It’s been an excellent month for XPeng (NYSE:XPEV). The electric vehicle (EV) producer has enjoyed the momentum generated by a renewed interest from investors in Chinese EV stocks. Now the company is poised to surge even more as it awaits a significant catalyst. XPeng has confirmed that on June 29, it will launch the XPENG G6 Ultra Smart Coupe SUV. XPEV stock is surging on the news, and for good reason. This hotly-awaited vehicle is the first EV produced under XPeng’s new Smart Electric Platform Architecture (SEPA) 2.0. When it launches, investors will get to see just how well the new platform is working.
As noted, the market is reacting very well to XPeng’s announcement. As of this writing, XPEV stock is up 6% for the day. Its current trajectory suggests that it isn’t running out of momentum. Despite some volatility last week, XPeng is making up the ground it lost and looks ready to pull back into the green for the week.
What This Means for XPEV Stock
Whenever an automaker unveils a new vehicle that the public wants to see, it tends to help boost shares. However, the G6 Ultasmart Coup launch is important for other reasons. As the first EV produced under SEPA 2.0, it will give investors a first-hand look into how well the platform works. If it is deemed a success, it could be a significant step forward for EV production, especially for XPEV stock. As TechCrunch reported following the platform’s unveiling:
“The Smart Electric Platform Architecture (SEPA) 2.0 is expected to shorten the R&D cycle for future models by 20%, as well as cut costs on adaptations for advanced driver assistance systems (ADAS) and smart infotainment systems by 70% and 85%, respectively.”
Achieving the features described above would give XPeng a clear advantage over its competitors. China’s EV market is massive, and it is growing rapidly. Perfecting SEPA 2.0 would put it in an excellent position to continue growing steadily at a time when gaining an advantage over companies such as Nio (NYSE:NIO) and Li Auto (NASDAQ:LI) is critical. Meanwhile, Tesla (NASDAQ:TSLA) remains a constant threat to smaller EV producers in China. But interest in XPeng’s newest vehicle is high. In a tweet on June 9, the company announced that it had already received more than 25,000 pre-orders for the G6 coup in the first 72 hours after they opened.
As of now, there’s no reason to suspect that investors won’t be impressed with the G6 Coup’s launch. Buyers have rushed to sign up to purchase it. And XPeng has the benefit of launching it after a successful debut at Shanghai Auto in April 2023. XPEV stock is likely to keep rising until the event, and if the launch goes well, it likely won’t slow down. But even as it rises, XPeng’s low share price of less than $11 per share provides investors with what should be a tempting point of entry. It’s a great time to bet on Chinese EV stocks, and XPeng is certainly a company worth watching.
On the date of publication, Samuel O’Brient did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
