XPeng (NASDAQ:XPEV) will launch a new “flagship” car called the X9 on Nov. 17 at the Guangzhou Auto Show. XPEV stock rose 5% overnight on the news.
The car is the first to be built using XPeng’s SEPA 2.0 architecture, which will become standard for all its cars.
XPEV shares were trading in New York at almost $16.50 early this morning. That’s a market capitalization of about $14.7 billion on estimated 2023 sales of $3 billion.
XPeng’s Big Bet
XPeng announced SEPA 2.0 in April. It’s designed to cut manufacturing costs, like the General Motors (NYSE:GM) Ultium platform and Volkswagen’s (OTCMKTS:VWAGY) MEG.
As with other EVs, the battery pack is placed in the center of the car, under the passengers, with electronics placed on the sides and at the rear. This will cut the costs of electronics by more than half, XPeng believes.
XPeng will start taking orders for the X9 at the show. It’s designed to compete with Li Auto’s (NASDAQ:LI) Mega MPV, that company’s first all-battery model. The car is expected to be a 7-passenger vehicle, like an American SUV, but with a lower silhouette.
After a rocky 2022, XPeng has had a solid 2023 with rising deliveries. Shares are up 57% but traded as high as $23.40 during the summer.
XPeng also makes an electric vertical take-off and Landing (eVTOL) craft, the Voyager X2, along with its electric cars. Its eVTOL will compete with those from American companies like Archer Aviation (NASDAQ:ACHR) and Joby Aviation (NASDAQ:JOBY).
XPEV Stock: What Happens Next?
The challenge for XPeng and all its rivals is to make a profit. XPeng lost $53 million in the second quarter. It is due to report third-quarter numbers tomorrow, Nov. 15. Losses are expected to be reduced, with revenue up 25%.
As of this writing, Dana Blankenhorn 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.
