Research Note

Xpeng delivered better-than-expected third-quarter operating results, accompanied by a slightly better-than-feared outlook.

Morgan Stanley sees the price of lithium carbonate in China falling to $47,500 per ton in the second half of 2023, implying a 35 percent drop from the current spot.

The key to Xpeng regaining relevance is winning back demand, and that could take several quarters, creating significant uncertainty heading into 2023.

Edison Yu's team predicts Nio will deliver 13,500 units in November and 19,500 units in December.

Industrial Securities believes that Xpeng's short-term model changeover and sales pressure will not affect the company's long-term value.

Nio reported mostly soft 3Q results, especially on margin, but provided a better than-feared 4Q volume outlook.

For most of the best-selling electric vehicle models, the amount of subsidies as a percentage of the selling price is only 4-11 percent this year, CITIC Securities said.

Edison Yu's team expects China NEV sales momentum to pick up in November and December, when a host of new models should drive sales to new highs and NEV subsidies are poised to exit.

"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.

Deutsche Bank analyst Edison Yu's team expects several new product cycles to drive sales up in November and December, and sales should also broadly benefit from NEV subsidies that expire at the end of the year.