Leading NEV Player With Strong Autonomous Driving Technology Capability

Equity Analyst

Vincent Sun

Vehicle Deliveries

Gross Profit, Operating Income, and Net Income as a percentage of Revenue

Gross Margin

Operating Margin

Profit Margin

Margins

An operating expense is an expense a business incurs through its normal business operations. Often abbreviated as OPEX.

Research and development

Selling, general and administrative expenses

Other income

Operating Expenses

Year over year growth in Revenue and Operating Expenses.

Revenue Y/Y

OpEx Y/Y

Growth

Shares outstanding refer to a company's stock currently held by all its shareholders, including share blocks held by institutional investors and restricted shares owned by the company's officers and insiders.

Outstanding Shares

Market Cap

Also known as Price/Sales Ratio. Calculated using Average market cap for the quarter / Annualized quarterly revenue.

Revenue Multiple

XPeng is a leading electric vehicle, or EV, manufacturer in China, targeting the midrange to high-end segment and tech-savvy consumers. It is mass producing five pure electric models: the G3/G3i compact sport utility vehicle, or SUV; P7 midsize sedan; P5 compact sedan; G9 midsize SUV, and G6 compact SUV. Retail prices of the current model portfolio range from CNY 150,000 to CNY 350,000 for popular trims, which offer a driving range of roughly 460-700 km. For its new model pipeline, XPeng plans to launch 2-3 new cars each year from 2023 onward.

XPeng has put a lot of effort into research and development for its in-house developed full-stack autonomous driving technology, which has become a key selling point for its models. The Xpilot software is China’s first Level 3 autonomous driving system, featuring a navigation guided pilot for highway driving and advanced automated parking functions.

We see rapid new energy vehicle, or NEV adoption in China, being stimulated by regulatory push and improving charging infrastructure, among others. By 2025, we expect passenger NEVs to account for more than 40% of total passenger car sales, from 16% in 2021. Riding on the vehicle electrification tailwind, we forecast XPeng’s vehicle delivery to reach over 270,000 units in 2025 from 120,757 units in 2022, taking about 2% share in China’s passenger NEV market. 

XPeng is still loss-making, but we forecast improving vehicle sales profit driven mainly by increased vehicle deliveries and lower unit production cost. As such, we expect it to turn profitable in 2026 and generate positive free cash flow starting the same year.

Its contract manufacturing arrangement with Haima Auto expired in 2021, so production was relocated to XPeng’s own Zhaoqing plant in Guangdong with annual designed capacity of 100,000 units. The firm targets to expand Zhaoqing capacity to 200,000 units this year and is also building two additional production plants in Guangzhou and Wuhan, each with annual designed capacity of 100,000 units. By 2023, XPeng would have total production capacity of 400,000 units, with a maximum of 600,000 by adding shifts.

Business Strategy & Outlook

While we like XPeng’s current technology leadership, we are not convinced yet that this will allow it to maintain premium pricing over its competitors’ products over at least a 10-year period. As such, we think XPeng has no moat. Generally, we see two moat sources in the auto sector from intangible assets such as brand equity, best exemplified by Ferrari, and from cost advantage. At this stage we do not yet see either moat source to be retained by XPeng. 

We expect technology to play an increasingly important role for NEV makers to attract consumers from internal combustion engine, or ICE, vehicles and to differentiate themselves in competition among NEV models. XPeng leads its domestic peers in developing full-stack technology. Capitalizing on in-house research and development capabilities, the company rolled out Xpilot 3.0 through over-the-air firmware updates in 2021. Xpilot 3.0 is China’s first Level 3 autonomous driving system, featuring navigation guided pilot, or NGP, for highway driving and advanced automated parking functions.

We like XPeng’s proprietary autonomous driving algorithm and data capability. Instead of relying on third-party software suppliers for autonomous driving algorithms like other original equipment manufacturers, or OEMs, XPeng had dedicated a great amount of resources and effort in related R&D since inception. It is currently the only Chinese NEV maker that has developed full-stack proprietary autonomous driving software. Leveraging its in-house development approach, Xpilot is tailored to specific road conditions in China, enabling better customer experience and higher adaptiveness to unique driving behavior, compared with solutions from global OEMs and autonomous driving suppliers.

The first-mover advantage also benefits XPeng in terms of road-testing data accumulation for algorithm iteration, which in turn will enhance its autonomous driving software capability. As a result, the improving technology experience would help XPeng sell more EVs for data and corner (unusual) case collection, which forms a closed loop for faster algorithm updates.

However, as the industry becomes increasingly competitive, it is still uncertain whether the technological lead that XPeng has will be retained over the long run to underpin a moat. Most of the elements of the technological advantages are likely to be replicated with time, given we are still in the early days of the industry. Legacy ICE manufacturing is highly competitive and capital-intensive. We expect the same in the NEV market over time. In addition, the company is still burning cash and we expect it is likely to do that for at least a couple more years, so the risk for the need to raise additional capital for capital-intensive investment is high, in our view.

None

Economic Moat

XPeng

XPeng, Inc. designs, develops, manufactures, and markets smart electric vehicles. It produces environmental friendly vehicles, namely SUVs (the G3), and a four-door sports sedan (the P7). The company was founded by Xiao Peng He, Heng Xia, and Tao He in 2015 and is headquartered in Guangzhou, China.

Earnings data Q3 2023

Revenue

Cost of revenue

Gross profit

Operating expenses

SG&A

Other

Operating income

EBITDA

Net income

Earnings per share

Total assets

Current assets

Cash & equivalents

Receivables

Inventory

Non-current assets

Net PPE

Intangibles

Total liabilities

Current liabilities

Short term debt

Income tax payable

Non-current liabilities

Long-term debt

Total equity

Stockholders equity

Minority interest

Total liabilities & equity

Total debt

Net debt

Book value per share

Cash from operations

Funds from operations

Change in working capital

Cash from investing

Capital expenditure

Purchase/sale of investments

Purchase/sale of business

Other sources

Cash from financing

Change in stock

Change in debt

Cash dividends paid

Cash from other sources

Net change in cash

Free cash flow

Li Auto Inc.

Tesla rivals in China have all launched new and more affordable models.

Tesla Rivals In China Tee Up To Report EV Sales

GUANGZHOU, China--(BUSINESS WIRE)--XPENG (NYSE: XPEV and HKEX: 9868), a leading smart electric vehicle company, today announced that it has shipped 750 vehicles for the Israeli market, marking this the largest single batch of export this year. The batch left the Guangzhou Port after the conclusion of a ceremony that included local customs officials and port representatives. “We're very grateful for the support of our partners and the local customs officials as we take a significant step toward.

XPENG Shipped 750 Vehicles to Israel, Coming Closer to G9 and P7's Launch in October

First Trust Nasdaq Transportation ETF

Joby Aviation

As farfetched as it may sound, flying cars could be in the skies by 2025. In fact, after impressing crowds at the Detroit Auto Show, Alef Aeronautics may be one step closer, which could help create big opportunities for flying car stocks.

Don't Miss the Boom: 3 Flying Car Stocks Set to Explode Higher

Blink Charging

Fisker

Lucid Group

Rivian Automotive

Tesla

The electric vehicle market is set to accelerate. In fact, according to iShares, global EV sales could soar to about 27 million by 2026 from 10.5 million just last year.

September's 7 Most Controversial EV Stocks: Buy or Bail?

Alibaba

Baidu

Bilibili

JD.com

KraneShares CSI China Internet ETF

Tencent Music Entertainment Group 

U.S.-listed shares of Chinese internet stocks were rising Friday, snapping back after two sessions of pressure.

Alibaba and other Chinese shares bounce back as China reportedly looks to re-energize its stock market

Chinese electric vehicle (EV) stocks are up on Friday as investors react to reports of changing regulations in the country. According to the latest reports, Chinese regulators are considering easy up on certain restrictions.

Why Are Chinese EV Stocks NIO, XPEV, LI Up Today?

Ford Motor Company

General Motors

Lithium Americas

One of my favorite industries to write about is the electric vehicle industry. Not only because it promises a cleaner and greener future for our coming generations but also because it is all about the latest technology and innovation.

The 7 Most Undervalued EV Stocks to Buy in September 2023

XPeng's (XPEV) remarkable rally makes one wonder whether the time is right to cash in on this rising EV star of China, or are investors in for even greater gains ahead.

XPeng (XPEV) Doubles in 6 Months: Ripe for Profit Booking?

BYD Co Ltd

Electric vehicles (EVs) are revolutionizing the global automotive industry. And, investing in EV stocks means tapping into a booming auto market.

3 EV Stocks With 10x Potential Over the Next 10 Years

Archer Aviation

From planes to trains to automobiles, every innovation in human movement has opened new doors and new industries. Some of the most innovative companies of today are now bringing in flying cars, promising to once again revolutionize the way we travel around.

Sky's the Limit: 3 Stocks Ready to Rocket as Flying Cars Surge

China lashed out at the EU after the bloc launched an investigation into electric-vehicle subsidies. It's growing into a spat and Tesla looks favorable.

China Hits Back at Europe Over EV Probe. Why Tesla, NIO, Xpeng Stocks Are Rising.

Chinese EV stocks are down on Wednesday as investors react to news from the European Union (EU). The big news here is the EU considering the possibility of adding anti-subsidy tariffs to Chinese imports.

Why Are Chinese EV Stocks NIO, XPEV, LI Down Today?

Xpeng Inc (NYSE:XPEV) and Chinese EV rivals NIO Inc (NYSE:NIO) and Li Auto Inc (NASDAQ:LI) were in reverse after the European Union launched an ‘anti-subsidy' investigation into Chinese electric vehicle makers. Xpeng stock was down a little more than 3% in early deals,  whilst NIO Inc (NYSE:NIO) was down 2.2% at $10.34 whilst Li Auto Inc (NASDAQ:LI) fell 2.4% at $39.72.

XPeng, Nio and Li all fall as Europe launches Chinese EV investigation

The European Union is launching an investigation. The move looks like a bid to shore up legacy car makers such as Volkswagen, Mercedes-Benz, and Stellantis.

Tesla Wins as Europe Readies Crackdown on Chinese EVs. NIO, XPeng Stocks Plunge.

Chinese luxury electric vehicle maker Xpeng stock published its delivery numbers for August, indicating that it sold a total of 13,690 vehicles.

Xpeng Is Lagging Its Peers. What's Next For The Stock?

Albemarle

Global X Autonomous & Electric Vehicles ETF

Defiance Pure Electric Vehicle ETF

Over the next decade, global leaders want to put millions of electric vehicles on the roads. President Biden, for example, wants 51% of all new autos to be electric by 2030.

7 Millionaire-Maker EV Stocks to Hold Through Thick and Thin

Bayerische Motoren Werke AG

Geely Automobile Holdings Ltd

Mercedes-Benz Group AG

Polestar Automotive Holding UK PLC

Volkswagen AG

Traditional automakers are looking to boost the software and driverless features of their cars in a bid to catch up to Tesla and appeal to Chinese consumers.

Seat massages, smartphones and driverless features: Automakers turn to tech to take on Tesla

Aptiv

Aurora Innovation

Mobileye Global Inc

Uber

With self-driving autos likely to become the next big trend, investors may want to keep an eye on the best autonomous driving stocks. For one, as noted by Investorplace contributor Josh Enomoto, research firm Mordor Intelligence says the self-driving market would be worth $33.48 billion in 2023 and grow at a compound annual rate of 22.25% in the next five years.

The 7 Best Autonomous Driving Stocks to Buy Now: September 2023

The electric vehicle (EV) market is rising, with projected revenues reaching $292.1 billion this year. This burgeoning industry is anticipated to grow at a compound annual growth rate (CAGR) of 6.38% from 2023 to 2028, boosting the market volume to approximately $398.0 billion.

Turbocharging Your Portfolio: An In-Depth Analysis of Investment Opportunities in China's EV Market

Chinese companies from BYD to Leapmotor launched electric vehicles for international markets while Xpeng announced plans to expand into Germany.

Chinese electric carmakers ramp up push overseas, setting up clash with U.S., European auto giants

Xpeng Inc (NYSE: XPEV) just announced plans of expanding its footprint in Europe. Its shares will likely open in the green on Tuesday.

Xpeng reveals plans of expanding its footprint in Europe

Chinese manufacturers are years ahead of European firms in the development of cheap electric vehicles, Renault boss Luca de Meo has claimed. Echoing murmurings at the IAA Mobility conference in Munich, de Meo signalled the likes of BYD, Nio Inc and Xpeng Inc (NYSE:XPEV) had got the jump on European rivals in building such models, with their cheaper offerings set to pose a challenge.

Chinese electric vehicle makers ‘a generation' ahead – Renault boss

BYD and XPeng are showing off new electric vehicles for the European market at the IAA Mobility event in Germany. Tesla is also appearing for the first time in ten years.

BYD, XPeng Stocks Rise. Chinese Brands Face Off With Tesla at Key Auto Show.

Chinese electric vehicle maker Xpeng plans to expand into more European markets, including Germany, Britain and France in 2024, president Brian Gu told reporters on Monday at the IAA Mobility motor show in Munich.

Xpeng says it plans to expand into more European markets next year

MUNICH, Germany--(BUSINESS WIRE)--XPENG Motors (“XPENG” or the “Company,” NYSE: XPEV and HKEX: 9868), a leading Chinese smart electric vehicle (“Smart EV”) company, today shared updates on its international business at IAA Mobility, including the news of its entrance into the German market in 2024. Hey Deutschland After three years of operations and positive reviews in Europe, XPENG is now preparing to enter one of the world's most competitive automotive markets. "Today represents an important.

News for XPeng Stock (XPEV)