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Xpeng's Strong December Deliveries Boost Future Outlook

Xpeng reports an impressive December with 82% delivery growth. With a strong overall performance and robust demand, the company shows promise for future growth, but uncertainties remain about its ability to outperform the S&P 500 in the coming year.

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AI Rating:   6

Delivery Growth and Competition

Xpeng has reported strong delivery numbers, with a remarkable 82% year-over-year increase for December, totaling 36,695 vehicles. This growth indicates a robust demand for Xpeng's electric vehicles, supported by the launch of its new sub-brand, Mona, and the successful sales of its XPENG P7+ sedan. The comparison with competitors Li Auto and Nio further highlights Xpeng's strong position in the market, with its 34% year-over-year increase in full-year deliveries outpacing Li Auto's 16.2% and Nio's 73%.

Stock Performance and Valuation

The report notes that Xpeng stock has not performed well over recent years, with a return of -18% since the start of 2024. Despite trading at roughly 2.6x estimated 2024 revenues, which is ahead of its competitors but below Tesla, the lackluster growth raises concerns about its future performance. The reference to Xpeng potentially underperforming the S&P 500 in the coming year reflects investor caution regarding the stock.

Market Position and Future Prospects

Xpeng's leadership in automation and assisted driving technology gives it a competitive edge. The introduction of affordable urban Advanced Driver Assistance Systems (ADAS) could drive mass adoption of its vehicles. Furthermore, the plan to expand operations into over 60 countries by 2025 suggests a strategic move towards international growth.

The report highlights that while current performance metrics, such as the high returns from the Trefis Reinforced Value Portfolio, showcase a contrasting investment opportunity, Xpeng’s unique position and solid delivery growth may signal to investors a potential turning point if managed well in the coming months.

Stocks:  XPEV LI NIO