stock is showing excellent revenue growth but still no earnings. This would still qualify the stock as buyable but shares are not in the position technically to support initiating a position. Wait for the stock to set up in a new base.
XPeng stock still has a lot of volatility to contend with as it seeks stable growth. For conservative investors, XPeng stock is not one to be added to your portfolio right now. However, the Chinese EV maker is one to add to your watchlist in the meantime. Also, investors can check IBD stock lists and other IBD content to find the best stocks to buy or watch.
Follow Fox on Twitter at @IBD_RFox for more commentary on XPeng stock and other market insights.
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