Analysts weigh in on Chinese EVs, make predictions on Tesla's Robotaxi event

That's any other week, and Chinese automakers are still on analysts' minds. Every other Chinese automaker is grabbing attention, while XPeng (XPEV) and Li Auto (LAAOF) are grabbing the eye of alternative Western firms.

News for NIO

Despite being publicly traded on the New York Stock Exchange, there's a sturdy chance that you may have got got you may have gotten never heard of Chinese electric automaker NIO, and or not it truly is the reason okay.

On the choice hand, unlike manufacturers like BYD, whose reputation for cheap cars led them to develop their first supercar, NIO (NIO) started on the choice end.

In 2019, Richard Hammond led a featurette on the Amazon Prime automotive show The Grand Tour featuring NIO's EP9 supercar. Earlier than filming the test, Hammond crashed a in the same fashion powerful electric sports car on a hillclimb in Switzerland, but he found the NIO to be a distinct beast altogether.

"That direct, immediate power you get from these electric supercars is like nothing else. That's like one minute, I am here and then, bam, I am over there," Hammond exclaimed from the driving force's seat of the NIO. "That's like driving a jet engine."

At present time, NIO's bread and butter is now now not hardcore, track-handiest sports cars akin to the EP9 but a line of crossovers and sedans. In March 2024, the automaker also launched a new sub-brand often called Onvo, which targets the mass-market sector.

On the choice hand, unlike its contemporaries, BYD or Li Auto, NIO is now now not profitable.

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Despite recording stronger margins and record sales all of the way through its second quarter 2024 earnings on September 5, NIO recorded a net lack of an equivalent of $721.2 million.

The identical day, Citibank analysts opened what it calls a “30-day positive catalyst watch," waiting for revenue growth as the corporate scales up production. Additionally, Citi noted that NIO is trading at a 30-forty% cut price when put next with rival XPeng, which may well open up an arbitrage opportunity. Analysts at Citi still keep a Buy rating but have lowered their price target from $eight.50 to $7.

Over at JPMorgan, analyst Nick Lai upgraded NIO stock rating from Neutral to Overweight. He raised its price target from $5.30 to $eight, noting that he expects “a sharp decline in cash burn and better operating cash float” within the rest of the year.

“With the stock price halving YTD and hence expectations low, we agree with Nio may most likely exhibit a relief rebound beyond year-end, driven by financial and operational turnaround,” Lai wrote in his analyst note. “Especially, we project that a sharp decline in cash burn and better operating cash float in 2H24 will greatly make bigger investors’ confidence in Nio’s financial status."

Morgan Stanley analyst Tim Hsiao updated its price target to $6.10. He listed an Overweight rating on NIO, while Bank of The u.s. analyst Ming Hsun Lee maintained a neutral rating and raised its price target from $5 to $5.30.

Bear moves for Li Auto

On August 28, Chinese electric automaker Li Auto reported better-than-expected ends in its Q2 2024 earnings report in spite of thinned margins in a "price competition" driving prices down within the People's Republic. This included an make bigger in vehicle deliveries of 25.5%.

These results drove analysts in different directions, but most notably, JPMorgan analyst Nick Lai recommended investors reassess their positions if the manufacturer doesn't develop new EVs by 2025.

This week, any other analyst at a Western back sounded the alarm.

On September four, analysts at Citibank downgraded Li Auto stock from Buy to Neutral and decreased their price target from $26.20 to $21.60.

Of their note, they justify the downgrade on concerns of Li Auto's increased competition from other firms like Huawei and Denza, which may well push the corporate to shorten the lifespan of its L7, L8, and L9 models even sooner. The firm's first car, the Li ONE, had a lifespan of just 16 months that you're ready to purchase. The L7, L8, and L9 were introduced in 2022, and the analysts await the introduction of their replacement model by 2025.

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Bull moves for XPeng

Previously, analysts from JP Morgan, Barclays, Bank of The u.s., and Citibank lowered the pricetag targets of Chinese EV automaker XPeng, citing second-quarter 2024 losses and revenue that disappointed them.

Last week, Macquarie analyst Eugene Hsiao upgraded its Neutral rating on XPeng stock to Outperform, with a $10 price target, citing that the logo's new MONA M03 is "the same name and similar car" to Tesla's Model Three "but at nearly 1/2 of the pricetag."

Introduced last week, the XPeng MONA M03 can prove to be the logo's "Tesla Moment," as it seeks to edge the Tesla Model Three in every aspect, including price.

Priced from the equivalent of about $16,800 to around $21,850, the XPeng MONA M03 can provide a compelling decision for Chinese auto buyers taking a look out out something that edges Musk's Model 3s.

JPMorgan analyst Nick Lai thinks so, too. In his analyst note published on September four, Lai said that interest within the MONA M03 may most likely be the driving force on the back of an make bigger in deliveries for remainder of the year, which he estimates at 45,000 deliveries in Q3 2024 to about Eighty,000 in Q4 2024.

Lai also upgraded XPeng shares to Overweight from Neutral with a price target of $eleven.50 from $eight.

Tesla dreams or delusions?

With nearly a month to head until Tesla's Robotaxi event on October 10, which is reportedly set to happen on the Warner Bros. Studios backlot in Burbank, California, investors and analysts have many expectations that may or may now now not be fulfilled.

Morgan Stanley analyst Adam Jonas has high expectations. On September 5, he reiterated his firm's stance on Tesla being the "top %" within the automotive sector, cautioning investors to “keep expectations well managed” but reiterated the root that surprises may most likely be upfront.

He speculated that the event would exhibit a demonstration of FSD and a fully independent ‘cyber-cab’ on "a closed/semi-closed course," but he did now now not rule out any other ideas that the seemingly Willy Wonka-esqe Tesla engineers and clothier have up their sleeves.

“May we see an electrical plane? A boat? The most modern gen Optimus robot flipping burgers at a Tesla Diner?" Jonas gleefully asked those reading his analyst note.

We may wait and spot.

Morgan Stanley maintains its Overweight rating on Tesla shares and has a price target of $310.

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