Please notice that we’re not authorised to offer any funding recommendation. The content material on this web page is for info functions solely.
Xpeng Motors inventory (NYSE: XPEV) is up sharply in early US value motion at this time because the Chinese language electrical car (EV) maker continues its good run after reporting a stellar rise in its January deliveries. Notably, regardless of the escalating commerce tensions between the US and China, Chinese language shares closed virtually at this time however because of the current rally XPEV has prolonged its YTD rally to just about 50%.
Xpeng Motors delivered 30,350 autos in January which was up 268% in comparison with the corresponding interval final yr. Whereas the steep rise was additionally on account of a decrease base as the corporate had delivered fewer than 10,000 autos in January 2024, the efficiency nonetheless appears encouraging.
Xpeng Motors Share Rose Following the Supply Report
Xpeng Motors shares rose following the supply report yesterday and are up sharply at this time additionally. Notably, the corporate’s low-cost Mona MO3 mannequin has been doing fairly effectively and its deliveries have topped 15,000 for 2 consecutive months.
In 2023, Chinese ride-hailing app Didi took a 3.25% stake in Xpeng Motors in trade for its electrical car and autonomous driving property. As a part of that settlement, Xpeng Motors was supposed to provide price range automobiles underneath the “MONA” model. The mannequin’s gross sales have been fairly brisk because the launch final yr and helped drive a 34% rise in Xpeng Motors’ 2024 deliveries.
Volkswagen Additionally Took a Stake in XPEV
In 2023, Volkswagen additionally partnered with Xpeng Motors to construct two EVs on its platform and likewise purchased a stake within the firm for a complete consideration of $700 million. The deal was a pathbreaker for not solely XPEV but in addition the Chinese language EV ecosystem because it mirrored the arrogance of the German auto large in a startup EV firm. It was additionally a sworn statement to Xpeng Motor’s self-driving capabilities. The 2 firms have since expanded their partnership and final yr introduced a joint sourcing program as a way to minimize down on prices.
Final month, the two companies signed a Memorandum of Understanding (MOU) to collectively construct a super-fast charging community in China with mutual entry to the networks.
“By way of this strategic collaboration, greater than 20,000 charging piles operated by each firms, spanning 420 cities in China, will probably be made obtainable to clients of each XPENG and Volkswagen Group China,” mentioned Xpeng Motors in its launch.
EV charging community is vital to EV adoption. Notably, a well-entrenched EV charging community helps deal with vary nervousness which is among the many key causes many individuals chorus from shopping for an electrical automotive. Tesla, which is the biggest EV vendor within the US has construct a large community of charging station named Superchargers that are its aggressive benefit.
Xpeng Motors Presents Superior Self-Driving Options
Xpeng Motors presents one of the vital superior self-driving options in China. Whereas releasing its January deliveries, the corporate mentioned, “XNGP’s month-to-month energetic consumer penetration price in city driving reached 87% in January 2025. On the identical time, XPENG rolled out its newest XOS model, AI Tianji 5.5.0, introducing “door-to-door” ADAS and different superior good driving options, such because the world’s first coach car recognition with bypassing functionality, to eligible clients throughout China.”
The corporate added, “The replace brings a seamless good driving expertise to homeowners throughout various eventualities, together with parking, highways and concrete roads.”
Tesla incidentally does not offer its full-self driving (FSD) options in China. Whereas Tesla anticipated regulatory approvals in China by the tip of 2024 and was trying to provide FSD within the nation from Q1 2025, it hasn’t been capable of safe the approvals up to now.
Notably, the identify FSD is deceptive as whereas the software program is kind of superior, it’s not L4 absolutely autonomous because the identify may recommend. The nomenclature has been a degree of competition with US regulators who accuse the corporate of misleading advertising.
Xpeng Motors Is Seeking to Launch New Fashions
In the meantime, Xpeng Motors is trying to launch new fashions over the following two years, particularly within the price range vary. It’s also trying to launch what’s popularly often known as extended-range electrical car (EREV) in China. These automobiles include a gas tank which may lengthen the car’s vary. These autos have been fairly fashionable in China. Li Auto, which will get the majority of its revenues by promoting EREVs hit a brand new milestone because it delivered over 500,000 autos final yr and its cumulative deliveries topped 1 million. It grew to become the primary rising Chinese language NEV firm to hit the milestone.
China is by far the largest marketplace for new vitality autos (NEVs), a class that features hybrids in addition to battery electrical autos (BEVs). China is residence to BYD which is the world’s largest vendor of NEVs. Whereas EV adoption charges within the US have sagged, they’ve surged previous 50% in China and each second automotive bought within the nation is a NEV now.
Trump’s China Tariffs May Put Stress on Chinese language Economic system
Whereas Xpeng Motors and different Chinese language EV shares are increased at this time, analysts are cautious on the Chinese language financial system amid Trump’s tariffs. China achieved its 2024 GDP progress forecast of 5% and is but to set a goal for this yr. UBS however believes that the world’s second greatest financial system would broaden by solely about 4% this yr.
“Clearly the ten% tariff hike got here in shortly and decrease, however there stays a number of uncertainty on the timing and scale of further tariffs on China,” mentioned, Wang Tao, chief China economist at UBS Funding Financial institution.
She added, “We aren’t revising our 2025 baseline forecast of 4.0% GDP progress for China.” Her forecast assumes further tariffs of 60% on 1 / 4 of exports to the US and extra stimulus from the Chinese language authorities.
Notably, China supplied a flurry of stimulus measures final yr to spur its sagging financial system. The nation has hinted that it’s open to extra fiscal measures. In accordance with Goldman Sachs analysts, “We proceed to anticipate policymakers to announce extra expansionary fiscal insurance policies … with the augmented fiscal deficit widening by 2.6 share level of GDP in 2025.”
In the meantime, as a part of the stimulus measures final yr, China supplied a trade-in subsidy for electrical automobiles final yr which helped spur gross sales of firms like Xpeng Motors. It has renewed the subsidy this yr which is constructive for the nation’s automotive trade.
