Will XPeng Stock Ride On The EV Boom This Year?
Electric vehicle stocks have charged higher in 2020, and investors can’t seem to get enough of them. With Tesla’s (TSLA Stock Price) stock surging 720% in 2020, it was not surprising investors have been rushing into the space. They wanted to find the best electric vehicle (EV) stocks to buy. Investors were also gobbling up EV initial public offerings, fearing that they will miss out on the next big thing. Amongst them, the leading Chinese smart electric vehicle XPeng (XPEV Stock Report) had been a good one worth taking a closer look at. The company delivered 5,700 EVs in December 2020. This represented a 326% increase year-over-year and a 35% increase from November.
While it may be true that the recent weakness in XPeng has caused some investors to take XPEV stock out of their list, other investors are taking advantage of its recent dip to scoop up its shares before it goes north again. You will recall news of Apple (AAPL Stock Report) planning to build an autonomous EV called the iCar.
There appear to have some misplacements of fears that shook the EV market quite a bit. If you had a list of top EV stocks on your watchlist at that time, you would know that many EV stocks were in the red when the news broke.
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Solid Gains For Chinese Electric Vehicles
Chinese EV stocks were probably one of the best growth stories in the stock market in the past year. And there’s no question that Nio (NIO Stock Report) topped the list of best EV stocks to buy. While the company’s stock price has skyrocketed more than 1,200%, some experts believe that this could be just the beginning. As we finish a year like no other, Nio heads into the new year with EV sales soaring. Nio reports monthly record deliveries of 7,007 units in December, ending the year with a total delivery of 43,728 units.
Li Auto (LI Stock Report), like its fellow comrades Nio and XPeng, had a very strong finish to the year. This suggests that the Chinese EV sector remains robust going into 2021. The company delivered 6,126 EVs in December 2020, representing a monthly increase of 31.9%, ending the year with a total of 32,624.
According to a report from Deloitte, by 2030, China will account for 49% of the global EV market. With the broader trend painting to a huge growth of the EV industry in the coming decade, and the strong deliveries reported, it is not surprising investors will continue to look into the EV space for exceptional growth. With a strong showing by the notable EV names in China, it may be a validation of the claims made by Deloitte. If you ask me, any one of these trios looks like a good bet to me in the long run. But there are a few reasons why XPeng may be a stronger contender in the Chinese EV. Here’s why.
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New Development In The Autonomous Driving Technology Signals New Growth For XPEV Stock
XPeng is setting itself apart from its peers by leveling up its autonomous driving game. Sure, Luminar (LAZR Stock Report) is the latest to ride the wave of autonomous driving. Indeed, investors are clearly excited about the technology that helps make self-driving cars a reality. But as hyped as the autonomous driving industry could be, we can’t deny the fact that the potential is real. If you are not comfortable betting on pure-play lidar stocks working on autonomous driving like Luminar, why not consider XPeng?
The company recently unveiled a partnership with Chinese lidar company Livox to deploy lidar technology in Xpeng’s new production model in 2021. This is huge for the company considering it’s the world’s first mass-produced smart EVs equipped with lidar. And that would solidify Xpeng’s cutting-edge position in smart EV technology. In particular, Xpeng’s autonomous driving system, called the XPILOT, will see increased safety and ability to cover a comprehensive range of driving scenarios. If you believe that lidar is the future, XPEV stock could be a good buy. That’s especially if the company maintains its head start in this department.
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Does New Market Equal New Growth?
Recently, the company just delivered its first 100 XPeng G3 smart electric SUVs to Norway. This move marks Xpeng’s first market outside of China. The company is taking the lead among Chinese EVs to expand into other international markets. As part of XPeng’s global strategy, the company is reportedly planning to roll out its P7 in Europe within this year.
Of course, the Chinese market is still the bread and butter of the company’s business in the foreseeable future. Yet, the foray into Norway provides a foothold in Europe. That’s considering Norway’s leadership position in EV adoption in the region. CEO He Xiaopeng said:
“This week’s customer deliveries in Norway represent a key milestone in Xpeng’s aspirations to become a truly international smart EV brand. Our launch in Europe comes just as consumers are shifting in increasingly large numbers to more sustainable personal transport, and at a tipping point where governments around the world are stepping up their zero emission efforts.”
Bottom Line
It seems to me that the Chinese EV market is back on track with its strong deliveries. Even though XPeng is late to the party, it has been taking steps to stay ahead of the game. Certainly, there has been much optimism with XPEV stock. But investors have to note that it comes with a lot of price volatility with this one. After all, that is something that affects many of the top EV stocks in the stock market today. For this reason, if you can stomach such huge swings in your portfolio, XPEV stock may be a growth stock to consider for your portfolio this year.
On top of that, we also have to consider the fact that President-elect Joe Biden could be a major catalyst, too. After all, the president has already promised a $400 billion investment in clean energy, which includes electric vehicles. Who knows, XPeng’s next international strategy could be in the U.S.? Of course, this is all nothing but speculation. But if you believe in the Chinese EV market and you like the sleek design and performance of XPeng cars, would you take a chance on XPEV stock? That’s your call.
