HSBC upgrades XPeng to Buy, sees VW deal as trigger for earnings growth

As previously reported, HSBC analyst Yuqian Ding upgraded XPeng (XPEV) to Buy from Hold with a price target of $22, up from $15.40. The firm sees the collaboration with Volkswagen (VWAGY) as an important milestone for the development of autonomous driving. As EVs become increasingly commoditized, HSBC sees differentiated software as an important competitive advantage which will boost sales. A tie-up with a global brand like Volkswagen should also increase traction with consumers. The firm also raised its 2024-2025 earnings forecasts on higher auto sales and growth in software revenue.