XPeng: Beware the Post-Earnings Relief Rally

XPeng Inc. reported third-quarter earnings on Nov. 30. Despite falling short of analysts expectations, shares of the Chinese electric vehicle manufacturer soared in the session following the latest earnings print.
Earnings leave much to be desired
Based on the numbers, XPeng had little to celebrate in the third quarter. The automaker delivered just 29,570 vehicles. While this represented a 15% increase from the same period last year, it also marked a 14% decline sequentially.
Animal spirits drive relief rally
XPeng saw its stock soar, rising as much as 47% during the trading session following the earnings announcement.
What could possibly have caused such a spectacular rise following such an anemic earnings print?
The principal answer seems to be pure psychological relief. Lockdowns and other restrictions have harmed many manufacturers, including EV makers, as production has been stalled, supply chains strained and consumer demand dampened.
The management comments that the bottom is in sight for deliveries. This has rejuvenated hope among battered investors.