The Stock of Chinese EV Maker Xpeng Is Climbing on Strong Delivery Numbers

Xpeng P7

Chinese electric-vehicle maker Xpeng reported strong October deliveries on Monday, and the stock was rising in response.

Xpeng (ticker: XPEV) delivered 3,040 vehicles, up 229% from less than 1,000 vehicles a year earlier. Xpeng delivered 3,478 vehicles in September.

Shares were up 8.7% to $21.07 in premarket trading, despite the month-over-month decline. Management said in a news release that China’s Golden Week holiday in early October affected its deliveries.

Xpeng peer NIO (NIO) reported Monday that it delivered 5,055 vehicles in October, doubling from a year earlier. The result is doubly impressive because NIO just raised its manufacturing capacity to 5,000 vehicles a month. The company is selling all the cars it can make.

NIO eked out monthly gains, as well, delivering 4,708 vehicles in September and 3,965 vehicles in August. NIO stock was also up about 7% in premarket trading.

Rising deliveries are good, not only for Xpeng and NIO, but for the EV industry. Both delivery figures are more evidence that EV demand hasn’t been hurt by Covid-19. The number of electric vehicles in China, and globally, is up year over year.

What’s more, the two numbers show the Chinese car market remains healthy. China is the world’s largest market for new vehicles. Sales rose 13% year over year in September.

U.S. October car sales will come out over the next couple of days, with the final number likely on Tuesday evening. Analysts expect the annualized selling rate to be about 16.5 million units, just below the rate before the pandemic hit the U.S. in March. As in China, U.S. car sales have recovered from recent lows.

Shares of EV makers Barron’s tracks are up about 325% year to date, crushing comparable returns of the S&P 500 and Dow Jones Industrial Average.

That figure excludes Xpeng shares, because it does have a full year of trading history. The company sold shares to the public in late August at $15. The stock, including Monday’s gains, is up about 40% from that price, but on the day of the IPO, shares opened at $23.10. So investors who bought then are down almost 9%.

Still, Xpeng and other EV stock returns are impressive. The three U.S. listed Chinese EV stocks—NIO, Xpeng and Li Auto (LI)— are up about 23% over the past month on average.

Xpeng is scheduled to report third-quarter earnings on Nov. 12. Analysts expect the company to post a 17-cent per-share loss from $284 million in sales. Xpeng is still a relatively new company and hasn’t produced a profit yet.

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