Written by Julia Rostova
The most important equity story in Chinese electric vehicles this week is not that the sector suddenly became easy again. It is that XPeng is beginning to give investors a credible reason to believe execution can still outrun skepticism. The company said it delivered 40,126 vehicles in June and 103,295 in the second quarter, while also preparing the China debut and presale launch of the MONA L03 on July 2, according to its latest delivery update. That does not make XPeng a clean turnaround. It does make it the most plausible rerating candidate in a part of the market where many investors had largely stopped believing reratings were possible.
The key is that XPeng’s delivery story is getting better faster than its income statement. MarketBeat says the stock closed at $13.26 on June 30 with a consensus target of $25.51, implying substantial upside from a still-depressed base. The same summary puts the stock at only about 1.15 times sales and 2.98 times book, which is not demanding if the market starts to trust that current delivery momentum can survive into the next product cycle. The problem is that trust has not yet been fully earned.
That is where the first-quarter context matters. An accessible Yahoo earnings-call summary says XPeng’s first-quarter revenue fell 17.6% year over year, vehicle sales revenue fell 23.5%, and net loss widened to $1.78 billion. In other words, the recent delivery surge is arriving on top of a still-messy financial base. Bulls can argue that the stock is discounting stale weakness just as operating momentum improves. Bears can argue that volume gains are not worth much if profitability keeps slipping.
I think the market is right to resist giving XPeng a full benefit-of-the-doubt multiple, but it is increasingly wrong to treat the company like just another stranded China EV narrative. The June figures matter because they suggest real demand and usable product cadence rather than only promotional optimism. GX deliveries reached 6,739 in June, and the company says the model’s 10,000th unit rolled off the line on July 1. Add the near-term MONA L03 launch, and XPeng has more visible operating catalysts in front of it than most similarly valued peers.
The comparable set makes that distinction clearer.
| Stock | Company | Verdict | Price Target | Key framing |
| XPEV | XPeng | BUY | $18 | Delivery momentum and the MONA L03 launch justify a rerating from a depressed base, even if the full Street target still looks too optimistic until profits stabilize. |
| LI | Li Auto | HOLD | $13 | Cheaper valuation helps, but deteriorating sentiment and a “Reduce” consensus rating suggest the market is still unconvinced that product refreshes alone will restore leadership. |
| NIO | NIO | SELL | $4.50 | Infrastructure differentiation is not enough when profitability remains weak and the balance-sheet optics are harder to defend. |
| TSLA | Tesla | SELL | $360 | Tesla still owns the premium software narrative, but the valuation leaves too little room for error and consensus target support already sits below the stock. |
Start with Li Auto. The stock closed at $11.74, carries a consensus target of $17.30, and trades at just 0.78 times sales and 1.20 times book. On paper that looks cheaper than XPeng. But MarketBeat also shows a “Reduce” consensus rating, which is the market’s way of saying low multiples alone are not enough. Li Auto may still have product relevance, but it does not currently have the same sense of operating reacceleration.
Now look at NIO. At $5.06 with a $6.70 consensus target, it superficially appears inexpensive. The trouble is under the hood. NIO’s net margin is listed at -8.78%, and its price-to-book ratio is a startling 21.10, reflecting how much of the equity story now rests on intangible brand and ecosystem value rather than robust balance-sheet comfort. That is a difficult setup in a market that has become far less patient with aspirational EV narratives.
Then there is Tesla, still the benchmark every global EV investor mentally uses whether they admit it or not. Tesla closed at $420.60, yet MarketBeat’s consensus target sits at $403.07. The company trades at 16.66 times sales, 19.06 times book, and an eye-watering 385.87 times trailing earnings. Tesla deserves a premium for software, scale, and ecosystem strength, but not every premium remains prudent. Against that backdrop, XPeng’s much lower starting valuation starts to matter a great deal.
The bear case on XPeng is straightforward. China EV competition remains brutal, pricing power is fragile, and a company that still posts widening losses should not be mistaken for a finished operating story. A new-model pipeline can disappoint. Delivery bursts can fade. Overseas expansion can prove more expensive than bulls expect.
But the bull case is now strong enough to deserve respect. XPeng no longer looks like a generic speculative EV trade. It looks like a company with improving demand, a visible product cycle, and a valuation that still assumes the market should remain suspicious. My view is that suspicion has not disappeared, but it has become too absolute. That is why XPeng earns a buy here. Not because the company has already solved profitability, but because it is starting to look like the only major China EV name where better execution is no longer fully reflected in the stock.
