Xpeng (XPEV) shares fell 1.4% in pre-market trading on Monday due to concerns over steering issues in the new P7+ model. Reports of problems in different production batches have caused dissatisfaction among customers. The company also announced the launch of the new P7 model on August 27.
Title: XPeng Shares Fall Amid Steering Issues and New Model Launch
XPeng (XPEV) shares experienced a 1.4% drop in pre-market trading on Monday, fueled by concerns over steering issues in the newly launched P7+ model. Reports of problems in various production batches have sparked dissatisfaction among customers, while the company also announced the debut of the new P7 model on August 27 [1].
The latest software update, XOS 5.8.0, introduced several advanced features, including Human-Machine Co-Driving and upgraded Adaptive Cruise Control, aiming to enhance smart mobility and personalization [1]. However, the company is under fire for allegedly replacing faulty steering components in its P7+ vehicles without a formal recall, raising safety concerns [2].
XPeng has faced allegations that it quietly repaired vehicles with defective power steering systems, which can suddenly fail or lock while driving. This has led to regulatory scrutiny and potential reputational damage [2]. Despite denying a systemic defect, the company has applied sealant during maintenance and selectively replaced steering systems for vocal complainants, sparking outrage [2].
The stock’s recent volatility can be attributed to CEO He Xiaopeng’s aggressive share purchase and the ongoing controversy over the P7+ steering system. XPEV surged 12.56% intraday, trading at $22.93, near its 52-week high of $27.16, before falling back due to the steering issues [3]. The company’s handling of the recall controversy could have significant implications for its reputation and financial standing.
Investors are weighing the CEO’s bullish signal against regulatory risks and sector fragmentation. The EV sector remains fragmented, with Xpeng’s 12.56% gain contrasting Tesla’s 0.6% decline. While the sector’s volatility underscores the high-risk, high-reward profile of XPEV, the steering system controversy could mirror past issues at rivals like Ford [3].
References:
1. [1] https://www.benzinga.com/markets/tech/25/08/47303570/xpeng-unveils-major-software-update-as-steering-failure-allegations-intensify
2. [2] https://www.benzinga.com/markets/tech/25/08/47255812/tesla-rival-xpeng-under-fire-for-hiding-ev-defects-with-secret-repairs-to-dodge-official-recall-report
3. [3] https://www.ainvest.com/news/xpeng-soars-12-56-ceo-buy-recall-drama-breakout-flash-pan-2508/