The stock market showed some signs of fatigue on Thursday, though that did not stop it S&P 500 (SNPINDEX: ^ SPX) of reaching another record height. Strength in the Dow Jones Industrial Average (DJINDICES: ^ DJI) counterbalanced modest decline in the Nasdaq Composite, with much of the gain from the previous coming of enthusiasm linked to the authorization of a rapid COVID-19 test.
Current stock market
|
Index |
Percentage change |
Point Change |
|---|---|---|
|
Dow |
0.57% |
160 |
|
S&P 500 |
0.17% |
6 |
|
Nasdaq Composite |
(0.34%) |
(40) |
Data Source: Yahoo! Finances.
Electric car (EV) shares have received a lot of attention lately, especially considering the rise of the industrial giant Tesla (NASDAQ: TSLA). Today, the first public offering from another EV specialist showed competition in the arena. For some, that’s a sign of concern. For others, however, it indicates the huge demand that investors have for shares of companies in the sector.
Another Tesla rival in China
US investors have become familiar with NIO (NYSE: NIO), a Chinese manufacturer of electric SUVs. Xpeng (NYSE: XPEV) also makes electric cars, with the aim of serving a consumer market that is hungry for EVs.
Xpeng shares some common strategies with Tesla. Xpeng’s P7 sedan and G3 crossover are both aimed at an audience that loves high-end features, including extended range on a charge and some limited autonomous driving features. The cars share the appeal of Tesla CEO Elon Musk on specifications for the best performance, but Xpeng makes up for it with plush interior design that satisfies buyers of luxury cars.
Image Source: Getty Images.
But Tesla does not just have to start shaking in the boots. Although Xpeng has production capacity of about 250,000 cars per year at its two plants in China, it has so far delivered just over 20,000 cars.
Investors can not get enough
Xpeng had a good timing with his IPO. The company increased its offer price by 25% to $ 15 per share, and it also increased the size of the IPO from 85 million to 100 million shares. That pumps about $ 1.5 billion into Xpeng’s coffers, which it says it will use to begin production and expand its distribution and service footprint in China.
Once investors who missed the IPO got a chance to buy shares in the secondary market, they gave Xpeng share an extra boost. At the end of the day, stocks were up more than 40%, closing above $ 21.
If anything, however, news of more competition only marked the massive progress that Tesla has made. The automaker’s share once again climbed 4%, hitting another all-time high and bringing its market capitalization to a whopping $ 417 billion.
EV makers have become a huge trend of the auto industry, and investors seem to want all these companies to succeed. It may take decades for a complete transition to electric cars, but long-term investors with that kind of time frames place their bets on companies like Xpeng, Tesla and their peers.
