A bad news blast isn’t keeping XPeng (NYSE:XPEV) down today. The Chinese electric vehicle (EV) producer is still in the throes of a difficult month as geopolitical and regulatory factors weigh heavily on the nation. Today brought news that one of XPeng’s top executives is being investigated for corruption and has been suspended as a result. While this development doesn’t sound good, it hasn’t negatively impacted XPEV stock.
On the contrary, shares are rising and have been performing well since markets opened. This suggests that the company can handle unfavorable market conditions and hold its own when it needs to. For investors looking to bet on the booming Chinese EV market, this should be an excellent sign.
Is this news likely to impact XPeng in the long term? Let’s dive into this recent development and take a closer look at what investors should be expecting.
What’s Happening With XPEV Stock
While it displayed some slight volatility this morning, XPEV stock has been mostly trending upward since markets opened. As of this writing, it is up 4% for the day and looks primed to continue rising. These gains can likely be attributed to general positive market momentum. XPeng’s peers Li Auto (NASDAQ:LI) and Nio (NYSE:NIO) are also in the green today. Still, after dipping last week, the company could definitely use the positive momentum. It comes in the face of an announcement that would have definitely pushed a weaker stock down.
Today, XPeng announced that it had suspended Li Feng, the company’s vice president in charge of supply chains, due to an “investigation related to corruption.” Feng held an important position, helping oversee XPeng’s EV expansion efforts while supply chain conditions proved very complicated. As of now, few details about the probe or suspension have been provided by XPeng, though a spokesperson did speak to CNBC about it. In their words:
“We would like to clarify that our recent internal anti-corruption measures implemented by the company are a part of our continuous commitment to promoting ethical conduct and integrity and this incident has had limited impact and will not disrupt our business or production processes.”
Now that XPeng is gearing up to take its shot at the flying car market, supply chain matters will be even more crucial. Whether or not the probe directly impacts XPEV stock is yet to be determined. But what investors should take from today’s performance is that XPEV is a stock that can handle bad news. That should strengthen the bullish case for it, even as tensions between the U.S. and China cast doubt over Chinese investments.
On the date of publication, Samuel O’Brient 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.
