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XPeng Inc.: A Reawakening

Apr. 09, 2021 10:09 AM ETXPeng Inc. (XPEV)LI, NIO, TSLA12 Comments
Mercury Research profile picture
Mercury Research


  • Valuation is middling but not overvalued like in the past.
  • Recent announcement of capacity expansion in Wuhan lends better operational and sales visibility.
  • Company could breakeven and finally reach positive profits soon; major improvements seen in operating margins.
  • Feared chip shortage (i.e. supply disruption) was not a disaster, deliveries are still strong.

exterior of Xpeng store. A Chinese electric car brand
Photo by Robert Way/iStock Editorial via Getty Images


The stock price of NYSE:XPEV has been converging with the performance of the S&P 500 since March 2021, as compared to its massive outperformance in 4Q2020. This could be view positively or negatively. On the bright side, this suggests that price performance would

This article was written by

Mercury Research profile picture
Mercury Research has tracked the financial markets through several cycles, with prior experience in multi-asset funds’ strategies. The core methods focus on extracting value through fundamental analysis, technical analysis and macro financial markets indicators. These skills are applied across multiple strategy styles and markets with absolute return targets. Formally trained PhD in economics and finance.

Analyst’s Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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Comments (12)

lsmtihcom profile picture
This article is very weak. There are alot more issues to discuss. The year over year growth is not what matters now, what matters is why Q1 has not been growing over Q4 2020 sales.

You have also missed the upcoming product launches that will be shown at Shanghai auto show soon. And what about discussion on the ADAS features versus Tesla. What about a discussion on entry to Europe? (or not).

And for competition, the Chinese EV maker everyone forgets is BYD. But companies like SAIC are also adding their own BEV models soon.

I am actually shocked that the P7 is selling so poorly relative to the Model 3. It seems like a much more compelling value, yet there is little traction for increased sales since Q4 2020. Is this due to manufacturing limits or consumer demand? Is this a temporary bottleneck or a long term limit?
eduso profile picture
@lsmtihcom I agree -- you have raised solid questions. I am a former financial controller with focus on manufacturing.

What is the most compelling in my view is that Xpeng already opened its first proprietary factory in June 2020 with capacity of 100 000 cars per year. In Sept. 2020 they announced the building of a new factory, then in April 2021 a third one (also 100 000 capacity). I don't know when the 2. and 3. factories should be up and running (min. one year) probably at least 300 000 per year capacity altogether i.e. around 25 000 cars per month (currently 5-7 k).

Having a factory of its own is a huge value, as through controlling manufacturing processes Xpeng excercises a much better control overall and a better integrated development - NIO has admitted their blunder already by planning to build their first factory soon. The same idea lies behind working on Xpeng in-house chips.
In my view NIO keeps making mistakes in a row-- battery-swapping is another blunder (8-10k USD batteries min. 3x number!), and no progress in auto-pilot feature (light years away from 3.0) -- branding alone may not be enough in the long run. LI is no competitor at all as of now.

To me it seems that Xpeng is the only truly heavy-weight tech car company in China (now) beating Tesla already in self-navigating. Over 50% of staff are in development...

The first P7 has been spotted in Norway.
Capitalism Is Freedom profile picture
@lsmtihcom "I am actually shocked that the P7 is selling so poorly relative to the Model 3." Why? The Chinese love Tesla. They see the company as the real innovator of EV technology...As someone who has worked in China, there is prestige in owning a Tesla...they see it as a product of American ingenuity (Musk is an American now). Living in a state run one party state, they trust American and European products more. I own XPEV stock, but I don't trust their intervention claims one bit.
Rivals are not only NIO and LI. The big Chinese car brands are also making some nice EVs.
Preawakening == sleeping!?
necto profile picture
long NIO , XPEV , JD.
all overpriced
It’s time to buy and remember chip shortages will continue for at least 3 to 6 months
But still I think it good buy now
Buy more and accumulate for the long run✅
Arvinpinal profile picture
I am also holding XPEV. Add more shares and expecting to see $70 ~ $100 around the end of the year.
It's a nice article with strong providing arguments. Definitely, I'll stay long in XPEV
XPEV & NIO holding and adding when I can
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