Xpeng Plunges 5.63%—What’s Fueling the Sudden Sell-Off?

Summary
• XPEV slumps to $19.9619, a 6.34% drop from $21.38
• Intraday range spans $19.96–$21.04 amid regulatory and pricing pressures
• July deliveries hit 36,717 units, yet sector-wide EV sales growth slows in China
• Options volatility surges as traders bet on near-term volatility

Xpeng Inc. (XPEV) faces a sharp intraday selloff, trading at $20.025 as of 17:17 ET. The stock’s 6.34% decline reflects broader sector jitters over China’s regulatory crackdown on price wars and slowing hybrid demand. With July deliveries hitting a record 36,717 units, XPEV’s fundamentals remain robust, but macroeconomic headwinds and sector-wide uncertainty are amplifying short-term volatility.

Regulatory Clampdown and Pricing Pressures Weigh on XPEV
XPEV’s selloff aligns with China’s intensified regulatory scrutiny on EV price wars, which have eroded margins across the sector. Recent data shows July car sales growth slowing to 6.9% YoY, with hybrid demand declining 3.6% as battery advancements reduce reliance on hybrid models. XPEV’s own delivery numbers—36,717 units in July—highlight strong execution, but the broader market’s shift toward pure EVs and regulatory penalties for aggressive discounts are creating headwinds. Additionally, U.S. trade fears and Trump-era tariff speculation are amplifying risk-off sentiment in EV stocks.

EV Sector Mixed as Tesla Gains, Peers Struggle
The EV sector remains fragmented, with Tesla (TSLA) up 0.08% despite broader declines. NIO (NIO) and Li Auto (LI) also fell, reflecting sector-wide pressure from regulatory and pricing dynamics. XPEV’s 6.34% drop contrasts with Tesla’s resilience, underscoring divergent investor sentiment toward premium vs. mass-market EV strategies. While XPEV’s localized production in Indonesia and July delivery growth signal long-term potential, near-term volatility is being driven by macroeconomic and regulatory factors.

Options and Technicals: Navigating XPEV’s Volatility
• RSI: 74.37 (overbought)
• MACD: 0.415 (bullish), Signal Line: 0.120
• Bollinger Bands: Upper $20.55, Middle $18.83, Lower $17.12
• 200D MA: $17.20 (below current price)

XPEV’s technicals suggest a short-term bearish bias, with key support at $19.98 and $19.33. The RSI’s overbought level and MACD divergence hint at potential reversal. For options, two contracts stand out:

• XPEV20250822P19: Put option with 72.61% IV, 37.10% leverage ratio, delta -0.31, theta -0.014, gamma 0.1398. Turnover: 16,758. This contract offers high leverage and liquidity, ideal for a 5% downside scenario (projected price $19.02). Payoff: max(0, $19.02 - $19) = $0.02 per share.
• XPEV20250822P19.5: Put option with 71.28% IV, 27.83% leverage ratio, delta -0.386, theta -0.0103, gamma 0.1542. Turnover: 2,025. Strong gamma and moderate IV make this a high-gamma play for sharp moves. Payoff under 5% downside: max(0, $19.02 - $19.5) = $0.

Aggressive bears may consider XPEV20250822P19 into a breakdown below $19.98, while XPEV20250822P19.5 offers directional exposure with high gamma. Watch for a retest of the $19.98 support level ahead of XPEV’s August 19 earnings report.

Backtest Xpeng Stock Performance
The backtest of XPEV's performance after a -6% intraday plunge shows favorable short-to-medium-term gains. The 3-day win rate is 53.12%, the 10-day win rate is 50.45%, and the 30-day win rate is 62.02%, indicating a higher probability of positive returns in the immediate aftermath of the plunge. The maximum return during the backtest period was 12.75%, which occurred on day 59, suggesting that XPEV can recover significantly from such events.

XPEV at Crossroads: Earnings and Regulatory Risks to Watch
XPEV’s near-term trajectory hinges on its ability to navigate regulatory headwinds and sector-wide pricing pressures. While July deliveries underscore operational strength, the stock’s 6.34% drop reflects investor caution ahead of its August 19 earnings report and broader macroeconomic risks. Key levels to monitor include $19.98 (immediate support) and $20.55 (Bollinger upper band). For context, sector leader Tesla (TSLA) remains flat at +0.08%, highlighting divergent market dynamics. Investors should prioritize short-term options strategies or wait for a clearer breakout above $21.04 to re-engage long positions.