XPeng Analyst: Automaker Leads Chinese EV Market In Autonomous Driving

Chinese electric vehicle manufacturer Xpeng Inc – ADR XPEV is poised for an acceleration in sales growth, according to an analyst at BofA Securities.

The XPeng Analyst: Ming Hsun Lee reiterated a Buy rating on XPeng with a $54.10 price target.  

The XPeng Thesis: XPeng's partnership with Livox to adopt lidar as a new component for its next-gen autonomous driving architecture will help improve the high precision object recognition performance of its vehicles, Hsun Lee said following an investor call with XPeng executives. 

The company plans to have two lidars, one on each side of the vehicle, which should have a field of view of 180 degrees on the front side, the analyst said.

Related Link: Xpeng Is Positioning Itself As Tech Leader Among China's 'Fab Four' EV Makers, Deutsche Bank Says

XPeng has a key edge over other Chinese automakers in autonomous development, as it designs the full stack of software and algorithms, allowing it to collect perception data to improve its database, he said. 

XPeng is in a good position to lead on autonomy in China and provide more tailor-made solutions compared with some peers, Hsun Lee said, citing Xinzhou Wu, XPeng's vice president of autonomous driving. 

Level 4 autonomy will require no driver intervention, which significantly amplifies the difficulty, the analyst said.

In terms of computing and chips, it will require a redundant design in case of any main chip failures, escalating costs, he said. 

Wu told BofA he expects robotaxis to be commercialized in 2025, and believes that most peers are still far away from reaching Level 4 autonomy, according to the sell-side firm. 

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XPeng is planning to launch the LFP battery versions of the G3 and P7 models, given that the battery pack design is similar to its previous NCM battery pack design, Hsun Lee said.

The company also did not rule out the possibility of adopting a hybrid solid-state battery in the future when cost and quality become satisfactory, he said. 

BofA said it sees Xpeng as capable of launching further autonomous functions that will help attract more consumers and boost volume sales.

XPEV Price Action: At last check, Xpeng shares were soaring 13.79% to $50.41. 

Related Link: BofA Raises XPeng Price Target, Sees More Upside Ahead For EV Stock