What happened

Many investors think of Nio (NIO 4.06%) when Chinese electric vehicle (EV) makers are being discussed. That's because it delivered almost 150,000 total vehicles, while its nearest pure-play EV competitor XPeng (XPEV 1.73%) only just passed the 100,000 mark at the end of October. But XPeng has out-sold Nio in both October and November, and investors seem to be taking notice. In the month of November, shares of XPeng jumped 17.9% according to data provided by S&P Global Market Intelligence.

So what

And it wasn't just delivery volume that has sparked investor interest in XPeng. The company launched a new vehicle in September, the P5 smart family sedan line. In October, XPeng held its Tech Day 2021 where it launched upgrades to its assisted-driving features that look to challenge Tesla (TSLA 2.99%) in the Chinese market. 

Grey XPeng P7 electric sedan on display outdoors.

XPeng P7 sedan. Image source: XPeng.

At a November auto show, management unveiled the company's fourth smart EV, the G9 SUV, which will be the first to support XPilot 4.0, the company's newest advanced driver-assistance system scheduled to be available in the first half of 2023.

Now what

Nio has arguably been the most widely expected domestic EV maker in China to challenge Tesla as the latter company increases volume out of its Shanghai facility. But XPeng is making a mark of its own with its recent results and new technologies. Its record 15,613 electric vehicles delivered in November represent an increase of 270% over the prior year period. Year-to-date deliveries have increased 285% year over year.

But it might be its progress in EV technology that has investors most excited. The XPilot is XPeng's answer to rival Tesla's Autopilot assisted-driving system. The new P5 sedan will utilize version 3.5, which will include everything from powering the vehicle to parking assistance, along with its highway and city driving features. The G9 luxury SUV will come with the next-generation XPilot 4.0.  

With the stock treading water for most of 2021, investors started bidding up shares more recently, causing the jump in November. While XPeng remains a speculative investment best for aggressive portfolios, its technology and new-vehicle launches could quickly grow the business into the $40 billion valuation the stock now represents.