What happened

Shares of Chinese electric vehicle maker XPeng (XPEV -1.39%) had a strongmOctober, gaining 31.2%, according to data from S&P Global Market Intelligence. While that still only brings its year-to-date return to about 8%, the company is showing momentum in its business that investors are giving it credit for. 

So what

XPeng delivered more than 10,000 vehicles in October for the second month in a row. Those figures represent at least a year-over-year tripling of deliveries each month. Notably, better-known competitor Nio (NIO 3.49%) delivered only 3,667 vehicles in October, both because of supply chain constraints and an outage to upgrade its manufacturing lines as overall electric vehicle demand grows in China.

vehicle interior with autonomous driving features.

Image source: Getty Images.

The strong results from XPeng helped it surpass the 100,000-vehicle milestone at the end of October. And it wasn't just sales growth that had investors excited. The company also held its Tech Day 2021 last month, where it launched upgrades to its assisted driving features that look to challenge Tesla (TSLA 12.06%) in the Chinese market. 

Now what

In September, XPeng launched its latest new vehicle, the P5 smart family sedan line. The company said it delivered 437 of the new electric cars in October and has "a solid order backlog" for the new sedan. Overall, despite industrywide supply chain issues and a global semiconductor shortage, XPeng has grown its year-to-date deliveries by 289% so far in 2021. 

Amid growing demand, XPeng is expanding its supercharging facilities throughout China. As of the end of September, the company said its "branded supercharging network spans urban commuting thoroughfares and highways through 439 stations across 121 Chinese cities."

But it might be its semi-autonomous driving system update and its outlook that got investors most excited to own shares in the company in October. During its Tech Day 2021 presentation on Oct. 24, XPeng launched the newest version of its advanced driver-assistance system, and it included a feature for autonomous city driving. The system, called XPilot 3.5, will be available soon to owners of the new P5 sedan early next year. 

The XPilot is XPeng's answer to rival Tesla's Autopilot assisted driving system. XPeng also announced it will release XPilot 4.0 in the first half of 2023, and it will be a step toward the company's plans for fully autonomous vehicles. It will be built on a hardware upgrade and will include everything from powering the vehicle on to parking assistance, along with the highway and city driving features that Version 3.5 offers. 

Investors bid XPeng shares up in October, not just because sales are exploding with demand, but also on the expectation that the company will also be a leader with its technology for assisted and autonomous driving.