XPeng's Solid Outlook Still Intact, Jefferies Says

XPeng is likely on track for a turnaround, backed by firm orders for its G6 SUV, Jefferies analysts say in a research note. The Chinese electric-vehicle maker indicated that monthly sales of the new model could exceed 10,000 units by 4Q as supply constraints get resolved, they note. The impact of inventory write-downs will linger in 3Q, but the company expects gross margin to turn positive in 4Q, they add. Also, it aims for positive quarterly free cash flow in 2024 and targets break-even in 2025 about a year earlier than the consensus call on Wall Street, the analysts note. Jefferies reiterates a buy rating on the stock, with tp of HK$99.10 and USD25.30.

XPeng ended the second quarter with almost USD5 billion in cash on the books. Along with the VW investment, it has no near-term cash worries.