XPeng (NYSE:XPEV) is enjoying growing demand and is expanding across borders, making the most of the opportunity, but it really hasn’t been reflected in XPEV stock.
The EV manufacturer had a wonderful 2020, but volatility hit in January. XPEV stock went from $56 in January to $26 in March.
It hit an all-time high of $72 in November 2020. The shares are trading around $32 today.
I think there’s a good chance stock will be able to bounce back to the $50s. Let us consider the investment case for XPEV stock to clear up what you can expect from the company in 2021.
A Closer Look at XPEV Stock
The company has expanded its product offering with three new vehicle versions that are powered by lithium iron phosphate batteries. These cars include the G3460c model, P7 Standard Range Smart and P7 Premium Models. All are available for order in China with deliveries expected to begin in May.
The P7 models are based on the company’s existing rear-wheel drive (RWD) long-range models and come with autonomous driving assistance. Further, they will also have the latest intelligent in-car operating system.
With these models, XPeng meets the demands for shorter distance driving in China. It offers diversification in the product line and has products that meet the needs of every customer. The mid-level driving range cars appeal to many customers in China for the price point.
The company also introduced a new G3 460c version with an LFP powered battery and deliveries will start in April 2021.
It has expanded the product portfolio of the company and also meets the needs of autonomous driving features at the same price point. This can appeal to a lot of customers and lead to a rise in demand. The sales will show a strong increase considering the diversified product offering. It will take XPEV stock to new highs.
XPeng Has Government Support
XPeng received $76.9 million from an investment arm of the local Chinese government. The amount will be used for business expansion.
XPeng stated that the fund will give a push to the “automobile industry’s strategic transition in Guangdong.” This is not the first time the company has attracted funding. The EV manufacturer has attracted funds from several investors since the IPO.
XPeng has managed to attract investors with its strong fundamentals and a consistent rise in deliveries. The company has secured a line of credit from five domestic commercial banks across China which has given access to $1.98 billion. In September, XPeng received a funding commitment from a government entity of $587 for setting up a manufacturing unit in Guangzhou.
Further, the company is planning to list shares on the Hong Kong Stock Exchange with rivals Nio (NYSE:NIO) and Li Auto (NASDAQ:LI). It aims to sell 5% of the share capital which can raise $5 billion. Additionally, XPeng is also considering a listing on the STAR Market of Shanghai.
Considering the latest product offering and an expansion across geographical markets, it can be rightly said that the company is allocating the funds in an efficient manner.
The Bottom Line on XPEV Stock
Despite reporting mixed Q4 numbers, the fundamentals of XPeng are strong and the future looks bright. The demand for EVs is on the rise and XPeng is on the right path with its attractive product offering.
The share prices are low and as the EV industry picks up, XPEV stock will soon bounce back to a new high. The shares will cross $50 soon so better book your ride now!
On the date of publication, Vandita Jadeja did not have (either directly or indirectly) any positions in the securities mentioned in this article.