The Chinese Electric Vehicle market is making big development and growing tremendously. Other countries are also gearing up for their mission to reduce carbon emission and Tesla (NASDAQ:TSLA) is leading the race. However, Xpeng (NYSE:XPEV) is quickly catching up and could be a strong competitor in the growing industry. There are several players in the EV industry and companies are trying to make the most of the momentum but XPeng has proved its strength time and again. XPEV stock was as high as $72 in November 2020 and hit a low of $23 in May due to chip shortage. The stock has gained momentum and is trading close to $42 today.
XPEV stock is up 16% over the last week and 100% over the year. Every pullback in the stock is an opportunity to buy. I have always been bullish on XPEV stock and believe it has a long run. With that in mind, let’s take a look at the catalysts driving the growth for XPEV stock.
Impressive Delivery Numbers
XPeng has announced strong vehicle delivery results for July. It delivered 8,040 smart EVs in the month, which is also the highest ever monthly delivery. It is a 228% year-over-year increase and a 22% month-over-month increase.
P7 contributed the most to the companies delivery numbers. The year-to-date deliveries stood at 38,778 units which is a 388% increase year over year. The company had delivered 6,565 vehicles in June, a 617% rise year over year. Rival Nio (NYSE:NIO) delivered 7,931 models in the month.
The company started delivering P7 in July 2020 and within one year, its total deliveries hit 40,612. It clearly reflects the popularity of the model amongst the consumers. The company will launch its third production model, P5 in this quarter with deliveries starting next quarter.
The strong delivery numbers are proof that the company is moving in the right direction and the demand for its EVs is constantly growing. The stage is set for a strong third quarter and I am sure the numbers will soar through the quarter. Record delivery numbers are proof that the company is generating revenue and offers just what the consumers are looking for.
Third Manufacturing Unit In Wuhan
To keep up with the growing demand for its products, XPeng has set up the third production facility in Wuhan. The company has tied up with the local provincial government for the manufacturing unit which will have an annual capacity of 100,000 units. The company has started working on this unit.
It already has an operational facility in Zhaoqing and another facility in Guangzhou. The production at the Guangzhou unit will commence in 2022. Each of the plants has a capacity of 100,000 units which means the company is planning to treble the production capacity over the next few years. This will allow it to increase deliveries and report higher revenue.
XPeng is constantly moving forward to ensure that the demand and supply are met. With an expansion in the production capacity, the company will be able to move into European markets as well. It has already marked its presence in Norway and could soon expand to other countries.
The Bottom Line On XPEV Stock
XPeng is not just a mere player in the Chinese EV race, it enjoys a strong position in the industry and is one of the key players. The company is assertive in establishing its place in the market and with strong delivery numbers, it is proving its strength.
XPeng could go higher as it reports Q2 earnings. After beating the Q2 delivery projections, the company has the potential to beat revenue estimates and soar to new highs. It will be interesting to see how consumers react to the new model, P5, which will be launched later this year.
XPEV stock is a buy before Q2 earnings.
On the date of publication, Vandita Jadeja did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.