XPeng stock price has crashed 35%: Is it safe to buy the dip?

XPeng stock price has nosedived in the past few weeks as investors have dumped Chinese EV companies. XPEV dropped to $18 in New York, down by 35% from its highest point this year. This article explores why it has crashed despite its strong numbers.

Why the Xpeng stock price has crashed

Xpeng stock price has dived in the past few weeks, mirroring the performance of other Chinese EV companies. 

Nio stock has dropped by 20% in the last 30 days, while Li Auto, and Leapmotor have slumped by over 15%.

Similarly, Xiaomi and BYD have also tumbled in the past few months. This decline is happening as investors remain wary about demand after many local governments ended or adjusted subsidies for EVs.

That move has led to more concerns that the demand will ease significantly in 2026, a move that will lead to lower profits as the price war continues.

The XPeng stock has also dropped as signs of weak demand in other markets emerge. Ford announced a $20 billion charge this week, while the European Union ended the 2035 combustion engine ban as the transition became slower than expected.

The new change is notable as XPeng and other companies are aiming to gain market share in the European Union, a region where they can receive a higher margin than in China.

READ MORE: Xpeng stock set for breakout as management takes aim at Tesla’s AI ambitions

Xpeng’s business is doing well 

Still, there are signs that XPeng will emerge from the ongoing slump better than other automakers because of its strong performance and the popularity of its brands like XPeng 7, G6, G9, and X9.

The most recent results showed that the company’s business was doing well, with its revenue and profitability having improved.

XPeng delivered 116,007 vehicles in the third quarter, from 46,533 in the same period last year. As a result, its revenue rose by 101% to $2.8 billion. Its revenue was also 11% higher than in the second quarter as customers rushed to buy ahead of the end of the subsidies.

The company’s gross margin expanded to 20.1%, much higher than other companies, including Tesla. Its gross margin moved from 13.1% in the same period last year.

As a result, it narrowed its losses, with its net loss coming in at $0.05 billion or RMB 0.38 billion, much better than the previous RMB 1.1 billion.

Analysts are optimistic that the company’s growth will continue, with the average revenue estimate for the fourth quarter being CNY 23.1 billion, up by 43% from the same period last year. This growth will bring its annual revenue to CNY 78 billion, up by 92% from the same period last year. It will then make CNY 112 billion in revenue in 2026 and an EPS of CNY 2.61.

XPeng stock price technical analysis 

The daily timeframe chart shows that the XPeng stock price has dropped sharply in the past few weeks, moving from a high of $28.3 to the current $18. 

This retreat happened after the stock formed a rising wedge pattern, which is a common bearish sign in technical analysis. 

It has now moved below the 50-day and 100-day Exponential Moving Averages (EMA), which made a bearish crossover pattern.

The Relative Strength Index (RSI) is nearing the oversold zone of 30, while the Awesome Oscillator has moved below the zero line.

Therefore, the most likely scenario is where the stock continues dropping to the key support at $15 and then resumes its uptrend as investors buy the dip. 

READ MORE: Hang Seng Tech Index slumps into a bear market as Nio, Xpeng, Li Auto slump

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