XPeng Inc. Faces Stock Setback Amid Competitive EV Market

Stock Gains Slow Amid Warning Signs

XPeng Inc.-ADR XPEV has enjoyed a remarkable 66% increase over the past six months, capturing attention in the Chinese electric vehicle (EV) sector. Despite this impressive performance, some technical signals indicate that the stock’s upward momentum might be losing steam.

Following a surge in deliveries last December and ambitious plans with Volkswagen AG VLKAF VLKPF, XPeng’s stock has dipped 12% over the past month, raising concerns among investors as technical charts flash cautionary signs.

Chart created using Benzinga Pro

Currently valued at $12.39, XPEV stock is trailing behind both its 20-day ($12.55) and 50-day ($12.52) simple moving averages, which are considered bearish signals. The MACD (moving average convergence/divergence) stands at negative 0.15, while the RSI (relative strength index) measures at 50.25, reflecting caution as the stock approaches bearish territory.

On a more positive note, the 200-day moving average at $9.54 suggests potential for long-term growth, keeping the overall outlook bullish for now.

XPeng’s collaboration with Volkswagen could significantly impact its future. Together, they plan to set up more than 20,000 rapid charging points throughout 420 cities in China. This expansion not only strengthens XPeng’s presence domestically but also positions it as a competitor to Tesla in the EV charging market.

Last year, Volkswagen invested $700 million to acquire a 4.99% stake in XPeng, aiming to solidify its involvement in the Chinese EV scene. The two companies intend to introduce two new EV models for the Chinese market by 2026, indicating a serious commitment to innovation and growth.

XPeng also reported an impressive 82% year-over-year increase in deliveries in December, largely due to the success of its more affordable Mona M03 model.

With over 15,000 units sold, the Mona line is expected to drive sales volume, offering a more competitive price point than Tesla Inc‘s TSLA Model 3.

Despite these positive signs, the stock’s technical hurdles and intensifying competition may pose challenges for XPeng’s future performance.

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