Daiwa Securities Upgrades XPeng to ‘Buy’
Daiwa Securities raised on November 19, 2025, XPeng’s price target to $29 (from $24), while upgrading the rating to ‘Buy’ (from ‘Hold’).
“What’s new
Xpeng released its 3Q25 results on 17 November.
The company has made good progress with VW on technical services, which should drive its margins in 2026E.
We upgrade our rating to Buy, from Hold, given Xpeng’s improving gross margin and competitiveness in robotaxis and humanoid robots.
What’s the impact
Targeted to reach break-even in 4Q25.
Xpeng booked revenue of CNY20.4bn for 3Q25, up 102% YoY, thanks to strong growth of both new car sales and technical services.
Its gross margin reached 20.1% for 3Q25, up 4.8pp YoY and 2.8pp QoQ, and net profit was CNY381m.
Xpeng will start deliveries of its X9 EREV from 20 November and targets to reach break-even overall in 4Q25.
Its cooperation with VW has progressed well so far
Xpeng will book revenue in 2026 once multiple milestones in technical services are achieved, while licence fees related to its Turing chip will likely be another revenue source.
New car and robotaxi business outlook for 2026.
Xpeng plans to launch 4 new car models in 2026, all with both BEV and EREV versions, in addition to launching 3 EREV versions of existing car models.
In overseasmarkets, it will rely on 2 overseas facilities in Indonesia and Austria (bypartnering with Magna) for local production.
Xpeng will roll out its robotaxiroad testing from 2026, building the robotaxi operation ecosystem as thepriority, and plans to extend its robotaxi services from China to theoverseas market in future.
We expect Xpeng’s robotaxi production to bewithin a few thousand units per year over 2026-27E.
Robotaxi business outlook
Xpeng plans to kick off production of itshumanoid robot, IRON, by the end of 2026.
Initial use would be in its ownstores, factories and campuses to work as a tour guide, and shoppingguide, per Xpeng.
Management mentioned an ambitious plan to sell 1munits of humanoid robots in 2030, however, there is ambiguity around short-term production volume over 2027-28E.
What we recommend
We upgrade Xpeng to Buy, from Hold, and raise our 12M TP to USD29, from USD24.
We revise up our revenueforecast for 2026E by 10%, and EPS by 66%.
We now expect Xpeng to sell554,000 new cars in 2026 (vs. our previous estimate of 493,000), including 1,000 robotaxis.
We also raise our revenue assumption for technicalservices to CNY7.7bn (from CNY6.6bn).
We look for the gross margin toreach 23% in 2026, due to the higher revenue mix of technical services.
Our TP is based on a rolled-over revenue per share of USD14.26 for2026E (from USD11.8 on 2025E) and unchanged PSR of 2x.
Key downside risk: lower-than-expected new-car sales.”
This research note is reproduced verbatim from the issuing firm. Price Target never edits, paraphrases or alters analysts’ words — we only republish them in one place.
