Tesla Cooling Off, XPeng Heating Up: Which EV Stock Wins Your Vote?

Core Viewpoint - Tesla's dominance in the electric vehicle (EV) market is being challenged by increasing competition and internal issues, while XPeng is rapidly gaining traction in the industry with strong growth and innovative technology [1][19][20]. Tesla Overview - Tesla maintains a market cap of $1 trillion but is experiencing a decline in deliveries, with a 13% drop year-over-year in Q1 and another 13.4% in Q2 of 2025, marking the first annual drop in deliveries in 2024 [3][19]. - The company has not released a new mass-market model in years, leading to a perception of a dated lineup as competitors introduce fresh EVs [4]. - CEO Elon Musk's controversies and the slow rollout of the robotaxi service have further complicated Tesla's market position [5][19]. - Tesla's energy and charging businesses are growing but are not sufficient to offset the challenges in its core auto business [6]. XPeng Overview - XPeng has seen a 55% increase in stock price year-to-date, significantly outperforming Tesla [3]. - The company delivered over 190,000 vehicles in 2024, a 34% increase year-over-year, and achieved a remarkable 331% increase in Q1 2025 deliveries compared to the same period in 2024 [12]. - XPeng's new G7 model, featuring its own Turing AI chip, is positioned competitively against Tesla's Model Y, undercutting it by nearly $9,500 [11]. - The company is innovating rapidly with advanced technologies like the AI-powered Hawkeye Vision System and is exploring futuristic concepts such as flying cars and humanoid robots [13]. Financial Estimates - The Zacks Consensus Estimate for XPeng suggests a 102% improvement in 2025 revenue and a 67% increase in earnings, with further growth projected for 2026 [14]. - In contrast, Tesla's estimates indicate a 3.7% decline in revenue and a 27% drop in earnings for 2025, although growth is expected in 2026 [17]. Conclusion - Tesla's slowing momentum, declining deliveries, and challenges with new initiatives have raised concerns about its future growth [19]. - XPeng is emerging as a strong competitor with impressive delivery numbers, advanced technology, and a favorable outlook in the growing Chinese EV market, making it a more attractive investment option [20].