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Globe and Mail
28-05-2025
- Automotive
- Globe and Mail
Xpeng Motors Stock Forecast: Should You Buy the Dip in XPEV or Panic Sell Amid Price War?
While Xpeng Motors (XPEV) is up over 65% for the year to date, it has looked weak in recent days and has come off its highs. The company's Q1 2025 financial performance was quite impressive, but concerns over regulatory scrutiny over sales of new cars as 'used cars' in the second-hand market by some automotive companies in China and an escalating price war in China have pressured XPEV stock. In this article, we'll discuss whether you should buy the dip in the stock or steer clear. Xpeng Motors Stands Out Due to Strong Execution Xpeng Motors has impressed with its strong execution over the last few months. The company has delivered over 30,000 vehicles for six consecutive months, and its Q2 guidance implies that the run rate will be sustained in May and June as well. Xpeng Motors' Mona M03 has been a success story, and the model's cumulative sales have surpassed 100,000 units in eight months since its launch. The company's P7+ also achieved the milestone of 50,000 cumulative deliveries in the first five months of its launch. The strong growth in deliveries has resulted in economies of scale, and its gross margins have expanded for seven consecutive quarters, reaching a record high of 15.6% in the March quarter. The company is still posting a loss, but its net loss more than halved to $0.09 billion in Q1, which was the lowest in five years. The company has also turned a corner on free cash flow, and the metric surged above $400 million in Q1. Xpeng Motors Expects Strong Growth in 2026 Also Xpeng Motors expects its sales to more than double this year and is optimistic about posting a net profit in the final quarter of the year, while generating 'substantial free cash flow for the entire year.' The company expects its gross margin to push toward the high teens in the second half of the year, amid continued cost-cutting efforts. Xpeng Motors is set to launch several new models over the next year, which will help drive its deliveries in 2026 and beyond. Among others, it plans to launch new models in the Mona series, which is in the budget range. Xpeng Motors has developed its custom Turing chip, whose production has already commenced. The company will use these chips in its cars, which will help it lower costs and also enhance its autonomous driving capabilities. XPEV is leveraging its lead in autonomous driving and working on humanoids – a strategy similar to that of Tesla (TSLA). International expansion is another growth driver for Xpeng Motors. Last year, it sold 20,000 cars in global markets and expects the volumes to double in 2025. The company listed Europe, the Middle East, and Southeast Asia as its focus global markets for this year. China's EV Price War Is Worsening China boasts of dozens of electric vehicle (EV) companies, some of which happen to be listed stateside. The country is also home to BYD (BYDDY), which is the world's largest seller of new energy vehicles (NEVs), and looks set to dwarf Tesla's annual battery electric vehicle deliveries this year. While there has been a price war in China for the last few years, there are signs that things might worsen further as market leader BYD has also cut prices on multiple models. After the price cuts, BYD's seagull hatchback will be priced at just $7,780 in China. The company is looking to grow its deliveries to 5.5 million this year, as compared to just about 4.3 million last year, and the price cuts should help it meet the target. Notably, while BYD has aggressively slashed prices for lower-end cars, the premium lines have been spared from price cuts that will run until the end of June. So far, Xpeng Motors hasn't responded to the cuts, but the company might need to react to pricing strategies of its competitors, especially if BYD extends the scope of its cuts beyond June. While a price war is seldom a positive, Xpeng Motors should be able to tackle the headwinds better given its relatively strong financial position, as it had a cash pile of over $6.2 billion at the end of March. Also, the company has a technological advantage over most of its peers and offers a good value proposition with advanced self-driving features. From a valuation perspective, the stock trades at a next 12-month enterprise value-to-sales multiple of 1.46x, which is similar to what it has averaged over the last three years. However, after its impressive execution over the last few months, the stock has earned the right to trade at premium valuations. Overall, given the stock's positive long-term fundamentals, I won't panic sell XPEV amid the price war and will instead add to my existing positions if the stock comes under pressure. XPEV Stock Forecast Wall Street analysts are also reasonably bullish on XPEV, and it has a consensus rating of 'Moderate Buy' from the 14 analysts covering the stock. The stock has a mean target price of $22.83, which is 17.1% higher than the current price.
Yahoo
15-04-2025
- Automotive
- Yahoo
BYD Leads China's EV Market in Weekly Registrations as Nio Surges 94%
China registered 351,000 passenger vehicles in the week ending April 13, up 3.9% from the previous week, according to data from CarNewsChina. Of these, 186,000 were new energy vehicles, bringing the electric vehicle penetration rate to 53%, an increase of 2.9 percentage points. Warning! GuruFocus has detected 4 Warning Signs with NIO. BYD registered 53,400 vehicles during the week, up 18.4% from 45,100 the week before. In the first two weeks of April, BYD registered 98,500 vehicles in China. The company, which sold 4.3 million vehicles in 2024, is targeting approximately 5.5 million deliveries this year. Its premium brand Denza registered 3,000 vehicles, a 15.4% increase from the previous week. Tesla (TSLA, Financials) reported 5,400 vehicle registrations in the week, up 50% from 3,600. In March, Tesla China delivered 78,828 vehicles, including domestic sales and exports, down 11.5% from a year earlier but more than doubling February's total. Li Auto (LI, Financials) followed with 7,200 registrations, up 16.1% from 6,200. Year-to-date April registrations reached 13,400 units. The company, which sold over 500,000 vehicles in 2024, has delayed the release of its next all-electric model after poor reception of its Li Mega minivan. It aims to sell 700,000 vehicles in 2025. Xpeng (XPEV, Financials) registered 6,700 vehicles, a 10.7% decline from the prior week. The company delivered 33,205 vehicles in March and has surpassed 30,000 monthly deliveries for five consecutive months, aided by its Mona M03 sedan. The model reached 100,000 cumulative units in under eight months. Xiaomi recorded 6,300 registrations, up 23.5% from the week before. It has delivered 11,400 units in the first half of April and increased its 2025 target from 300,000 to 350,000 vehicles. The company sold 135,000 units in 2024. Leapmotor reported 6,400 registrations, up 18.5%. The brand recorded 11,800 units for the month to date. Deepal logged 4,340 registrations, a 5.9% increase. In the first two weeks of April, it recorded 8,440 registrations. Nio (NIO, Financials) saw a sharp weekly gain, with 3,500 units registered, up 94.4% from 1,800 the previous week. The company ramped up incentives, including five years of free battery swaps. Nio Group, which includes Onvo and Firefly, registered 4,200 units, up 68% from the week prior. Onvo recorded 730 units. Firefly is expected to launch its first model on April 19. Nio is targeting 440,000 deliveries in 2024, with half from Onvo. Aito registered 3,200 vehicles, a 33.3% drop from the previous week. Zeekr reported 2,300 registrations, down 14.8%. Avatr logged 1,500 units, up 15.4%. Weekly EV registration data remains available through CarNewsChina despite recommendations by the China Association of Automobile Manufacturers to discontinue such releases, citing concerns over market disruption. This article first appeared on GuruFocus. Sign in to access your portfolio
South China Morning Post
02-04-2025
- Automotive
- South China Morning Post
From BYD to Nio, Chinese EV makers power ahead thanks to subsidies and tax incentives
Leading Chinese electric-vehicle (EV) makers reported strong sales growth in the first quarter of this year, as they continued to throttle rivals who manufacture petrol-powered cars. Advertisement Top EV companies – from BYD, the world's largest electric-car assembler , to Geely's Zeekr – posted year-on-year increases for the first quarter on Tuesday, alleviating some concerns about economic sentiment. Guangzhou-based Xpeng was the big winner in the first quarter as its deliveries surged 330.8 per cent from a year earlier to 94,008 units. Its mass-market Mona brand attracted thousands of young consumers who were eager to use the company's indigenous driver assistant system. The Mona M03, priced at 119,800 yuan (US$16,733), poses a serious challenge to Tesla because it offers similar smart features to the Model 3 sedan – at around half the price. BYD's first-quarter deliveries rose 59.8 per cent to more than 1 million vehicles, while Zeekr sales jumped 21.1 per cent to 114,011 units. Advertisement Total EV delivery numbers for the first quarter are not yet available, but Cui Dongshu, general secretary of the China Passenger Car Association (CPCA), told the China EV100 forum in Beijing on Sunday that the industry group predicted the penetration rate of electric cars would stand at 56 per cent. The EV category, which includes pure-electric and plug-in hybrid vehicles, overtook petrol-powered cars on the mainland in June.
Yahoo
07-02-2025
- Automotive
- Yahoo
Xpeng outsells Li Auto in January to become top seller among EV startups
Xpeng dethroned Li Auto as China's largest electrified vehicle startup in January, with sales surging 268 percent from a year earlier to 30,350 on demand for its two newest models. The Mona M03, a compact full electric sedan which debuted in Xpeng's China showrooms on Aug. 27, generated sales of more than 15,000 last month, the company said. Deliveries of the P7+, a midsize electric sedan, topped 10,000 last month. It went on sale Nov. 7. Xpeng's China sales have now topped 30,000 three straight months. RELATED ARTICLE: Chinese EV maker Xpeng to break even in 2025, president says Li Auto, the top seller among EV startups in December, saw its January deliveries dip 4 percent year over year to 29,927. The decline reflects the timing of the Lunar New Year holiday, which began Jan. 28. Last year, it started Feb. 10. Despite fewer working days compared with the same month last year, two other major Chinese EV startups ― Leapmotor and Nio ― racked up impressive sales growth in January. Leapmotor's deliveries soared 105 percent from a year earlier to 25,180 last month while Nio sales jumped 38 percent to 13,863. December sales totaled 58,513 at Li Auto, 42,517 at Leapmotor, 36,695 at Xpeng and 31,138 at Nio. In 2024, the four largest EV startups were Li Auto, with sales of 500,508; Leapmotor, with 293,724 deliveries; Nio, with sales of 221,970; and Xpeng, with 190,068 deliveries. Li Auto posted a profit for the first time in the first quarter of 2023 and Leapmotor became profitable in the fourth quarter of 2024. Xpeng and Nio have yet to break even.
