Morgan Stanley Reaffirms ‘Overweight’ Rating on XPeng

Morgan Stanley analyst Tim Hsiao reiterated on September 26, 2025, an ‘Overweight’ rating and HK$108 price target on XPeng.

“We replace BYD Company Limited with XPeng in both our GEM and APxJ Focus Lists: XPeng has a robust model pipeline and is also identified as a leading AI adopter.

With successful launches of several new models and a strong pipeline, Tim Hsiao and team expect XPeng’s monthly sales to take off in 2025 and expand further in 2026, underpinned by the debut of its super electric hybrid system.

More meaningful margin improvement should materialize from 2025 when scale benefit of new models kicks in fully.

XPeng’s announcement of a strategic partnership with Volkswagen is likely to be a critical step for vehicle makers to move beyond the traditional business model and generate a new revenue stream mainly from software/service, which is higher-margin and recurring.”

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