Earnings Preview

"Our gross margin is meaningfully higher as we believe Nio will recognize the majority of its regulatory credit sales in 3Q, similar to last year," writes Deutsche Bank analyst Edison Yu's team.

An increase in vehicle prices and an upward pivot in its product sales mix are seen as the main reasons why BYD beat earnings estimates in the second quarter.

Edison Yu's reiterated Nio as their top pick for China electric vehicles and kept Buy rating for the stock.

Edison Yu's team expects Xpeng deliveries to trend toward the weaker side in August, with no significant recovery until the fourth quarter when the G9 SUV is delivered.

Deutsche Bank raised its forecast for Li Auto's deliveries this year to 160,000 units from 155,000, but believes the company could face some incremental headwinds in 2023.

Goldman Sachs maintains BYD's shares traded in Hong Kong on its Conviction Buy list with a price target of HK$405.

Deutsche Bank analyst Edison Yu's team cut their price target on Nio by $5 to $45, but said Nio is on track to return to its product super cycle this year.

Deutsche Bank analyst Edison Yu's team lowered their price target on Xpeng by $2 to $53, taking into account slightly lower expected sales.

Deutsche Bank analyst Edison Yu's team lowered their price target on Xpeng by $2 to $55, maintaining a Buy rating.

Deutsche Bank maintains a Hold rating on Li Auto and a $34 price target, implying a 14.8 percent upside.