A Chinese EV maker’s bet on driver-assist tech is finally paying off — its shares are up more than 80% this year
As driver-assist systems gain traction in China, one local startup that invested in the tech years ago is finally seeing results. Xpeng , listed in the U.S. and Hong Kong, has delivered more than 30,000 cars a month since November. The company last week said it expects that pace to continue for a doubling in sales versus 2024 — and that it will achieve profitability in the fourth quarter. What’s selling is the company’s lower-priced Mona M03 and its Xpeng-branded P7+ car, which includes advanced driver-assist software at no extra cost. With the automaker’s plans to upgrade the P7 and release other new cars this year, Bank of America analysts on March 18 said they “expect the strong model pipeline to support Xpeng’s strong volume growth in 2025-26.” The analysts raised their price target on the stock to $27, up from $18.60 previously. That’s upside of more than 20% from Thursday’s close. Bank of America rates Xpeng a buy. The electric car company’s shares have pulled back slightly after briefly doubling in price on a year-to-date basis earlier this month. Xpeng has “turned around its sales momentum” in the last 12 months thanks to its lower-priced Mona-branded M03 and Xpeng-branded P7+ launches, Barclays analysts said in a Thursday report. “While the product pipeline looks impressive, needless to say the ultimate customer acceptance of these new models depends on many factors in the highly competitive Chinese EV market,” the analysts said. They raised their price target to $20, from $7 previously, while maintaining an underweight rating. The price target increases come as industry giant BYD last week announced ultra-fast charging technology, on top of its launch in February of driver-assist systems for a range of its cars — signaling the once niche feature is going mainstream. BYD shares are up around 45% year-to-date in Hong Kong. The “Chinese market is [at] an autonomous driving turning point,” said Shay Natarajan, a partner at Mobility Impact Partners, a private equity fund that invests in transportation. She pointed out that electric car companies in China are offering not only basic driver-assist known as L2, but moving on to more autonomous features known as L3. Fully autonomous driving without a human driver is called L4. “What this means for automakers who don’t offer free L2 autonomy in China today (like Tesla), is that they will most likely start to offer L2 autonomy for free and start to release and charge fees for L3 autonomy features in the [near] future,” she said. Xpeng made driver-assist its selling point from its early days; in 2023 its former head of autonomous driving even went to work at Nvidia, which sells chipsets for assisted driving. Xpeng cars use some of those chips. But despite the tech features, the startup’s early cars didn’t gain significant traction in China until the launch of mass-market brand Mona last summer. A version of Xpeng’s more advanced driver-assist system for navigating city streets is also coming for the Mona brand as a higher-end “Max” version of the M03 is due for release in May, Xpeng management said in an earnings call, according to a FactSet transcript. The car is set to be priced around 150,000 yuan ($20,690). “Consensus 2025 earnings for Xpeng have been raised by 10% in the past one month and our forecasts remain above the street,” J.P. Morgan Asia Pacific autos analysts said in a report Wednesday. They have an overweight rating on the stock. “We revise our forecasts to reflect stronger sales volume but higher R & D expense as well as more conservative pricing,” the analysts said. They lowered their price target to $31 a share, down from $35 previously. — CNBC’s Michael Bloom contributed to this report.
