Back to top

Image: Bigstock

Tesla Cooling Off, XPeng Heating Up: Which EV Stock Wins Your Vote?

Read MoreHide Full Article

For years, Tesla (TSLA - Free Report) has been the undisputed face of the electric vehicle (EV) revolution. From sleek car designs to bold bets on self-driving tech and artificial intelligence, Tesla transformed the auto industry. Today, it still stands tall with a staggering $1 trillion market cap and a relentless push into new frontiers like robotaxis. But, the hype and buzz around Tesla is not the same anymore. Growing competition, CEO Elon Musk’s headline-grabbing controversies and mixed reactions to Tesla’s long-awaited robotaxi reveal are testing investor patience.

Meanwhile, XPeng, Inc. (XPEV - Free Report) — a rising EV star from China — is making serious waves. Backed by a surge in China’s new energy vehicle (NEV) sales and strong government support, XPeng is delivering rapid growth and rolling out its own AI-driven innovations. And while Tesla grapples with a potentially tougher U.S. regulatory environment, including the looming end of the $7,500 EV tax credit, XPeng’s momentum is building fast.

Year to date, XPeng stock has surged 55%, trouncing Tesla’s performance. The question is whether investors should stay with the EV pioneer or bet on the fast-rising tech-savvy challenger?

Zacks Investment Research Image Source: Zacks Investment Research

The Case for Tesla

Tesla might still be the first name that pops into your mind when we talk about EVs, but cracks are starting to show. After years of strong growth, Tesla’s deliveries are now heading in the wrong direction. In 2024, the company posted its first-ever annual drop in deliveries. That slump has continued into 2025, with sales falling 13% year over year in the first quarter and another 13.4% in the second quarter of 2025. Europe has been a particularly weak spot, but demand has cooled in other markets too. Tesla faces a real chance of delivering fewer vehicles in 2025 than it did in 2024. That would mark a second straight year of declining sales.

Tesla hasn’t released a new mass-market model in years. While competitors are flooding the market with fresh EVs at various price points, Tesla’s lineup is starting to feel dated. Add in rising competition from both dedicated EV makers and traditional automakers, and Tesla’s once-dominant market position is slipping. Musk's public image isn’t helping either. His political posts and unpredictable behavior are turning off some potential buyers.

Tesla’s big swing to reignite excitement—the robotaxi—hasn’t landed quite right either. The service launched in a limited test in Austin last month, but reports suggest it’s still very much a work in progress. Technical hiccups and the need for human safety drivers make it clear that fully autonomous rides are still some distance away.

Tesla’s energy and charging businesses are bright spots, but they’re not yet big enough to carry the company. For now, Tesla needs to prove it can revive its core auto business before its rivals pull too far ahead.

The Case for XPeng

XPeng may not have Tesla’s size or global brand power, but it’s quickly earning its place in the EV spotlight. The Chinese EV maker is scaling fast—and smart. It’s not just selling more cars; it’s building them around intelligence-driven features that appeal to the tech-savvy buyer.

Take the new G7, for example—a sleek crossover that fits right between XPeng’s G6 and G9 models. But it’s not just about filling a lineup gap. The G7 is the first vehicle powered by XPeng’s own Turing AI chip, which boasts triple the computing power of typical smart driving chips. That gives it a real edge in self-driving capability. Launched in China, the G7 undercuts Tesla’s Model Y by nearly $9,500, and early sales suggest it’s a serious competitor.

XPeng’s delivery numbers are turning heads too. In 2024, it delivered over 190,000 vehicles, up 34% year over year. That growth has exploded in 2025. In just the first quarter of 2025, XPeng delivered 94,008 vehicles—a massive 331% jump from the same period a year ago. The momentum continues. Last month, XPeng delivered 34,611 smart EVs, marking a whopping 224% increase year over year. With that, XPeng’s deliveries surpassed the 30,000 mark for the eighth straight month. In the three months ending June 2025, it sold a record 103,181 cars, more than double its second-quarter 2024 levels.

The company is innovating fast. From its AI-powered Hawkeye Vision System to its XOS 5.4 operating system, XPEV is all-in on full-stack smart driving. It’s even dabbling in futuristic tech like flying cars and humanoid robots. XPeng may still be the underdog, but it is quickly becoming one of the most exciting EV players to watch.

How Do Estimates Compare for XPEV & TSLA?

The Zacks Consensus Estimate for XPeng’s 2025 top and bottom line suggests year-over-year improvement of 102% and 67%, while the 2026 sales and earnings estimate implies a jump of 39% and 207%, respectively, from 2025 projected levels. See how estimates for XPEV have been revised in the past 90 days.

Zacks Investment Research Image Source: Zacks Investment Research

The Zacks Consensus Estimate for Tesla’s 2025 top and bottom line suggests year-over-year decline of 3.7% and 27%. However, its 2026 sales and earnings estimate implies growth of 18% and 51%, respectively, from 2025 projected levels. See how estimates for TSLA have been revised in the past 90 days.

Zacks Investment Research Image Source: Zacks Investment Research

Conclusion

While Tesla still commands global attention, its momentum is clearly slowing. Falling deliveries, fierce competition, and a shaky start to its robotaxi ambitions have cast a shadow over its growth story. Tesla’s downward EPS estimate revisions and its Zacks Rank #4 (Sell) reflect the challenges it is facing.

XPeng, in contrast, is gaining speed—delivering record-breaking numbers, showcasing advanced tech, and riding strong tailwinds in China’s booming EV market. With positive EPS estimate revisions and solid growth outlook, XPeng is quickly proving it’s not just a rising star, but a serious player.

XPeng, with a Zacks Rank #2 (Buy), is clearly the more attractive pick in today’s EV landscape.

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here


See More Zacks Research for These Tickers


Normally $25 each - click below to receive one report FREE:


Tesla, Inc. (TSLA) - free report >>

XPeng Inc. Sponsored ADR (XPEV) - free report >>

Published in