The Xpeng brand will have a total of 10 models based on the SEPA 2.0 platform, many of which will be launched in 2024-2025. The Mona project's A-class sedan is scheduled for launch in the second half of the year.
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Xpeng (NYSE: XPEV) has a strong pipeline of new models over the next two years, including both Xpeng-branded models and new models from the Mona project, BofA Securities said.
BofA held a conference call with Xpeng management to discuss the company's business update and 2024 outlook, according to a January 16 research note sent to investors.
"Xpeng targets much higher sales volume growth than the industry's in 2024, mainly driven by 1) solid new models pipeline in 2024-25; 2) continuous sales network expansion, optimization and upgrade, and penetration into tier-3/4 cities; and 3) export sales," analyst Ming Hsun Lee's team said in the note.
Xpeng launched the X9 in January and is targeting 5,000 deliveries of the MPV model by the Lunar New Year in early February, the team noted.
It plans to accelerate the rollout of new models from the second half of the year, starting with an A-class sedan based on the Mona project, according to the report.
The new car, priced at around RMB 150,000 ($20,860), will begin mass production in the third quarter, the team said, adding that Xpeng expects to launch more new A-class models based on the Mona project in 2025-2026.
Xpeng announced in August 2023 that it would acquire the electric vehicle business of ride-hailing giant Didi Global and would launch the Mona project in 2024 based on the partnership between the two.
The Xpeng brand will have a total of 10 electric models based on the SEPA 2.0 (Smart Electric Platform Architecture) platform, many of which will be launched in 2024-2025, BofA said.
The Xpeng brand will focus on models in the RMB 200,000 to RMB 400,000 price range, while the Mona brand will target the A-class market in the RMB 100,000 to RMB 200,000 price range, the company's management said, according to the note.
SEPA 2.0 is Xpeng's vehicle technology platform launched in April 2023, and the first model based on it is the G6 SUV.
Xpeng exported thousands of G9s and P7s in 2023 and is targeting export sales of more than 10,000 units in 2024, the BofA noted.
In addition, Xpeng plans to launch the G6 in overseas markets in the second quarter and expand to right-hand drive regions, including the United Kingdom, Australia, and Southeast Asian countries to boost export sales, according to the note.
Xpeng's gross margins will expand in 2024 due to better mix and lower costs, with gross margin guidance factoring in price discounts from competition, according to BofA.
Despite increased competition in 2024, Xpeng is confident of gross margin expansion in 2024 driven by better product mix and cost reduction through engineering and tighter supply chain management, the team noted.
In addition, Xpeng has witnessed improvements in software algorithms supported by more data from existing users, and expects the BOM (bill of materials) cost of the XNGP (Xpeng navigation guided pilot) to drop from RMB 25,000 to below RMB 20,000 in 2024, according to BofA.
BofA maintained its Buy rating on Xpeng with an $18 price target.
($1 = RMB 7.1918)
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