Shares of XPeng Inc. (XPEV) took a significant hit in premarket trading on Wednesday, declining by 9.0%. This puts the China-based electric vehicle maker on track for a bear-market correction. The stock is anticipated to open approximately 22% below its 11-month high of $23.39, which was recorded on July 28.
Bear-Market Correction Signals Decline
A bear-market correction is typically defined as a decline of 20% or more from a significant bull-market peak. In this case, XPeng's stock experienced a staggering 197% surge since hitting a six-month low of $7.87 on May 30, but it has since lost momentum.
Resignation of VP of Autonomous Driving
In further unsettling news, Xinzhou Wu, the vice president of autonomous driving at XPeng, has recently resigned from his position due to personal and family reasons. However, the company has swiftly appointed Liyun Li, senior director of the autonomous driving team, to assume Wu's responsibilities.
Mixed Delivery Results
On Tuesday, XPeng reported a 4.5% drop in deliveries for the month of July. In contrast, its competitors Nio Inc. (NIO) and Li Auto Inc. (LI) reported significant increases of 103.6% and 227.5%, respectively. This disparity raises concerns about XPeng's performance in the highly competitive electric vehicle market.
Stock Performance Overview
Despite the recent setbacks, XPeng's stock has still performed impressively this year, soaring by 101.7% as of Tuesday. Comparatively, the Global X Autonomous and Electric Vehicles exchange-traded fund (DRIV) has advanced by 39.1%, the iShares MSCI China ETF (MCHI) has seen a modest increase of 2.6%, and the S&P 500 (SPX) has risen by 19.2%.
XPeng Inc. now faces the challenge of regaining investor confidence and adapting to the rapidly evolving electric vehicle landscape.
