The electric vehicle story shows no signs of slowing.
In fact, it could easily be one of the hottest opportunities of the New Year. To date:
- Tesla (NASDAQ:TSLA) ran from a 2020 low of $84.34 to a high of $694.21
- Nio Inc. (NYSE:NIO) ran from $4.10 to $48.38
- Li Auto (NASDAQ:LI) ran from $15.10 to $29.06
- Workhorse Group (NASDAQ:WKHS) ran from $2.96 to $21.27
- General Motors (NYSE:GM) ran from $36.11 to $41.84
While each could see further upside on accelerating EV demand, we’re also being offered opportunity with XPeng (NYSE:XPEV) on a pullback. After racing from a November low of $20 to nearly $75, the XPEV stock dipped to find support around $41.86.
I’d buy the XPEV stock here with a near-term target price of $75 on key catalysts.
XPEV Stock Rides EV Boom
By 2030, the world could see up to 125 million EVs on the road, says CNBC, with the U.S., Europe and China pushing for a greener future. According to a report from Deloitte, by 2030, China will account for 49% of the global EV market. Europe will account for 27%. The U.S. will account for 14%. The firm also notes that China currently dominates the current electric vehicle market.
In the U.S., California Gov. Gavin Newsom just signed an executive order that will ban the sale of gas-powered passenger cars in the state starting in 2035. Wedbush Securities analyst Dan Ives says China could see eye-popping demand for EVs in 2021 and 2022.
We also have to consider that President-elect Joe Biden could be a major catalyst, too. In fact, he’s already promised a $400 billion investment in clean energy, which includes electric vehicles. Biden has also said he wants to support EVs with half a million new charging outlets by the end of 2030.
In short, you’re being offered big opportunity here.
Norway Offers Gateway Into European Market
The company just delivered its first 100 XPeng G3 smart electric SUVs to Norway.
While the domestic Chinese market is still the company’s primary customer base, Norway gives it a foothold in a mature European EV market. This is a major milestone for the company in becoming an international EV brand, says CEO He Xiaopeng:
“This week’s customer deliveries in Norway represent a key milestone in Xpeng’s aspirations to become a truly international smart EV brand. Our launch in Europe comes just as consumers are shifting in increasingly large numbers to more sustainable personal transport, and at a tipping point where governments around the world are stepping up their zero emission efforts.”
Already Seeing Record Delivery Numbers
In November 2020, the company delivered 4,224 vehicles, a year-over-year increase of 342%. For full-year 2020, it delivered 21,431 vehicles, a YoY increase of 87%.
Even more impressive, in its most recent quarter, total company revenues came in at $293.1 million, a more-than-threefold YoY increase. Gross margins improved to 4.6% in the third quarter from negative 10.1% last year.
For Q4, XPeng expects to deliver about 10,000 vehicles. Total revenue is expected to jump about 244% year over year, as well.
Bottom Line on XPeng Stock
With plenty of global demand, EV companies could see another exemplary year ahead. With Biden heading to the White House, on top of demands for a greener future rising from the U.S., Europe and China, there’s no question the EV space will remain hot. Add in the record deliveries and earnings growth, those factors could send XPeng stock higher in 2021.
Use the latest dip in XPEV stock as an opportunity. By this time next year, it could be well above $75 a share.
Again, investors are being offered big opportunity with EVs. It could easily be the biggest story of New Year 2021.
Ian Cooper, an InvestorPlace.com contributor, has been analyzing stocks and options for web-based advisories since 1999. As of this writing, Ian Cooper did not hold a position in any of the aforementioned securities.
