Goldman Sachs·2025-07-14 00:36Investment Ratings - BYD: Buy [7][18] - XPeng: Buy [8][20] - Nio: Neutral [10][21] - Hesai: Buy [15][22] - Zhongsheng: Neutral [17][23] Core Insights - Demand & Stimulus: Management across the industry believes that government support will continue, and effective per vehicle purchase costs will not rise for consumers. Alternative forms of stimulus may emerge if trade-in programs diminish [1][14] - Industry Competition: Competition is expected to persist over the next 2-3 years, shifting focus from pricing to value. OEMs will launch new models with higher configurations at attractive prices, with market dynamics playing a larger role in pricing than government regulations [2][10] - Overseas Operations: OEMs with international exposure have reported strong overseas sales, with localized production capacities being developed to mitigate geopolitical trade tensions [3][7] - Autopilot Development: Autopilot technology is gaining traction, with improvements in functions and hardware. LiDAR adoption is increasing, and some OEMs are equipping multiple LiDARs per vehicle as they progress towards Level 3 capabilities [4][11] Summary by Company BYD - Sales Volume: BYD achieved total sales of 2.1 million units in 1H25, a 33% year-over-year increase. Inventory months decreased from 3 months in April to 2.2 months in June [8] - Overseas Expansion: BYD's overseas sales reached 464,000 units in 1H25, a 128% year-over-year increase, with multiple factories set to begin mass production [8] - Autopilot Features: The "God's Eye" autopilot system was launched, with plans for city memory autopilot capabilities by year-end [8] XPeng - Profitability Goals: XPeng aims for non-GAAP net profit break-even in 4Q25, with expectations of improved vehicle gross margins [11] - New Product Launches: XPeng plans to launch several new models, including a large EREV SUV in 4Q25, and has recently launched the G7 featuring advanced AI technology [8][11] - Sales Performance: XPeng's management is optimistic about maintaining competitive pricing while focusing on value [11] Nio - Sales Growth: Nio reported a total sales volume of 72,000 units in 2Q25, a 26% year-over-year increase, driven by new model launches [10] - Gross Margin Targets: Nio aims for a blended vehicle gross margin of over 15% by the end of 2025 [12] - Operational Efficiency: Nio is implementing operational expense reductions to improve R&D efficiency and overall profitability [10][12] Leapmotor - Sales Volume: Leapmotor achieved 222,000 units in sales volume in 1H25, a 156% year-over-year increase, with ambitious targets for future launches [14] - New Model Pipeline: The company plans to launch multiple new models in 2H25 and 2026, targeting a total delivery of 1 million units by 2026 [14] Hesai - Revenue Guidance: Hesai expects 2025 revenue between RMB 3-3.5 billion, with a gross margin around 40% [16] - Market Recognition: The company is gaining recognition from both domestic and global OEMs, with increased LiDAR adoption in the industry [16] - Production Capacity: Hesai targets an annual production capacity of 2 million units by the end of 2025 [16] Zhongsheng - Sales Performance: Zhongsheng maintains an annual sales volume target of 480,000-500,000 units, with a focus on AITO brand operations [19] - After-sales Services: The company anticipates growth in revenue from after-sales services, driven by adjustments in store operations [19]