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An Xpeng P7 car will be displayed at the Beijing Auto Show in Beijing on September 27, 2020.
WANG ZHAO / AFP via Getty Images
Chinese electric vehicle start-up
XPeng
reported strong deliveries in the fourth quarter on Sunday evening.
The company delivered 5,700 vehicles in December 2020, up from 4,224 in November and 326% more than in December 2019. For the entire fourth quarter, XPeng (ticker: XPEV) delivered 12,964 vehicles.
Deliveries exceeded XPeng’s own initial projections. XPeng management said on its third-quarter earnings conference call that it expected to deliver approximately 10,000 vehicles in the fourth quarter.
All three US publicly traded Chinese EV stocks had a busy weekend, with all reporting delivery figures. The theme was the same for everyone – XPeng, along with
NIO
(NIO) and
Li Auto
(Li) exceeded internal projections. NIO has delivered more than 17,000 vehicles, about 1,000 more than management predicted. Li has delivered more than 14,000 vehicles, about 3,000 more than management predicted.
EV leader
Tesla
(TSLA) also reported fourth-quarter deliveries over the weekend. Elon Musk’s company delivered more than 180,000 vehicles in the fourth quarter, which was better than the roughly 176,000 vehicles forecast by analysts.
Predicting investor response to China’s electric vehicle announcements is not easy. All three stocks fell after reporting strong deliveries in November. Although Li had sold more shares to raise money around the time the three released delivery figures in November.
However, falling on good news is a common action in the bull market, and EV stocks are certainly in a bull market. Tesla was up about 740% in 2020 and is now by a wide margin the world’s most valuable automotive company. The XPeng stock closed 2020 at $ 42.83, up significantly from its summer IPO price of $ 15 per share.
The profits make XPeng, and the Chinese EV industry as a whole, expensive. For example, XPeng is trading for about 15 times its estimated sales in 2021. Barron’s recently wrote that Chinese EV stocks seem too expensive. That article came out in mid-December, and Chinese EV stocks are trading on average where they did then.
Wall Street largely disagrees Barron’s. More than 60% of analysts rate the three Chinese EV stocks – NIO, Li and XPeng – at Buy. The average buying ratio for stocks in the
Dow Jones Industrial Average
is about 57%.
For XPeng, 67% of the company’s analysts review the stock at Buy. The average price target for analysts is about $ 49 per share.
Monday should be an interesting day. Investors are also dealing with Tesla’s recent Model Y pricing in China. The model Y crossover is priced below an NIO EC6. The XPeng crossover EV – the G3 model – is priced below both the NIO and Tesla crossovers. But any investor concerns about price cuts could be offset by this weekend’s delivery figures.
Write to Al Root at [email protected]