Morgan Stanley Reiterates Overweight on XPeng, $34 PT
Morgan Stanley analyst Tim Hsiao reiterated an Overweight rating and $34.00 price target on XPeng (NYSE: XPEV).
“XPeng targets ~20% group GPM in 1Q26 and mid- to high teens group GPM for full-year 2026: Higher share of overseas sales, Ultra take rate, and scale benefits will support full-year margins, though sequential GPM contraction in 2H26 is expected in view of higher share of vehicle revenue as deliveries of new models take off.
XPeng targets Rmb12bn R&D spending in 2026 (+26% YoY) – including Rmb7bn for AI initiatives (vs. Rmb4.5bn in 2025); SG&A ratio is expected to fall YoY.
VLA 2.0 upgrades planned quarterly: 2Q’s upgrade will significantly expand coverage in small roads and carparks.
Overseas rollout planned for year-end, with testing showing impressive early results despite limited training data.
XPeng looks for commercial robotaxi operations to begin 2H26 (with safety driver), targeting removal of safety driver by 2027.
XPeng will also consider strategic partnerships for overseas robotaxi launch in 2027.
Humanoid production targets 1k+ units/month by year-end: XPeng will initially focus on commercial scenarios, then industrial applications, before consumer expansion.
Management expects hardware BoM cost to decline with mass production, though software R&D investments will remain substantial.”
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