Xpeng (XPEV) Surges 6.8% on Global Expansion Momentum—What’s Fueling the Rally?

Summary
• Xpeng (XPEV) surges 6.8% intraday, hitting $21.19
• Intraday range spans $19.80 to $21.19 amid Middle East expansion news
• Analysts highlight AI-driven strategy and localized production in Malaysia
• Options chain shows heightened activity in January 2026 calls and puts

Xpeng’s stock has ignited a 6.8% rally on December 26, 2025, driven by its aggressive expansion into the Middle East and Malaysia. The move follows a strategic pivot to AI-defined vehicles and localized manufacturing, with options traders betting on volatility. The stock’s 52-week high of $28.23 remains a distant target, but near-term momentum suggests a re-rating of its global ambitions.

Middle East Expansion and AI-Driven Strategy Fuel Xpeng's Rally
Xpeng’s 6.8% surge is directly tied to its strategic expansion into Qatar and Mauritius, announced in partnership with Almana Group and Axess Limited. The move taps into the Middle East’s growing EV demand, while its AI-first approach—evidenced by the vision-based P7+—positions the company as a tech-driven automaker. Analysts at Daiwa and CLSA have upgraded XPEV to 'buy,' citing its hybrid EREV strategy and cost-cutting measures. The stock’s breakout above its 200-day moving average ($20.57) and 50-day SMA ($21.50) has further stoked bullish sentiment.

EV Sector Volatility Amid Global Expansion and Price Wars
The EV sector remains fragmented, with Tesla (TSLA) down 1.5% on the day despite its AI validation of vision-based systems. BYD’s dominance in China contrasts with Xpeng’s international push, while Li Auto’s EREV model continues to attract conservative investors. Xpeng’s localized production in Malaysia and hybrid strategy differentiate it from pure BEV peers like NIO, which struggles with margin compression. The sector’s mixed performance underscores the importance of geographic diversification and cost control.

Options Playbook: High-Leverage Calls and Strategic Puts for Xpeng's Volatile Move
• 200-day average: $20.57 (below current price)
• RSI: 50.57 (neutral)
• MACD: -0.67 (bullish crossover near)
• Bollinger Bands: $17.66–$21.65 (price near upper band)

Xpeng’s options chain reveals aggressive positioning in January 2026 contracts. Two top picks stand out: XPEV20260102C21 and XPEV20260102P19.5.

XPEV20260102C21
• Code: XPEV20260102C21
• Type: Call
• Strike Price: $21
• Expiration: 2026-01-02
• IV: 44.19% (moderate)
• Leverage Ratio: 42.58% (high)
• Delta: 0.479 (moderate sensitivity)
• Theta: -0.083 (moderate time decay)
• Gamma: 0.1605 (high sensitivity to price swings)
• Turnover: 119,442 (liquid)
• Payoff at 5% Upside: $1.05/share (25% gain on strike).
This call offers high leverage and liquidity, ideal for capitalizing on a breakout above $21.50.

XPEV20260102P19.5
• Code: XPEV20260102P19.5
• Type: Put
• Strike Price: $19.50
• Expiration: 2026-01-02
• IV: 44.17% (moderate)
• Leverage Ratio: 208.65% (extreme)
• Delta: -0.1398 (low sensitivity)
• Theta: -0.0033 (low time decay)
• Gamma: 0.16296 (high sensitivity to price swings)
• Turnover: 206 (modest)
• Payoff at 5% Upside: $1.40/share (71% gain on strike).
This put offers asymmetric upside if volatility spikes, though liquidity is a concern.

Action: Aggressive bulls should target XPEV20260102C21 into a break above $21.50. Cautious investors may hedge with XPEV20260102P19.5 to lock in downside protection.

Backtest Xpeng Stock Performance
The backtest of XPEV's performance following a 7% intraday increase from 2022 to the present reveals a significant underperformance. The strategy yielded a return of -58.74%, lagging the benchmark by 105.15%. With a maximum drawdown of 0.00% and a Sharpe ratio of -0.26, the strategy demonstrated a high risk and a substantial loss.

Xpeng's Global Gambit: Position for 2026's EV Market Shift
Xpeng’s 6.8% rally reflects its strategic repositioning as an AI-first automaker with global ambitions. The stock’s near-term trajectory hinges on its ability to scale localized production in Malaysia and maintain margin discipline amid Chinese subsidy rollbacks. With Tesla (TSLA) down 1.5% and BYD dominating the domestic market, Xpeng’s hybrid EREV strategy offers a unique value proposition. Investors should monitor the 200-day SMA ($20.57) as a critical support level and watch for a breakout above $21.50 to confirm a sustained rally. For now, the options market favors aggressive calls—position accordingly.