By Michael Elkins
Morgan Stanley reiterated an Overweight rating and $12.00 price target on XPeng (NYSE:XPEV) after the electric vehicle company reported that it delivered 6,010 units in February, a 15% increase over January’s numbers.
RMB20K-RMB36K ($1 = RMB6.8656) price cuts in mid-January seemed to provide some sales boost to the legacy models as G3, P7, and P5 registered stronger MoM growth while G9 sales stay suppressed at around 1K units (vs.2,249 units in January).
Morgan Stanley analysts wrote in a note, “Management's previous comment of flat QoQ deliveries implies 11K unit sales in March. Volume upside will hinge on the new P7, which will start deliveries later this month. In addition, XPeng’s City NGP (navigation guided pilot) will soon be rolled out on multiple models in a number of cities including Shenzhen and Shanghai. It’s worth monitoring whether the OTA update of CNGP and the launch of G7 turn out to be game-changers.”
Shares of XPEV are down 0.6% in premarket trading on Wednesday.