Xpeng (NYSE: XPEV), the prominent electric vehicle (EV) manufacturer, has caught the attention of EV investors in recent weeks with its remarkable performance on the stock market. Surging with substantial double-digit returns, the company’s success has been attributed to a combination of factors.
At the time of publication on July 31, shares of Xpeng were trading at $23.39, after soaring by more than 15.6% on Friday, July 28.
On the weekly chart, XPEV gained over 56%, adding around $8 billion in market cap during that period.
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Over the past month, Xpeng’s shares are up nearly 100%, and over 120% since the start of 2023, making it one of the best-performing EV stocks on a year-to-date basis.
Why is Xpeng stock on the tear?
The primary factor fueling XPEV’s stock rally is the company’s recently-struck landmark deal with Volkswagen, the biggest auto manufacturer in Germany.
Notably, Xpeng and Volkswagen reached an agreement to jointly develop two new electric cars exclusively for the Chinese market. The Wolfsburg-based auto giant is set to invest around $700 million into Xpeng to acquire a 4.99% stake in the Chinese startup.
The carmakers will work together on two mid-sized battery-electric vehicles powered by the underlying technology behind Xpeng’s G9 crossover SUV. Furthermore, the new cars will also feature Xpeng’s sophisticated driver-assist technology.
The two upcoming cars are expected to be launched in 2026, said Volkswagen, which derives around 40% of its global sales and half of its profits from China.
“Volkswagen Group is stepping up the pace of its transformation in China, where the group aims to remain … amongst the top three in the market.”
the company wrote in an earnings statement on July 27.
Xpeng’s deliveries return to growth
Less recently, a portion of Xpeng stock gains were fueled by the company’s return to growth for quarterly car deliveries, after reporting declining figures for more than a year.
The automaker delivered 23,205 in Q2 2023, marking a quarter-over-quarter increase of 27%. The report exceeded Xpeng’s own delivery forecast of between 21,000 and 22,000 vehicles, though it was still lower than the 34,422 cars delivered in the same quarter last year.
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