XPeng Inc.-ADR XPEV has been the darling of the Chinese EV market, posting a 66% gain over six months. However, technical signals suggest the stock's momentum may be stalling.

After a December delivery surge and ambitious plans with Volkswagen AG VLKAF VLKPF, XPeng's stock has slipped 12% in the past month, and the charts are raising red flags.

XPEV Stock Chart’s Technical Breakdown

Chart created using Benzinga Pro

XPEV stock, at $12.39, is lagging behind its 20-day ($12.55) and 50-day ($12.52) simple moving averages—both bearish signals. The MACD (moving average convergence/divergence) reading of negative 0.15 and an RSI (relative strength index) of 50.25 signal caution, as the stock inches closer to bearish territory.

Yet, the 200-day moving average of $9.54 offers a glimmer of hope, keeping the long-term trend bullish.

Volkswagen Collaboration: A Strategic Jolt?

XPeng's partnership with Volkswagen could be a game-changer. The duo plans to establish over 20,000 super-fast charging points across 420 Chinese cities. This strategic move not only strengthens XPeng's domestic footprint but also pits it directly against Tesla in the EV charging arena.

Volkswagen, which acquired a 4.99% stake in XPeng for $700 million last year, is banking on the collaboration to deepen its China roots. Together, the firms aim to develop two EV models for the Chinese market by 2026, signaling a long-term commitment to innovation.

December Deliveries Shine, But Challenges Loom

XPeng's December deliveries surged 82% year-over-year, driven by its affordable Mona M03 sub-brand.

With over 15,000 units sold, Mona is shaping up to be a volume driver, undercutting Tesla Inc's TSLA Model 3 on price.

However, the stock's technical challenges and increasing competition could weighs on future performance.

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