Chinese electric vehicle (EV) producer XPeng (NYSE:XPEV) is down about 8% today after reporting declining sales and deliveries. Today should have been excellent for the company, which just joined the Hang Seng TECH Index. Unfortunately, even that milestone hasn’t been enough to overpower the company’s disappointing February figures.
XPEV stock has been gradually trending downward all day, closing out the day in the red. The company saw some momentum yesterday but has since seen it all erased amid today’s declines. This is exactly what investors were hoping wouldn’t happen after a positive report from competitor Li Auto (NASDAQ:LI) boosted Chinese EV stocks.
Does this mean that XPeng won’t recover and investors should look elsewhere? Let’s take a closer look at the company and what we can expect in the coming months.
What’s Happening With XPEV Stock?
Li Auto may have had good news, but XPeng can’t say the same. The company reported that both its EV sales and revenue are still falling. This marks six consecutive months of decreasing sales on a year-over-year (YOY) basis.
With that in mind, it’s no wonder that XPEV stock fell today. In fact, despite the momentum that carried them into early March, shares are now down more than 12% for the past month.
It’s hard to be optimistic about XPeng’s immediate future. Even before the recent delivery and sales report, the company had given investors plenty of reason to be skeptical. InvestorPlace’s Louis Navellier ranked it among stocks to sell last month, raising concerns about its recent price cuts:
“Wall Street is seeing through the sleight of hand and isn’t happy that the company will be bringing in less profit per vehicle. Investors obviously aren’t convinced the lower prices will lead to more sales – shares of XPEV stock fell by more than 6% after the price cut.”
EV adoption may be taking off, but that doesn’t mean every EV company will soar. Some just won’t survive as EV consolidation overtakes the market.
XPEV stock may rebound from here, but its prospects don’t look promising.
On the date of publication, Samuel O’Brient did not hold (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.