Not so long ago, NIO stock was widely viewed within the retail investment community as the ‘Tesla of China’. Like Tesla, the Chinese company had some brilliant electric vehicles (EVs) and it was growing at a spectacular rate.
Now, it’s fair to say that NIO hasn’t gone on to emulate Tesla – EV delivery numbers have been disappointing at times and the stock has tanked. The good news, however, is that there’s another Chinese company that is looking like it could be a genuine Tesla of China.
Skyrocketing EV sales
The stock in focus today is XPeng (NYSE: XPEV). Listed on both the New York Stock Exchange and the Hong Kong Stock Exchange, it’s an EV company that’s rapidly scaling up production.
Now, there are three main reasons why this company is increasingly looking like a Tesla-style business. The first is that it’s having a lot of success on the EV front.
Today, it has a range of models including the P7, a four-door sports saloon that’s often compared to Tesla’s Model 3, and the G6, a mid-sized all-electric SUV that competes with Tesla’s Model Y.
In the third quarter, the company registered a record-high 116,007 deliveries. This was up 149% year on year (much stronger growth than Tesla).
Impressive self-driving tech
The second reason is that, like Tesla, the company has some impressive self-driving technology. Its systems include XPILOT and the newer XNGP (Navigation Guided Pilot), which use a combination of cameras, radar, and LiDAR to provide advanced driver assistance.
XNGP is basically XPeng’s version of Tesla’s Full Self-Driving (FSD). It’s designed to provide a fully autonomous driving experience.
Note that XPeng is also active in the robotaxi space. It plans to launch three robotaxi models in the near future and commence trial operations for the service next year.
State-of-the-art humanoid robots
On top of all this, XPeng has humanoid robots. Its version is called IRON.
This robot has 200 degrees of freedom across 60 articulated joints. A key feature is its ‘Eagle Eye’ vision system, which uses high-resolution cameras to provide 720-degree environmental awareness.
It’s worth noting that XPeng’s approach to humanoids is quite similar to Tesla’s – it’s aiming to leverage its experience in EVs and AI to create versatile robots that can be mass produced. Already, IRON has been deployed in XPeng’s EV factories (where it works on assembly lines) and the company is hoping to ramp up production in 2026.
Worth a look?
So, is this company worth considering as a growth investment? I think so.
It’s certainly growing quickly. This year, revenue is expected to rise about 90% to CNY 78.5bn.
Meanwhile, the valuation looks very reasonable. Currently, the company’s price-to-sales ratio is only around two (versus 15 for Tesla).
I’ll point out that, like a lot of Chinese stocks, XPeng is higher up on the risk spectrum. Some risks to consider include competition in the Chinese EV and robotaxi markets (which is intense), US-China relations, and larger-than-expected investments in technology and AI.
Weighing everything up though, I see a lot of investment potential to consider. But it’s not the only stock that looks attractive right now.
