Interest in electric vehicle (EV) stocks has surged in recent months. However, not every winner of the renewed interest in EVs has gone to American companies. XPeng Motors (NASDAQ: XPEV), an electric vehicle manufacturer and researcher based in Guangzhou, China. XPeng saw its stock increase in price by more than 40% on the day of its initial public offering (IPO) — and investors are looking to the EV company for 2021 and beyond.
Are you interested in adding shares of XPEV to your portfolio? Our beginner’s guide will introduce you to the process you’ll go through when you learn how to buy stocks, how to get started with your first brokerage account and how to buy your first shares of XPEV stock.
How to Buy XPeng Motors (XPEV) Stock
If you’ve ever bought or sold shares of stock before, you can likely already use your existing brokerage account to buy XPeng’s stock because it currently trades on the New York Stock Exchange (NYSE). Open your brokerage account, search for XPeng’s ticker (XPEV) on your trading platform and use your broker’s individual process to buy and sell shares as you please.
Never invested in the stock market before? Our guide will help you open your brokerage account and start your investment portfolio and buy into Wall Street.
- Pick a brokerage.
The first step to invest in the stock market is to open an account with a broker. A stockbroker is a financial service company authorized to buy and sell shares of stock on behalf of retail investors, sometimes in exchange for a small per-trade fee or commission. The broker that you choose will provide you with a trading platform you can use to initiate buy and sell orders from the comfort of your home. Many brokers also provide access to mobile trading, educational resources and research tools.
- Decide how many shares you want to buy.
Next, you’ll need to decide how many shares of stock you want to buy. Take a look at the current price of XPEV and how the share price is changing. You may want to track the price of XPEV over time to be sure that you’re buying in at the most advantageous time.
When you think that it’s time to buy, set a budget for the total amount of money that you want to invest. Then, use the market price to determine how many shares you can buy. Don’t worry if your investment doesn’t come out to a perfectly even number of shares — most brokers will allow you to invest in “fractional shares” worth as little as a dollar.
- Choose your order type.
After your brokerage account is fully funded and you’ve decided how many shares of stock you want to add to your portfolio, you can select your order type. The type of order that you choose will influence when your order is filled and the amount that you pay for each share of stock. The best brokers offer multiple types of orders — some of the most common types of orders your broker might provide you with access to may include:
Market order: A market order is a buy order executed at the current market share. For example, if you place an order to buy 10 shares of XPEV and the current market price is $40 per share, you’ll pay around $40 per share that you buy. Though market orders are filled quickly, they give you little control over the price that you pay per share.
Limit orders: A limit order is a buy order executed at or below a specific price. Unlike placing a market order, you’ll specify both the number of shares that you want to buy as well as a maximum price that you’re willing to pay per share when you place a limit order.
Say you place a limit order to buy 10 shares of XPEV at a limit price of $40 per share. Your broker will only fill the order if it’s possible to buy each share at a price of $40 or less. Although limit orders allow you to control costs when investing, these types of orders are less likely to be filled than market orders.
Trailing stop order: Trailing stop orders are executed as a market order when a stock’s price rises a certain percentage or dollar amount above its lowest market price. For example, if the current stock price of XPEV is $40 and you set a trailing stop order with a trailing percentage of 10%, your broker would execute the order as a market order if the price of XPEV rises to the stop price of $44 or 10% above its current price.
Depending on the broker you work with, you might have access to additional types of buy orders.
- Execute your trade.
After you’ve filled in your order details, submit your order to your broker through your trading platform and relax. Your broker will execute the order on your behalf according to your price and timing instructions.
Best Online Brokers for Stocks
If you don’t know where to begin your search for a broker, consider starting off with a few of our favorite options below. You can access the passenger vehicle market, review the market caps of every EV maker where you may want exposure and perhaps invest in other types of driving technology.
XPEV Stock History
XPeng was founded in 2014 by 2 former senior executives from GAC Group, a Chinese automobile manufacturer. From the outset of the company, XPeng has seen multiple successful funding efforts from backers like Alibaba, Foxconn and IDG Capital. The company’s first model, the G3, debuted in December 2018. XPeng Motors’ subsidiary in the U.S. received the Autonomous Vehicles Testing Permit from the California Department of Motor Vehicles in March 2020.
After its debut in 2020, XPeng saw a sharp rise and decline in stock prices as investors showed a renewed surge in interest in electric vehicle stocks.
On August 27, 2020, XPeng made its entrance on the NYSE with its IPO. The company raised $1.5 billion on its opening day and shares of XPEV’s stock climbed more than 40% on its first day of trading. Although shares of the company’s stock have since fallen from its all-time high, renewed interest in electric vehicles may push XPeng’s stock higher in the future.
The EV market is constantly changing, and while XPeng is aiding in the electrification of world roadways, remember that the growth rate of this asset will shift every new and then. As of May 2023, the stock’s market cap at over $8.5B.
Pros to Buying XPeng Stock
If you’ve been watching stocks like Blink Charging (NASDAQ: BLNK) or Tesla (NASDAQ: TSLA) you’re probably already aware that electric vehicles have been major market winners since the conclusion of the 2020 U.S. presidential election. The International Energy Agency recently predicted that by 2030, there would be up to 125 million electric vehicles on the road.
Shares of XPeng stock rose more than 12% in January 2020 alone, as the company announced a new partnership with lidar manufacturing and research company Livox. Lidar technology provides drivers with a safer and more reliable method of judging distance when driving at night. This new partnership has the potential to help XPeng make major moves on the electric vehicle market across the world, especially as EV charging becomes more prevalent, climate change becomes a larger social issue and fuel cell technology becomes easier to handle.
Cons to Buying XPEV Stock
XPeng’s early success this year has largely been wiped out, as major electric vehicle stocks plunge in value with a Tesla-led nosedive. XPeng’s stock has fallen by 37% from its all-time high value, with shares currently trading around $40 per share compared to a high of more than $70 in November 2020.
This trend shows just how much influence major electric vehicle manufacturers have over the market as a whole — it’s possible that even a minor shift in market sentiment can cause the price of the shares to further plummet. With the leadership role in the electric vehicle market already filled by Tesla, XPeng may not be in as advantageous of a position as it seems.
Investing in EV Stocks With Wisdom
As interest in the electric vehicle market continues to surge through 2021, more and more investors are adding EV stocks to their portfolios. If you’re interested in investing in renewable energy, it’s a good idea to diversify your portfolio by adding a few unique EV stocks and ETFs to your list of investments. Diversifying your investments will allow you to better protect yourself against capital loss.
About Sarah Horvath
Sarah is an expert in the insurance, investing for retirement and cryptocurrency space.