Shares of Chinese electric vehicle (EV) maker Xpeng (NASDAQ:XPEV) are exploding higher on Wednesday. XPEV stock is hitting multi-month highs on robust trading volume, up almost 30% so far on the day.
At the session high, shares were notably higher, up about 42%. As of 2:00 p.m. Eastern, the stock changed hands more than 122 million times. That’s Xpeng’s highest trading volume since November when it generated a trading volume of 175 million shares. The stock rallied almost 50% that day on earnings.
Wednesday’s rally comes as Xpeng unveiled a strategic partnership with Volkswagen (OTCMKTS:VWAGY).
Volkswagen, which is responsible for brands like Audi, Porsche, Volkswagen (of course), Bentley, and Ducati, among others. It commands a market capitalization of roughly 60 billion euro, while Xpeng has a market cap of roughly $17 billion.
More than a partnership, Volkswagen has also taken a stake in the automaker. The company will invest $700 million in Xpeng.
Further, “under the terms of the investment, VW will take a 4.99% stake in XPeng through the purchase of stock at $15 per American depositary share (ADR), which represents a 2.3% discount to Tuesday’s closing price of $15.36.”
Regarding the investment, Volkswagen said, “The aim is to swiftly tap into new customer and market segments, thereby systematically leveraging the potential of China’s dynamically growing e-mobility market.”
Here’s Who’s Betting Big on XPEV Stock
The rally in XPEV stock is fueling a move higher for Chinese EV stocks on the day. Nio (NYSE:NIO) and Li Auto (NASDAQ:LI) are both higher on the day, rallying 10.5% and 3.5%, respectively. For its part, Tesla (NASDAQ:TSLA) is about flat on the day.
It’s worth noting that it’s been a powerful week for Chinese EV stocks. On Monday, these stocks exploded higher on word that China will undergo stimulative actions in an effort to boost the economy.
Despite a solid GDP measure for the second quarter, the country’s 6.3% growth rate missed economists’ expectations. That prompted officials to consider various stimulus measures, which investors generally interpret as bullish.
For Nio, Xpeng and other Chinese EV stocks, that was the case on Monday. Now XPEV stock is up 34% for the week. At today’s high, shares were up 49.9%. That’s dialed up big gains for its top shareholders.
Its top shareholder is FifthDelta, with 12.23 million shares, followed by Primecap Management Company, with 12.1 million shares. Primavera Capital Management is the third-largest shareholder, with 9.91 million shares.
In the fourth spot is the Vanguard Horizon Fund-Capital Opportunity Fund with 6.9 million shares. Interestingly, Alibaba (NYSE:BABA) rounds out the top five, with 6.65 million shares. The stock is slightly higher on the day, up about 2%.
Just below Alibaba are Susquehanna International Group, Bank of America (NYSE:BAC) and Morgan Stanley (NYSE:MS).
On the date of publication, Bret Kenwell 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.
