Chinese electric vehicle (EV) makers XPeng (XPEV) and Zeekr (ZN) are amping up the rivalry in the sector by launching vehicles with Level 3 or L3 autonomy, a smart driving technology that will allow drivers to take their hands off the steering wheel. Aside from these two companies, Guangzhou Automobile Group (GAC) also announced that it will launch models with L3 autonomous driving capabilities this year, Reuters reported, citing local media. GAC also said that it was working on L4 models.
So far, the EV sector has only L2 systems. The auto industry has defined five levels of autonomous driving, ranging from cruise control at L1 to fully self-driving cars at L5. The L3 vehicles can drive without a human driver’s supervision. XPeng, Zeekr, and GAC will have to secure regulatory approval before drivers can use the L3 features in their cars.
XPeng and Zeekr Flaunt L3 Capabilities
In the Q4 2024 earnings call held on Tuesday, XPeng’s co-founder, Chairman, and CEO Xiaopeng He stated that in the second half of this year, the company will become the first in China to offer a smart driving experience that boasts software capabilities and user experience “equivalent” to L3 autonomous driving.
The CEO expects L3 autonomy to generate strong demand and exceptional user loyalty, “marking an iPhone 4 moment for AI-defined cars.” He added that in 2026, XPeng plans to mass-produce vehicle models that will support L4 autonomous driving in low-speed scenarios. Further, the CEO said that the company’s in-house Turing chip is progressing well, with mass production for vehicles, flying cars, and humanoid robots expected to begin this year.
Meanwhile, luxury automaker Zeekr, controlled by Geely Auto (GELYF), announced that at the Shanghai Autoshow, it would officially introduce its 9X SUV with the L3 autonomous driving capabilities, backed by the company’s G-Pilot artificial intelligence (AI)-powered smart driving system. Zeekr aims to start deliveries of the 9X SUVs in the second half of this year.
The launch of EVs with L3 autonomy by XPeng and Zeekr comes amid intense competition in the EV space. The technology and innovation of Chinese EV makers present significant threats to Tesla (TSLA). Aside from competitive pressures, Tesla stock is also declining due to concerns over the distraction caused by CEO Elon Musk’s political activities.
Here’s How XPEV and ZK Stocks Have Performed
Zeekr stock has risen 11% so far this year, while XPeng stock has rallied nearly 113%. On Tuesday, XPeng reported a narrower Q4 2024 loss compared to the prior-year quarter but lagged expectations. That said, the company guided for robust Q1 2025 revenue growth in the range of about 129.1% to 139.8%.
While no analyst has recently assigned a rating to ZK stock, Wall Street has a Moderate Buy consensus rating on XPeng stock based on four Buys, four Holds, and one Sell recommendation. The average XPEV stock price target of $18.91 implies a downside risk of 16.5% following the stellar rally so far this year.
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