XPeng (NYSE:XPEV) has moved its autonomous driving ambitions into commercial territory, officially rolling out China’s first mass produced, in house Robotaxi in Guangzhou, built on its GX platform and L4 pure vision system.

The Robotaxi launch comes as XPeng’s share price sits at US$15.59 and shorter term momentum has softened, with the stock down 23.69% year to date, even though the three year total shareholder return is up 90.12% while the five year total shareholder return is down 51.48%.

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With XPeng’s shares down 22.05% over the past year despite progress in autonomous driving and Robotaxis, the key question is whether today’s price reflects a discount or if the market is already pricing in future growth.

Most Popular Narrative: 44.6% Undervalued

XPeng's most followed narrative puts fair value at $28.16, well above the last close of $15.59, which frames the current Robotaxi rollout in a very different light.

Strategic collaborations, most notably with Volkswagen, are generating recurring IP/licensing revenue streams beyond vehicle sales. These collaborations could be further monetized as XPeng's E/E architecture becomes foundational for more VW models (including ICE and PHEV), driving incremental high-margin revenue and supporting EPS growth.

Curious what justifies that kind of valuation gap? The popular narrative leans on rapid revenue expansion, a swing toward profitability, and a rich future earnings multiple baked into those cash flow assumptions.

Result: Fair Value of $28.16 (UNDERVALUED)

However, the narrative can quickly shift if XPeng's net losses persist, or if Chinese EV price competition and trade tensions squeeze margins more than analysts currently assume.

Another View: Cash Flows Paint A Very Different Picture

While the popular narrative points to a fair value of $28.16 and labels XPeng as undervalued, the Simply Wall St DCF model is much more cautious, with an estimate of future cash flow value at $7.94. That gap suggests investors are really betting on execution and sentiment lifting cash flow expectations. Which story do you trust?

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out XPeng for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 48 high quality undervalued stocks. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Next Steps

If the mixed messages on valuation and growth have you undecided, it may help to review the details yourself and move quickly to form a view using the 2 key rewards.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.