XPeng (XPEV) stock rose as much as 13% on Friday after the Chinese EV maker launched its new mid-sized SUV at a sale price 20% lower than Tesla's Model Y.
The G6 vehicle starts at $28,950. Tesla's price for the Model Y currently sits around $47,240.
The unveiling in Shanghai sent American Depository Shares (ADRs) of peers NIO (NIO) and Li Auto (LI) higher on Friday.
In May, BYD— seen as Tesla's strongest competitor in China cut the ticket price of its SEAL sedan by 10%.
In June, EV maker NIO announced it was taking $4,200 off all its vehicle offerings in China.
"We think the price war initiated by Tesla, in addition to massive launches of new EV models by competitors in 2023, will weigh on XPeng’s pricing power," analyst Aaron Ho of CFRA said in a note to investors earlier this week. Ho has a Sell rating on the stock and a $7 price target.
XPeng’s competitive price on its new SUV is seen as a way to turnaround sales and meet its aggressive delivery targets.
The company reported a steep drop in sales in the first quarter amid fierce competition and an uneven recovery in China following its lifting of COVID-19 protocols.
Deliveries in May declined almost 26% year-over-year to 7,506 vehicles. XPeng is targeting the delivery of 200,000 units in 2023 versus 120,757 in 2022 — or a 66% year-over-year increase in volume.
Delivery for XPeng's G6 are expected to start as soon as July. The stock is up 34% year-to-date.
Ines is a senior business reporter for Yahoo Finance. Follow her on Twitter at @ines_ferre
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