Pricing information for the XPeng G9 has yet to be released, and analysts at Morgan Stanley believe that will be the most important factor for the market to gauge the G9's sales prospects.
XPeng Motors has had no new models on the market so far this year, unlike its local peers NIO and Li Auto. Now, the opening of reservations for its flagship SUV is starting to stir some optimism.
The G9 will be a key catalyst for XPeng stock in the second half of the year and the company's main offering in the premium SUV segment, Morgan Stanley analyst Tim Hsiao's team said in a research note sent to investors on August 10.
"We believe market feedback on G9 will dominate XPeng's stock movement," the note reads.
As background, XPeng originally unveiled the G9 at the Guangzhou auto show in late November last year, but only briefly described a handful of information at the time, including that the model would be based on an 800V high-voltage SiC platform and use Nvidia's DRIVE Orin chip.
The company had planned to announce more details at the Beijing auto show, but the show, originally scheduled for late April, has been postponed due to Covid concerns and no new date has been set.
XPeng announced on August 10 that the G9 became available for consumer pre-orders and that the official launch would take place in September.
On August 11, the company said XPeng G9 orders reached 22,819 units in 24 hours after opening for pre-orders.
Pricing information for the XPeng G9 has not yet been released, and the analysts at Morgan Stanley believe this will be the most important factor for the market to gauge the G9's sales prospects.
Pricing information for the model will not be available until its official release in September, and while it is difficult to determine pricing at this time, several versions are expected to be launched sequentially in September or the fourth quarter, according to the note.
The team expects the XPeng G9 flagship version to be priced close to RMB 350,000 ($52,000) - 400,000, while versions priced around RMB 300,000 should be the key sales driver.
Models priced above RMB 300,000 accounted for 18-20 percent of total new energy vehicle (NEV) sales in China in the first half of the year, the team noted, adding that consumers are expected to compare the G9 to those with similar pricing and wheelbases, such as the NIO ES7, Tesla Model Y, Li Auto's Li ONE and Li L9, and Geely's high-end electric models.
The team said they don't think the market has a strong view on G9 sales because of the lack of pricing information and a very competitive market with new models coming in.
Overall, however, market feedback on the G9 is currently skewed to positively, with many investors expecting 4,000-6,000 monthly sales initially, the team said, adding that they expect this expectation to be quite volatile, as happened with the Li L9 earlier this year.
With the supply of certain components likely to remain tight, a smooth production run will be a challenge, especially since the G9 will be a pioneer in some advanced technologies, according to the team.
The team reiterated its Overweight rating and $41 price target on XPeng. The company closed up 7.47 percent to $24.61 in the US, and the price target implies a 66.6 percent upside.