XPeng Inc - ADR XPEV and Li Auto Inc LI reported stellar monthly deliveries for July.
The EV Analyst: BofA Securities analyst Ming Hsun Lee maintained a Buy rating and $52 for XPeng shares.
The analyst also maintained a Buy rating and a $39 price target for Li Auto shares.
The EV Theses:
BofA Sees Strong Sales Momentum For XPeng: After XPeng reported record July deliveries of 8,000 units, Hsun Lee said he expects the EV maker's solid product pipelines to help continue its strong sales momentum.
XPeng expects to deliver its G3i, the refreshed version of its G3 all-electric SUV, in September and its P5 vehicles in the fourth quarter, the analyst added.
The company's first plant in Zhaoqing, the second factory under construction in Guangzhou and the proposed Wuhan factory will give a combined maximum annual capacity of 500,000 units, the analyst said.
"We expect the launch of Wuhan factory will largely enhance XPeng's manufacturing abilities and support its model pipelines ahead," Hsun Lee said.
XPeng will likely see sales volume compounded annual growth rate of 60% between 2021 and 2023, thanks to its robust new model pipeline, in-house software in autonomous driving and superior powertrain capability, the analyst said.
Related Link: XPeng Unveils The P5, A LiDAR-Equipped New Sedan Model With Advanced Features And Tech
Li Auto Poised For More Growth After Record July Performance, BofA Says: Li Auto's July deliveries grew 251% year-over-year and 11% month-over-month to 8,600, Hsun Lee said.
The company plans to provide OTA upgrade to enhance the competitiveness of Li One model by end of 2021, the analyst added.
For Li Auto, the analyst expects 47% CAGR in volume sales over 2020-2025, helped by rising EV penetration and robust demand on luxury/premium segment, solid new model pipeline, fast point of sales expansion and extended-range EV.
Extended-range EV, the analyst said, is a practical solution to mitigate consumers' concern about range anxiety and proven by Li Auto to create demand in China EV market.
EV Stock Price Action: At last check, XPeng shares were rallying 7.61% to $43.61 and Li Auto was climbing 1.86% to $34.01.
Related Link: Tesla Vs. Nio Vs. XPeng Vs. Li Auto: How EV Regulatory Credits In China Stack Up
Photos: Top: Li Auto; Bottom: XPeng
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