XPENG’s Baltic Gambit: How a Strategic Partnership Could Unlock Europe’s Next EV Frontier

The electric vehicle (EV) race is intensifying, and XPENG is making a bold move to seize territory in Europe’s underpenetrated Baltic markets. On May 22, 2025, the Chinese EV pioneer announced a partnership with Modus Group, a regional automotive powerhouse, to launch its advanced models in Estonia, Latvia, and Lithuania. This strategic play isn’t just about tapping into a niche market—it’s a calculated step toward XPENG’s audacious goal of operating in over 60 countries by year-end, while leveraging cutting-edge technology and a compelling valuation. Here’s why investors should pay attention.

Market Expansion: The Baltic as a Springboard for Northern Europe

The Baltic States are no afterthought. With EV adoption rates lagging behind Western Europe but growing rapidly—Estonia’s EV market share jumped from 12% to 22% in 2024—these markets offer XPENG a foothold in a region hungry for affordable, high-tech alternatives to established brands. Partnering with Modus Group, which has 30 years of regional expertise and represents 17 automotive brands (including Porsche and BMW), minimizes operational risks. Modus’ existing dealership networks and customer trust will accelerate XPENG’s entry, bypassing costly trial-and-error.

Sales of XPENG’s G9 flagship SUV and G6 coupe SUV begin in Q3 2025. Both models boast the Euro NCAP 5-star safety rating, a critical seal of approval for European buyers. Crucially, XPENG is also building showrooms and after-sales service centers in each Baltic country, signaling a long-term commitment. This isn’t just about selling cars; it’s about establishing brand loyalty in a region primed for EV growth.

Technological Edge: XPENG’s Secret Weapon

While competitors like Tesla and VW battle for dominance, XPENG’s SEPA 2.0 platform and 800V fast-charging technology give it a distinct advantage. The 800V system delivers a staggering 120 km of range in just 5 minutes—a feature that could rival Tesla’s Superchargers. Paired with CTB Battery Integration, which enhances structural strength and efficiency, these cars are engineered for performance and safety.

But XPENG’s tech doesn’t stop there. Its in-house developed ADAS systems and OTA updates enable continuous upgrades, a rarity in the industry. This “software-defined vehicle” approach positions XPENG as a leader in the $2.1 trillion intelligent EV market, where software margins are far juicier than hardware.

Valuation Attractiveness: A Stock Trading at a Fraction of Its Potential

At a P/E ratio of -29.59, XPENG’s stock appears deeply undervalued compared to peers like Tesla (P/E ~60) or NIO (P/E ~25). But this negative multiple stems from temporary losses, not lack of momentum. XPENG delivered 35,045 units in April 2025 alone, a 273% year-on-year surge, and its Q1 gross margin hit 15.6%, signaling improving profitability.

The Baltic push is a catalyst to unlock further value. With plans to expand into 20+ European countries by year-end (including Austria, Switzerland, and Italy), XPENG is scaling faster than its valuation reflects. Its partnership with PlugSurfing—which grants access to **940,000 EV charging points across 27 European countries—ensures infrastructure support, a critical factor for mass adoption.

Risks to Consider

No investment is risk-free. XPENG faces stiff competition from established automakers like Volkswagen and Renault, which are aggressively pushing EVs in Europe. Macroeconomic headwinds, such as rising interest rates or a slowdown in consumer spending, could dent demand. Additionally, the Baltic markets’ small size means scaling must be paired with broader European penetration.

Conclusion: A Long-Term Play With Asymmetric Upside

XPENG’s Baltic entry is more than a regional play—it’s a strategic masterstroke. By leveraging Modus Group’s expertise, deploying best-in-class EV tech, and capitalizing on an undervalued stock, XPENG is primed to capitalize on Europe’s EV boom. While risks exist, the 273% year-on-year delivery growth, 15.6% gross margin, and 60-country roadmap suggest a company in hyperdrive. For investors with a 3–5 year horizon, XPENG’s blend of growth, innovation, and valuation could offer asymmetric rewards. This is a stock to buy while the world still underestimates its potential.

Investors: Act now before XPENG’s Baltic bet turns into a full European breakout.