Nomura Downgrades EV Maker XPeng to Neutral, Prefers BYD and Li Auto Over Nio

July 1, 2022 8:38 AM EDT
Get Alerts XPEV Hot Sheet
Price: $24.41 -0.81%

Rating Summary:
    17 Buy, 5 Hold, 0 Sell

Rating Trend: Down Down

Today's Overall Ratings:
    Up: 8 | Down: 40 | New: 22
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Nomura analysts Martin Heung and Benjamin Lo moved to slash their rating on the XPeng (NYSE: XPEV) shares to Neutral from Buy, citing “unavoidable” short-term cash burn. The price target is cut to $36.30 from the prior $64.60.

Similarly, Nomura analysts slashed the price target on Nio to $25.80 per share from $51.50 on concerns that the ES7 SUV model’s revenue contribution may persist.

Instead, Nomura advises its clients to buy BYD shares due to its vibrant product pipeline and Li Auto (NASDAQ: LI) given the better-than-expected debut of the L9 model.

Earlier today, XPeng reported electric vehicle (EV) deliveries for June of 15,295 units.

This number marks a 133% increase YoY and a 51% increase MoM. All in all, year-to-date deliveries are 68,983.

“Beginning in mid-May, XPeng accelerated deliveries with resumed double-shift production at its Zhaoqing plant and notably, in June, the Company reached the milestone of 200,000 cumulative deliveries," XPeng said in a press release today.

XPeng’s P7 model again dominated sales after the company delivered another 8,045 units in June. The company added that it plans to start accepting pre-orders for its G9 SUV starting from August.

By Senad Karaahmetovic

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Nomura, Senad Karaahmetovic