XPEV WACC - Weighted Average Cost of Capital
The WACC of Xpeng Inc (XPEV) is 6.6%.
| Range | Selected | |
| Cost of equity | 5.8% - 8.0% | 6.9% |
| Tax rate | 0.3% - 0.4% | 0.35% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 5.7% - 7.6% | 6.6% |
| Category | Low | High |
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 0.43 | 0.55 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 5.8% | 8.0% |
| Tax rate | 0.3% | 0.4% |
| Debt/Equity ratio | 0.16 | 0.16 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 5.7% | 7.6% |
| Selected WACC | 6.6% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| XPEV | Xpeng Inc | 0.16 | 0.81 | 0.7 |
| ELCR | Electric Car Company Inc | 87.26 | 0 | 0 |
| F | Ford Motor Co | 3.69 | 0.69 | 0.15 |
| FSR | Fisker Inc | 9.59 | 0.95 | 0.09 |
| GM | General Motors Co | 2.67 | 0.78 | 0.21 |
| LI | Li Auto Inc. | 0.01 | 0.91 | 0.9 |
| THO | Thor Industries Inc | 0.28 | 0.91 | 0.71 |
| WGO | Winnebago Industries Inc | 0.69 | 0.68 | 0.41 |
| KABE B.ST | KABE Group AB | 0.03 | 0.02 | 0.02 |
| SCT.LS | Toyota Caetano Portugal SA | 0.55 | 0.16 | 0.1 |
| Low | High | |
| Unlevered beta | 0.13 | 0.29 |
| Relevered beta | 0.15 | 0.33 |
| Adjusted relevered beta | 0.43 | 0.55 |
XPEV's CAPM model and how its cost of Equity is calculated
The Cost of Equity reflects the return a company needs to deliver to shareholders to justify the risk of investing in its shares. It’s computed using the Capital Asset Pricing Model (CAPM), which blends the risk-free rate, the stock’s beta, and the market risk premium.
This method evaluates the stock’s risk compared to a safe investment and the market’s overall volatility.
Here’s how we figure out the cost of equity for XPEV:
cost_of_equity (6.90%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.43) + risk_adjustments (0.25%)
We include the risk adjustments, which range from 0% to 1%, to keep our WACC conservatives, especially for companies traded in developing markets.