Xpeng stock price analysis: XPEV braces for more headwinds
Xpeng (NYSE: XPEV) stock price has been in a tight range in the past few months as the company braces for more challenges. The shares were trading at $9.37 on Monday, where it has been this year. It has plunged by more than 88% from its highest point in 2020, giving it a market cap of more than $7.97 billion.
Xpeng growth has been acceleratingCopy link to section
Xpeng is a leading company that manufactures electric vehicles (EVs) for the Chinese market. It is one of the biggest firms in the country, where it competes with the likes of Nio, Li Auto, and Byd.
The company has been in a strong growth in the past few years as EV adoption grows. Its total revenue jumped from $1.4 million in 2018 to over $3.8 billion in 2022. Its losses have also widened from $203 million to $1.32 billion in the same period.
Analysts believe that the company will turn profitable in 2026 when its earnings per share will jump to 21 cents. Its annual revenue is expected to hit over $10.5 billion in 2025 and over $39.98 billion in 2032, making it one of the biggest companies in the industry.
Xpeng has continued ramping up production. In March, the company delivered 7,002 EVs, a 175 increase from the previous month. In Q1, the company sold 18,230 vehicles. It hopes to continue growing its market share in the EV industry by launching several models. For example, it launched the P7i vehicle in March.
Rising Competition in ChinaCopy link to section
The biggest challenge for Chinese EV manufacturers like Xpeng, Li Auto, and Byd is that their sales are mostly limited domestically. This is unlike other companies like Tesla, Ford, and GM, which have a huge footprint internationally.
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“To be in that ‘3mn club’ you cannot be a China-only player, you have to be a global player. We think in that scenario, maybe close to half your volume is coming from outside of China. In five to 10 years, it’s going to be a much more concentrated market. I think the [number] of players will probably be reduced to less than 10 at the global stage”
Xpeng hopes to enter the European market later this year although it has no immediate plans for the US market. In Europe, it will face substantial competition from the likes of VW, BMW, and Stellantis.
Xpeng stock price forecastCopy link to section
Xpeng share price crashed hard after peaking in 2021. This decline saw the stock drop to a low of $6.34 in 2022. The shares are now moving sideways and consolidating at the 25-day and 50-day exponential moving averages (EMA). The Average True Range (ATR) has continued falling, which is a sign of low volatility.
Therefore, the shares will likely remain in this range for a while as investors wait for a catalyst. A bearish breakout will see it drop to $6.34.