Xpeng (XPEV) Surges 6.8% on Strategic Expansion and Options Volatility – What’s Next?

Summary
• Xpeng Inc. (XPEV) surges 6.8% intraday to $19.865, breaking above its 52-week high of $28.235
• Options activity intensifies with 9,518 contracts traded, calls outpacing puts at a 0.35 put/call ratio
• Implied volatility jumps to 72.25%, signaling heightened short-term uncertainty
• Strategic partnership in Malaysia and Q3 delivery growth of 19% drive investor optimism

Xpeng Inc. (XPEV) is surging on a mix of strategic expansion and volatile options activity. The stock’s 6.8% intraday gain reflects optimism around localized production in Malaysia and improved Q3 delivery figures. However, elevated implied volatility and bearish options positioning suggest a tug-of-war between bullish fundamentals and lingering sector-wide concerns.

Malaysian Expansion and Delivery Momentum Ignite XPEV
Xpeng’s 6.8% intraday rally is fueled by a strategic partnership for localized EV production in Malaysia, announced earlier this week. This move aligns with the company’s international expansion goals and reduces supply chain risks. Additionally, Q3 vehicle deliveries rose 19% year-over-year to 36,728 units, bolstering confidence in its ability to meet quarterly targets. The stock’s surge contrasts with broader sector jitters, as investors bet on XPEV’s ability to capitalize on Southeast Asia’s growing EV market.

EV Sector Mixed as BYD Leads, XPEV Outperforms Peers
The Chinese EV sector remains fragmented, with BYD (1211.HK) dominating with a 56.7% upside potential and 24.8% ROE. NIO (NIO) and Li Auto (LI) lag, with NIO’s -143.8% ROE and LI’s -29% annual return highlighting sector-wide profitability struggles. XPEV’s 6.8% intraday gain outperforms peers like NIO (-1.42%) and LI (+4.73%), suggesting its Malaysia strategy and delivery momentum are resonating more strongly with investors.

Options and ETFs for XPEV’s Volatile Outlook
• 200-day average: $20.65 (above current price)
• RSI: 29.48 (oversold)
• MACD: -1.06 (bearish divergence)
• Bollinger Bands: $17.59–$22.11 (current price near upper band)

XPEV’s technicals suggest a short-term rebound after hitting oversold RSI levels, but bearish MACD and a 200-day average above current price indicate caution. The stock is trading near its 52-week high, with key support at $19.49 and resistance at $22.11. Aggressive bulls may consider XPEV20251226C20.5 (strike: $20.5, delta: 0.34, IV: 43.29%, leverage: 71.11%) for a high-leverage play on a $22.11 breakout. For a balanced approach, XPEV20251226C21 (strike: $21, delta: 0.23, IV: 46.39%, leverage: 110.61%) offers strong gamma (0.22) and theta (0.05) for short-term volatility. Both contracts have high turnover (23,221 and 33,526) and moderate IV, aligning with XPEV’s 72.25% implied volatility spike. A 5% upside to $20.86 would yield 366% and 350% returns on these calls, respectively.

Backtest Xpeng Stock Performance
The backtest of XPEV's performance after a 7% intraday increase from 2022 to the present shows favorable short-term gains, highlighting the stock's potential for quick price appreciation. However, the overall returns over longer periods are relatively modest, indicating that while XPEV can offer short-term gains, it may not consistently deliver substantial long-term returns based on this event alone.

XPEV’s Rally Faces Crucial Test – Act Now or Miss the Wave
Xpeng’s 6.8% surge hinges on its ability to sustain momentum above $19.49 support and break through $22.11 resistance. The stock’s technicals and options activity suggest a volatile near-term outlook, with elevated IV and bearish MACD signaling potential pullbacks. Investors should monitor Tesla (TSLA, +0.28%) as a sector barometer and XPEV’s December delivery figures for confirmation of its Malaysia strategy’s success. For now, the XPEV20251226C20.5 and XPEV20251226C21 options offer high-reward opportunities for those betting on a sustained breakout. Watch for a $22.11 close to validate the rally’s durability.