Chinese EVs In The Spotlight: Goldman Sachs Upgrades XPeng And Nio Stocks, Hikes Price Target

Analyst Tina Hou upgraded XPeng to ‘Buy’ from ‘Neutral’ with a price target of $24, up from $16.40.

Goldman Sachs on Tuesday upgraded U.S.-listed Chinese EV companies Nio Inc. (NIO) and XPeng Inc. (XPEV), citing significant positives.

Analyst Tina Hou upgraded XPeng to ‘Buy’ from ‘Neutral’ with a price target of $24, up from $16.40. The new target represents nearly 29% upside to the stock’s closing price on Monday.

A series of efforts, including organization and supply chain restructuring, have transformed the company's product and cost structure competitiveness, providing higher visibility for sustainable sales volume growth as well as profit margin improvement, the analyst told investors.

Based on improvements in both product competitiveness and cost structure, the firm raised its 2025, 2026, and 2027 net profit estimates for XPeng, primarily due to higher volume estimates, the analyst noted.

In April, XPeng said that it expects to deliver between 102,000 and 108,000 vehicles in the second quarter alone, representing a year-over-year increase of approximately 237.7% to 257.5%.

The brokerage on Tuesday also upgraded Nio to ‘Neutral’ from ‘Sell’ with a price target of $3.80, up from $3.70.

The new target represents a near 8% upside to the stock’s closing price on Monday.

The firm believes that Nio management's cost reduction efforts will help improve the company's profit levels by 4% to 10% over the next three years.

Nio has been focusing on cost reduction through a series of cost control and efficiency improvement measures since March, and these measures are expected to start showing a positive impact on costs and profits starting from the third quarter, according to the analyst's research note.

Goldman, however, remains "relatively more conservative" on Nio's fiscal 2025 sales volume compared to management's target, largely due to the ongoing industry competitive intensity and overall demand outlook.

Nio said earlier this month that it expects to deliver 72,000 and 75,000 vehicles in the second quarter of 2025, representing an increase of approximately 25.5% to 30.7% from the same quarter of 2024.

On Stocktwits, retail sentiment around XPEV fell from ‘bullish’ to ‘neutral’ over the past 24 hours while message volume remained at ‘normal’ levels.

Meanwhile, retail sentiment around NIO stayed unmoved within ‘bearish’ territory over 24 hours while message volume fell from ‘normal’ to ‘low’ levels.

While XPEV stock traded 1% higher as of Tuesday noon, NIO stock fell 1%.

XPEV stock rose 63% this year while NIO stock fell 23%.

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