Xpeng Hits Record Vehicle Deliveries Amidst Competitive Chinese EV Landscape

Chinese luxury electric vehicle manufacturer Xpeng (NYSE:XPEV) has set a new monthly delivery record, sending 23,917 vehicles to customers in October. This figure represents a 20% increase from the previous year and a 12% rise since September. For the year, Xpeng’s total deliveries have reached approximately 122,500 units, marking a 21% growth compared to the same period last year.

In comparison, Li Auto (NASDAQ:LI), the leading newcomer in China’s EV market, recorded 51,443 vehicle deliveries in October 2024, reflecting a robust year-over-year growth of 27.3%, despite experiencing a decrease from 53,709 deliveries in September. Nio also showed strong performance with 20,976 vehicles delivered in October, showcasing a significant year-over-year increase of 30%, although its numbers remained stable compared to September.

A major driver of Xpeng’s growth has been its emerging sub-brand, Mona. The Mona M03, the brand’s first model, sold over 10,000 units in October, achieving this milestone for the second consecutive month. Priced at approximately RMB 119,800 (around $17,000), the Mona M03 is positioned significantly lower than Xpeng’s other models, and represents roughly half the cost of Tesla’s Model 3 and Model Y.

Over the past four years, the volatility of XPEV stock has been notable, with annual returns fluctuating more dramatically than those of the S&P 500. In 2021, the returns were at 18%; however, they plummeted to -80% in 2022 before rebounding to 47% in 2023. In contrast, the Trefis High Quality (HQ) Portfolio, which consists of 30 stocks, showed less volatility and outperformed the S&P 500 throughout the same timeframe. This raises questions about whether XPEV will face challenges akin to the downturns it experienced in 2021 and 2022, underperforming the S&P again— or if it might recover in the coming year.

Xpeng shares currently trade at about 1.9 times their projected revenues. While this valuation may seem reasonable, it exceeds that of competitors Nio and Li Auto, although it remains substantially lower than Tesla’s valuation of 7 times forward revenues, despite Tesla forecasting flat revenue growth this year. For in-depth analysis, readers can explore Nio, Xpeng & Li Auto: How Do Chinese EV Stocks Compare?, which details how Xpeng stands against its rivals.

Despite broader economic challenges, the Chinese electric vehicle market remains robust, with new energy vehicle sales constituting around 50% of all auto sales in the country. The premium segment in particular—vehicles priced over $30,000—is experiencing growth, positioning Xpeng favorably as it focuses on higher-end models. Additionally, the Chinese government’s new stimulus package aims to stabilize the economy through interest rate reductions and fiscal support, potentially enhancing consumer spending and driving EV demand further.

Xpeng is also recognized for its advanced automation and assisted driving technology within the Chinese market. The company claims to be the only local automaker providing Advanced Driver Assistance Systems (ADAS) that function without reliance on HD maps or expensive LiDAR sensors, making their technology more accessible. Its Xpeng Navigation Guided Pilot system achieved an impressive 86% penetration rate in urban driving among monthly active users in October. In pursuit of growth, Xpeng has also embarked on an ambitious international expansion plan, aiming to enter over 60 countries by 2025. Recently, the company officially introduced its G9 and G6 models in the UAE, marking its entry into the Middle Eastern market. This blend of innovative technology and a strategic market presence could significantly enhance Xpeng’s revenue and profit prospects.

[1] Returns as of 11/4/2024
[2] Cumulative total returns since the end of 2016

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