Shares of China-based electric vehicle (EV) maker Xpeng (NYSE:XPEV) are off of their highs from late last year. Yet, does this mean that XPEV stock is “dead money,” or is there a prime buying opportunity here?
If you want to invest in the future of self-driving technology, and particularly lidar (light detection and ranging), the share-price dip should pique your interest.
With the premier of a new vehicle model, Xpeng is staking its claim as a leader in smart-car tech. And, you don’t have to be a lidar expert to appreciate the game-changing potential with this event.
So just maybe, the share-price decline is a gift to prospective Xpeng investors. For all we know, the new vehicle’s introduction to the public might be the most significant EV event of 2021.
A Closer Look at XPEV Stock
As I alluded to earlier, XPEV isn’t trading near its peak anymore. The hype phase occurred in November of 2020, when the share price rocketed up from $20 and change to a 52-week high of $74.49.
Since that time, the stock has drifted downward. Early March of 2021 was a particularly challenging time for the bulls.
Indeed, XPEV stock dipped below $27 briefly on March 8, 2021. There was a moderate recovery period after that, though.
On the afternoon of April 12, the shares were trading near $34. So, it’s possible that the worst part of the decline is in the rear-view mirror.
Could the bulls make another run for $50 and even $75 this year? Perhaps the excitement over a new smart sedan can get the XPEV stock bulls into a higher gear.
Going Long on Lidar
Let’s back up for a moment and discuss lidar. To put it very simply, lidar is a system that helps to provide vision and the detection of objects in the environment for self-driving vehicles.
Lidar systems use laser beams to form a three-dimensional image of the surveyed surroundings. That makes a real-time map of the environment. On-board computers can use that to help navigate self-driving vehicles, for instance.
So clearly, lidar technology is central to the broader self-driving automotive tech space. I wouldn’t be surprised if more companies jump head-first into the lidar niche market in 2021 – and it’s smart for Xpeng to make an early move into lidar.
Now, I’m not trying to imply that XPEV stock is a pure play in the lidar market. For that, you might want to check out Microvision (NASDAQ:MVIS) stock. I covered that one not too long ago, and it’s definitely among my favorite tech stocks today.
In contrast, Xpeng shares are a less direct play on emerging lidar technology. First and foremost, you’d be owning a stake in a China-headquartered EV manufacturer – which isn’t a bad thing if you can envision growth in this area.
A Day to Remember
So, here’s the big news: on April 14, XPeng will debut the company’s lidar-equipped P5 model smart sedan.
Reportedly, XPeng asserts that this event will mark the first mass-produced smart EV featuring automotive-grade lidar technology.
In a sense, then, we could say that we’re all bearing witness to a historic event. At the very least, it’s a major development for XPeng’s stakeholders.
According to the company’s press release related to this event, the P5 will be “powered by XPeng’s full-stack in-house developed autonomous driving system XPILOT.”
Automotive technology aficionados should anticipate more details about the P5’s “unique design language, the underlying architecture for XPeng’s next-generation XPILOT 3.5 system and its functionalities, the new features supported by XPeng’s proprietary intelligent in-car operating system Xmart OS, and more.”
There’s even been talk that the P5 and the XPILOT 3.5 system will feature ultrasonic sensors, high-definition cameras, millimeter-wave radar and high-precision GPS and mapping systems.
The Bottom Line
It’s exciting to have an opportunity to look into what may be the future of self-driving automotive technology.
And while it’s not exactly a pure play on lidar tech, XPEV stock nonetheless remains a future-facing investment in smart EV’s with a multitude of impressive features.
On the date of publication, David Moadel did not have (either directly or indirectly) any positions in the securities mentioned in this article.
David Moadel has provided compelling content – and crossed the occasional line – on behalf of Crush the Street, Market Realist, TalkMarkets, Finom Group, Benzinga, and (of course) InvestorPlace.com. He also serves as the chief analyst and market researcher for Portfolio Wealth Global and hosts the popular financial YouTube channel Looking at the Markets.