Bank of America thinks XPeng’s partnership with Volkswagen is enough to significantly improve the company’s outlook. The firm upgraded the Chinese electric vehicle maker to buy from neutral on Monday with a $22 per share price target. BofA’s forecast implies roughly 49% upside from Friday’s $14.98 close. Analyst Ming Hsun Lee said the company’s partnership with VW, where both firms will collaborate on EV technology to develop two models for the Chinese market in 2026 , will help XPeng secure a stronger financial future. Specifically, the analyst cited three benefits from the partnership: “(1) investors’ concerns over XPeng’s fast cash burn will be lower, which supports valuation; (2) XPeng’s AD capability is endorsed. We estimate it to record annual technology service income of RMB200-300mn per annum in 2024-25; (3) XPeng could manage cost better through larger scale procurement and stronger supply chain shared with VW.” The analyst added that she also expects XPeng to turn a profit 2025, compared to a previous forecast which called for a loss. Lee also said XPeng’s improving product lineup will add to sales volume growth. XPeng has added nearly 51% from the start of the year. XPEV YTD mountain XPeng has climbed more than 50% from the start of the year. To be sure, the stock dropped more than 4% after XPeng reported a larger-than-expected net loss for the second quarter . — CNBC’s Michael Bloom contributed to this report.
