Core Viewpoint - Bank of America raised the target price for Xpeng Motors to $27, driven by the validation of its "Physical AI" strategy and technology monetization capabilities [2][4]. Group 1: AI Strategy and Developments - Xpeng Motors introduced the "Physical AI" concept, which aims to enable AI to deeply understand, interact with, and change the physical world, supported by the new VLA 2.0 model [7][10]. - The VLA 2.0 model is powered by Xpeng's self-developed Turing AI chip, boasting a computing power of 2,250 TOPS and a 12-fold increase in inference efficiency [8][10]. - Volkswagen has become the first external customer for Xpeng's VLA 2.0 model and has ordered the Turing AI chip, marking a significant step in the commercialization of Xpeng's AI technology [5][10]. Group 2: Future Product Plans - Xpeng plans to launch three Robotaxi models in 2026, equipped with four Turing chips (total computing power of 3,000 TOPS) and the VLA 2.0 model, with Gaode Map as its first global ecosystem partner [12]. - The new generation humanoid robot, IRON, is expected to achieve mass production by the end of 2026, featuring solid-state batteries and applications in commercial scenarios like patrolling [12]. - The flying car brand ARIDGE plans to start mass production and delivery of its "land carrier" flying cars in 2026, with an annual production capacity of 10,000 units [13]. Group 3: Financial Adjustments and Projections - Bank of America adjusted its financial forecasts, increasing the expected non-GAAP net loss for 2025 by 36.7% while lowering profit expectations for 2026 and 2027 by 4.5% and 5.5%, respectively [5][16]. - Despite the target price increase, the bank remains cautious about Xpeng's profitability, projecting that the company may face pressure on gross margins due to product mix changes, leading to an expanded loss in 2025 [15][16]. - The new target price of $27 is based on an average of EV/Sales and DCF valuation methods, reflecting a higher sales growth expectation compared to peers [15].

Core Viewpoint - XPeng Motors has gained further recognition from Wall Street following its AI Day, where it outlined its "Physical AI" vision and advancements in artificial intelligence, including the VLA 2.0 model and various innovative products [1][4]. Financial Outlook - Bank of America reiterated a "Buy" rating for XPeng Motors, raising the target price for its American Depositary Shares (ADS) from $26 to $27 and the Hong Kong stock target price from HKD 101 to HKD 105 [1]. - The report indicates a cautious adjustment to XPeng's short-term financial outlook, increasing the non-GAAP net loss forecast for 2025 by 36.7% and lowering profit expectations for 2026 and 2027 by 4.5% and 5.5%, respectively [4][7]. Product and Technology Developments - The highlight of the AI Day was the announcement that Volkswagen has become the first external customer for XPeng's VLA 2.0 model and has ordered its self-developed Turing AI chip, marking a significant step in the commercialization of XPeng's AI technology [4][5]. - XPeng's VLA 2.0 model is described as the operating system for controlling the "Physical AI" world, with applications across various products including Robotaxis, humanoid robots, and flying cars [5][8]. - The company plans to launch three Robotaxi models in 2026, powered by four Turing chips, and anticipates mass production of its humanoid robot by the end of 2026 [8]. Sales and Profit Projections - The report provides updated sales and profit forecasts for XPeng, with slight increases in unit volume and consolidated sales for 2025, 2026, and 2027, while gross profit expectations have been slightly reduced [9]. - The adjusted profit (loss) from operations for 2025 is expected to worsen, with a projected net loss of RMB 1.667 billion, reflecting a 21.4% increase from previous estimates [9].