With its partnership with VW and advances in self-driving technology, is Xpeng stock undervalued at $9?

Chinese luxury electric car maker Xiaopeng’s delivery numbers were mixed in February, with EV sales for the month at 4,545 units, down 44.9% from January and 24% from the same period last year. The decline wasn’t all that surprising given that car sales are typically slow in January and February as China extends the Lunar New Year holiday, impacting manufacturing and sales. Last year’s holiday was from January 21st to 27th, but this year it will be from February 10th to 17th. In comparison, Nio delivered 8,132 vehicles in the same month, down 19% from January and 33% from the same period last year. Li Auto sold his 20,251 units, down 35% compared to January, but up about 22% year-on-year.

XPEV stock has suffered an 80% plunge from its $45 level in early January 2021 to around $9 today, while the S&P 500 index has risen about 35% over the past three years. However, the decline in XPEV inventories is far from consistent. The stock returned 18% in 2021, -80% in 2022, and 47% in 2023. By comparison, the S&P 500 returned 27% in 2021, -19% in 2022, and 24% in 2023.that XPEV underperformed S&P In 2021 and 2022. actual, Consistently outperforms the S&P 500 – Good times and bad times – The past few years have been difficult for individual stocks. Leading companies in the consumer goods sector such as AMZN, TSLA and TM, as well as mega cap stars such as GOOG, MSFT and AAPL are eligible. In contrast, the Trefis high-quality portfolio, which includes a collection of 30 stocks, Outperformed the S&P 500 every year over the same period. why is that? As a group, Headquarters portfolio stocks carried less risk and delivered better returns compared to the benchmark index. It’s not been a roller coaster ride, as evidenced by the performance metrics of our corporate portfolio. Considering the current uncertain macroeconomic environment of high oil prices and rising interest rates, XPEV is likely to face a similar situation in 2021 and 2022. Underperform the S&P Will it recover in the next 12 months?

There are concerns about global demand for EVs, with many mainstream automakers expecting demand to stagnate and scaling back their electrification targets. For example, Mercedes-Benz has rolled back its goal of becoming fully electric by 2030 and now estimates that only 50% of its total sales will be EVs. Similar production cuts were seen at Ford and other companies. China’s EV market is expected to see double-digit growth this year, but competition and price wars are intensifying, weighing on Xpeng. In the third quarter, the company posted its biggest net loss since going public, while its vehicle gross profit margin fell 6.1% from 11.6% a year earlier. Last year, Xpeng partnered with Volkswagen and announced plans to jointly develop two mid-sized VW-branded EVs under a strategic partnership. The two companies announced last week that the first vehicle they plan to jointly develop will be an SUV, and that they will jointly procure parts for it. The move to jointly source parts could help reduce costs for Xpeng, given that VW has invested in strengthening its EV supply chain in recent years. VW was China’s best-selling car brand until 2022. Xpeng is also considered a strong player in the self-driving software space. Last month, the company announced that the XPeng Navigation Guided Pilot feature, which enables self-driving in some scenarios, will be available on every road across China. This product was initially available only for highway driving scenarios. Check out our analysis. Nio, Xpeng, Li Auto: How do Chinese EV stocks compare? Let’s take a closer look at how Xpeng’s stock compares to rivals Li Auto and Nio.