XPEV IPO and future potentialOK so obviously the green arrow is a bit of a joke in this instance!
I took a position in this stock yesterday, I would be intending holding for at least two years, for me a lot of things have to play out before this stock makes it's mark.
First we have to look at the economic climate that is coming and the the way the world is going.
We do have a recession coming so it is a tough time to be a new carmaker but electric cars may fare better than their counterparts, battery density and range are getting better all the time so it means that range anxiety is quickly going.
A lot of governments will be giving subsidies to get people to change to electric for the next few years, this is already a cheap car for the spec and this will mean an attractive price in Europe.
Xpeng's financials means that it is still losing money but should have cash now to ramp up production and reduce costs.
It is hard to compare Xpeng to Li auto because Li uses state sponsored production of the cars and did not build their own factory as far as I am aware, also they have a Hybrid engine which means that if the Chinese government changes to rules and goes to all-electric future production they will have to accomodate that , presumably with quite a bit of cost.
NIO has delivered approx 40k vehicles in the same time that Xpeng has delivered 20k, Xpeng's first model is made by a contracted company but they are adding more factory space to build up their own production facility.
I think there will more than likely be a better entry point then what I got but I am long so I am not too worried, Tesla is dragging everyone along with them and lots of people who cannot afford their shares are buying into these Chinese companies hoping for some of the same success, serious FOMO out there!
I have seen people pay a lot of attention to the fact that they don't make money but either did Tesla for many years and either does NIO and that has not hurt their share price and having Alibaba and Xiaomi as shareholders isn't a bad thing in my book.
I don't have a target for this as there is very little to compare it to but I would suggest that if they ramp up production successfully in the next year (let's face it,Chinese companies can do that at rates not seen elsewhere) and they make an announcement that they are entering the European market with the P7 and possibly a smaller car to follow then we will see a 50 - 60 dollar stock in 18 months.
Anyway as usual do your own DD and I am not not a professional adviser.
To those who bought in last week I wish you all happy trading!
