Core Insights - Xiaopeng Motors is set to launch VLA 2.0 in March, significantly enhancing its intelligent driving capabilities with advanced hardware and software integration [1] - The year 2026 is projected to be a pivotal year for Xiaopeng Motors, marking the introduction of Robotaxi services and the launch of multiple new models [2] - The company is expected to see substantial growth in overseas sales, with a focus on expanding into European, Southeast Asian, Middle Eastern, and Latin American markets [3] - 2026 will also witness the mass production of advanced humanoid robots, aimed at commercial applications [4] - Investment recommendations highlight strong product cycles, overseas expansion, and emerging business opportunities in robotics and Robotaxi services [5] Group 1: VLA 2.0 and Intelligent Driving - Xiaopeng Motors will begin rolling out VLA 2.0 in March, featuring 2250 TOPS of in-car computing power and a cloud computing cluster with 30,000 cards [1] - The first batch of vehicles to receive the update includes the 2025 models of P7, G7, and X9, with subsequent models to follow [1] Group 2: Robotaxi and New Models - The company plans to launch three Robotaxi models in 2026, equipped with four Turing chips and a pure vision autonomous driving system [2] - Xiaopeng's first large six-seater SUV, the GX, has begun L4 autonomous driving tests on public roads [2] Group 3: Overseas Expansion - In 2025, Xiaopeng delivered 45,000 vehicles overseas, marking a 96% year-on-year growth, with expectations for continued strong growth in 2026 [3] - The company will introduce three new models in overseas markets, including P7+ and Mona SUVs, while focusing on local production partnerships in Europe, Indonesia, and Malaysia [3] Group 4: Robotics and Future Innovations - Xiaopeng showcased its latest generation Iron robot, with plans for mass production by the end of 2026, targeting commercial service applications [4] Group 5: Investment Outlook - The company anticipates total vehicle sales of approximately 430,000, 570,000, and 840,000 units from 2025 to 2027, with total revenues projected at 75.2 billion, 103.1 billion, and 145.5 billion RMB respectively [5] - The valuation for the partnership with Volkswagen is estimated at 30.3 billion HKD, while the main business is valued at 169.9 billion HKD, leading to a total valuation of 200.2 billion HKD [5]

Investment Rating - The report maintains a "Buy" rating for the company [8] Core Insights - The company is expected to launch VLA 2.0 in March 2026, significantly enhancing its autonomous driving capabilities with advanced hardware and software integration [1] - 2026 is projected to be the year of Robotaxi commercialization, with three models expected to be launched, featuring L4 autonomous driving capabilities [2] - The company anticipates strong growth in overseas markets, with a projected delivery of 45,000 units in 2025, representing a 96% year-on-year increase, and expects overseas revenue to exceed 20% in 2026 [3] - 2026 will also mark the mass production of advanced humanoid robots, aimed at commercial applications [4] - The investment recommendation highlights the company's strong product cycle, overseas expansion, advancements in autonomous driving, and emerging business opportunities in robotics and Robotaxi [5] Financial Projections - The company forecasts total vehicle sales of approximately 430,000 units in 2025, increasing to 566,000 units in 2026, and 836,000 units in 2027 [15] - Revenue is projected to reach 75.2 billion RMB in 2025, 103.1 billion RMB in 2026, and 145.5 billion RMB in 2027, with a significant increase in gross profit margins [15] - The non-GAAP net profit margin is expected to improve from -1.2% in 2025 to 2.3% in 2026 and 3.2% in 2027 [7][15] - The company anticipates a total revenue of 100.1 billion RMB from its core business in 2026, with an estimated profit contribution of 2.7 billion RMB from its collaboration with Volkswagen [5] Market Strategy - The company plans to introduce three new models in overseas markets in 2026, focusing on Europe, Southeast Asia, the Middle East, and Latin America [3] - The production strategy includes partnerships with local firms in Europe and Southeast Asia to better meet local demand [3] - The introduction of the Mona SUV series is expected to enhance the company's market presence in the competitive pricing segment while maintaining advanced intelligent driving capabilities [3]

Investment Rating - The report maintains a "Buy" rating for the company [8] Core Insights - The company is set to launch VLA 2.0 in March 2026, significantly enhancing its autonomous driving capabilities with advanced hardware and software integration [1] - 2026 is anticipated to be the year of Robotaxi for the company, with plans to introduce three Robotaxi models equipped with advanced autonomous driving systems [2] - The company is expected to see rapid growth in overseas sales, projecting a delivery volume of 45,000 units in 2025, a 96% year-on-year increase, with expectations to exceed 20% of total revenue from international markets by 2026 [3] - The company plans to mass-produce advanced humanoid robots by the end of 2026, aiming to integrate them into commercial scenarios [4] - The investment recommendation highlights strong product cycles, overseas expansion, advancements in autonomous driving, and emerging business opportunities in robotics and Robotaxi [5] Financial Projections - The company forecasts total vehicle sales of approximately 430,000 units in 2025, increasing to 566,000 units in 2026, and 836,000 units in 2027 [15] - Revenue is projected to reach 75.2 billion RMB in 2025, 103.1 billion RMB in 2026, and 145.5 billion RMB in 2027, with a significant increase in gross profit margins [7][15] - The non-GAAP net profit margin is expected to improve from -1.2% in 2025 to 2.3% in 2026 and 3.2% in 2027 [5][15] - The company anticipates a main business revenue of 100.1 billion RMB in 2026, with a profit contribution from partnerships expected to be around 2.7 billion RMB [5] Market Strategy - The company plans to launch three new models in overseas markets in 2026, focusing on Europe, Southeast Asia, the Middle East, and Latin America [3] - The introduction of the Mona SUV series is expected to cater to the mass market while providing advanced intelligent driving capabilities [3]

Investment Highlights - The smart car index decreased by 2.0%, while the index excluding Tesla fell by 6.9%. As of January 8, 2026, the smart car index PS (TTM) is at 14.0x, ranking in the 96th percentile since the beginning of 2023. The index excluding Tesla has a PS (TTM) of 7.2x, ranking in the 97th percentile since the beginning of 2023. The top five gainers in the smart car index include Hezhima Intelligent, Siwei Map, Zhejiang Shibao-H, Qianli Technology, and Hesai [4][10][16]. Industry Core Changes - NVIDIA's CEO Jensen Huang announced the open-source autonomous driving model Alpamayo at CES 2026, accelerating the layout of Robotaxi [5][21]. - The U.S. plans to hold a hearing on January 13, 2026, to discuss new automotive legislation, increasing the annual deployment cap for vehicles without traditional controls from 2,500 to 90,000 [5][21]. - XPeng announced the launch of its second-generation VLA and Robotaxi at its global product launch event, with mass production expected in the first half of 2026 [5][21]. Current Investment Recommendations - The industry maintains a strong outlook for the 2026 L4 RoboX mainline, favoring B-end software stocks over C-end hardware stocks. Preferred H-shares include XPeng Motors, Horizon Robotics, WeRide, and Cao Cao/Hezhima Intelligent; preferred A-shares include Qianli Technology, Desay SV, and Jingwei Hengrun [6][10]. - Downstream application-related stocks from the Robotaxi perspective include: 1. Integrated model: Tesla/XPeng Motors 2. Technology providers + operational sharing model: Horizon/Baidu/WeRide/Qianli Technology, etc. 3. Transformation of ride-hailing/taxi services: Didi/Cao Cao Mobility/Ruqi Mobility/Volkswagen Transportation/Jinjiang Online [6][10]. - Upstream supply chain-related stocks include: 1. B-end unmanned vehicle OEMs: BAIC Blue Valley/Guangzhou Automobile Group/Jiangling Motors/Tongli Co./Yika Intelligent (planned IPO) 2. Core upstream suppliers: Testing services (China Automotive Research/China Automotive Corporation), chips (Horizon Robotics/Hezhima Intelligent), domain controllers (Desay SV/Jingwei Hengrun/Junsheng Electronics/Huayang Group/Keboda), sensors (Sunyu Optical Technology/Hesai/Suteng Juchuang), steer-by-wire chassis (Bertley/Nexteer/Zhejiang Shibao), lights (Xingyu Co.) [6][10].

Investment Rating - The industry investment rating is "Overweight," indicating an expected outperformance of the industry index relative to the benchmark by more than 5% over the next six months [22]. Core Insights - The smart car index decreased by 2.0% this week, while the index excluding Tesla fell by 6.9%. As of January 8, 2026, the smart car index PS (TTM) is at 14.0x, placing it in the 96th percentile since the beginning of 2023. The index excluding Tesla has a PS (TTM) of 7.2x, in the 97th percentile since early 2023 [2][11]. - Key developments in the industry include NVIDIA's announcement of the open-source autonomous driving model Alpamayo at CES 2026, and a proposed increase in the annual deployment cap for vehicles without traditional controls from 2,500 to 90,000 in the U.S. [2][16]. - The report maintains a positive outlook for the L4 RoboX segment in 2026, favoring B-end software companies over C-end hardware companies [2]. Summary by Sections Industry Performance Review - The smart car index has shown a decline of 2.0%, while the index excluding Tesla has decreased by 6.9% [2][11]. - The top five gainers in the smart car index include Black Sesame Intelligence, Four-dimensional Map, Zhejiang Shibao-H, Qianli Technology, and Hesai [2]. Key Changes in the Industry - NVIDIA's CEO Jensen Huang introduced the open-source autonomous driving model Alpamayo, marking a shift towards an "end-to-end" approach in autonomous driving technology [16]. - A U.S. hearing on new automotive legislation is scheduled for January 13, 2026, which may significantly impact the regulatory environment for autonomous vehicles [16]. Investment Recommendations - The report suggests focusing on B-end software stocks such as XPeng Motors, Horizon Robotics, Pony.ai, and others, while also highlighting key players in the downstream application and supply chain sectors [2][16]. - Specific recommended stocks include Qianli Technology, Desay SV, and Jingwei Hirain in the A-share market, and XPeng Motors and Horizon Robotics in the H-share market [2].

Core Viewpoint - The CEO of XPeng Motors, He Xiaopeng, believes that fully autonomous vehicles will become as ubiquitous as the iPhone within the next three years, rendering previous smart devices obsolete [1][3]. Group 1: Autonomous Driving Levels - He Xiaopeng stated that by 2026, next-generation fully autonomous driving will emerge in China and the U.S., skipping the L3 stage and moving directly from L2 to L4 [2][5]. - The current advancements in Tesla's Full Self-Driving (FSD) version 14.2 indicate that L4 autonomous driving is "within reach" [3]. - The distinction between L2 and fully autonomous driving is based on four key differences: capability, scenarios, safety, and efficiency [3]. Group 2: XPeng's Technological Progress - XPeng's VLA (Vehicle Learning Architecture) is undergoing rapid self-evolution, with advancements perceived to be occurring at an accelerated pace [4]. - The upcoming release of XPeng's VLA 2.0 is anticipated to enhance its autonomous driving capabilities [4]. - XPeng aims to compete with Tesla's full version of the system in the European market by the end of 2026 [5]. Group 3: Industry Perspectives - Companies like Tesla, XPeng, and Horizon believe that AI large model technology can directly facilitate the transition from L2 to L4 autonomous driving [5]. - Other companies prefer a gradual approach, using L3 as a transitional stage before reaching L4 [6].

Core Viewpoint - Xiaopeng Motors is set to release its VLA 2.0 (Vision-Language-Action) model in the next quarter, with significant pressure on its first version [1] - A bet was placed by Xiaopeng's chairman with the autonomous driving team, aiming to match Tesla's FSD V14.2 performance by August 30, 2026, or face a challenge [1] Group 1: VLA Model and Industry Perspectives - The VLA model is seen as an advanced end-to-end solution, integrating visual perception (V), action execution (A), and a language model (L) to enhance decision-making and environmental understanding [5][11] - The industry has shifted from relying on LiDAR and high-precision maps to adopting AI-driven models like VLA, with a notable divergence in development paths emerging by 2025 [4][11] - Li Auto's VP emphasized the importance of real-world data over model architecture, asserting that VLA is the best solution due to their extensive data collection from millions of vehicles [6][8] Group 2: Diverging Technical Approaches - Huawei's approach focuses on the World Action (WA) model, which bypasses the language processing step, aiming for direct control through visual inputs [8][10] - The World Model concept allows AI systems to simulate the physical world, enhancing predictive capabilities and decision-making in autonomous driving [9][11] - Companies like NIO and SenseTime are also exploring the World Model approach, indicating a broader industry trend [10] Group 3: Future Integration and Evolution - There is a growing trend towards integrating VLA and World Models, with both technologies not being mutually exclusive but rather complementary [11][12] - Xiaopeng's second-generation VLA model aims to combine VLA and World Model functionalities, enhancing data training and decision-making processes [14][15] - The automotive industry anticipates further iterations in autonomous driving technology architecture over the next few years, potentially stabilizing by 2028 [15]

Core Viewpoint - Xiaopeng Motors is set to release its VLA 2.0 (Vision-Language-Action) model in the next quarter, with significant pressure on its development as it is the first version [1] Group 1: VLA Model Development - Xiaopeng's chairman, He Xiaopeng, has made a special bet with the autonomous driving team, promising to establish a Chinese-style cafeteria in Silicon Valley if the VLA system matches Tesla's FSD V14.2 performance by August 30, 2026 [3] - The VLA model is seen as an advanced end-to-end solution, integrating visual perception, action execution, and language processing to enhance decision-making capabilities [7][12] - The VLA model aims to overcome traditional model limitations by incorporating a reasoning chain through language models, enhancing its adaptability to complex driving environments [7][12] Group 2: Industry Perspectives - There is a divergence in the industry regarding the development paths of VLA and world models, with companies like Li Auto and Xiaopeng favoring the VLA approach [6][12] - Li Auto's VP, Lang Xianpeng, emphasizes the importance of real-world data in developing effective autonomous driving systems, arguing that the VLA model is superior due to its data-driven approach [8][9] - Huawei and other companies are pursuing a world model approach, which focuses on direct control through visual inputs without the intermediary language processing [9][10][11] Group 3: Future Integration and Trends - Despite differing opinions, VLA and world models are not mutually exclusive and may increasingly integrate as both technologies evolve [12][17] - The future of autonomous driving technology is expected to see further iterations and stabilization by 2028, with a potential convergence of VLA and world model methodologies [17]

Core Viewpoint - The company has shown significant growth in vehicle deliveries and revenue, with a strong focus on technological collaboration and product innovation, while also facing challenges in profitability and cost management [1][2][3]. Group 1: Financial Performance - In Q3, the company delivered 116,000 vehicles, a year-on-year increase of 149%, leading to a revenue growth of 102% to 20.38 billion yuan [1]. - The automotive sales revenue and service revenue were 18.1 billion yuan and 2.3 billion yuan, respectively, reflecting year-on-year growth of 105% and 78% [1]. - The overall gross margin for Q3 was 20.1%, an increase of 4.9 percentage points year-on-year and 2.8 percentage points quarter-on-quarter [1]. - The net loss attributable to the parent company in Q3 was 380 million yuan, significantly narrowing compared to previous periods [1]. Group 2: Future Outlook - For Q4, the company expects vehicle sales between 125,000 and 132,000 units, representing a year-on-year growth of 36.6% to 44.3%, with total revenue projected between 21.5 billion and 23 billion yuan [2]. - The company anticipates maintaining a gross margin of around 20% in Q4 [2]. Group 3: Product and Market Development - The company plans to launch the X9 super range extender version on November 20, with three additional super range extender models set for Q1 2026 [3]. - The company is focusing on enhancing brand strength and emotional value through improved design and technology, with key design personnel joining from prestigious automotive brands [3]. - In the overseas market, the company delivered 29,706 vehicles in the first three quarters, with September sales surpassing 5,000 units, a year-on-year increase of 79% [4]. Group 4: Technological Advancements - The company announced the latest generation of its intelligent driving model, VLA 2.0, which has been trained on nearly 100 million clips, equating to extreme driving scenarios [5]. - The upcoming "Xiaolu NGP" feature is expected to significantly enhance intelligent driving performance in complex environments [5]. - The company plans to introduce three Robotaxi models in 2026, aiming for trial operations in the domestic market [6].

Summary of XPeng's AI Workshop and Equity Research Company Overview - **Company**: XPeng Inc. - **Industry**: Electric Vehicles (EV) and Robotics - **Founded**: 2015 - **Market Cap**: $39.0 billion - **Ticker**: XPEV (US), 9868 HK (Hong Kong) Key Highlights from AI Workshop 1. Robotaxi Development - XPeng is planning the operational rollout of its robotaxi service, focusing on city selection, site layout, and license applications - Target for mass production and commercial deployment is set for the second half of 2026 - The company is addressing specific challenges to bridge the gap between Level 4 (L4) and Level 2 (L2) autonomy, including passenger pickup and emergency fallback [2][2][2] 2. VLA 2.0 Technology - VLA 2.0 aims to simplify traditional language model approaches by avoiding manual data labeling, enhancing scalability - The model can adapt to new regions using local driving data without needing region-specific labeled datasets, improving localization efficiency [4][4][4] 3. Humanoid Robots - XPeng is developing full-sized humanoid robots designed to integrate into human environments, emphasizing a shift from hardware-driven to software-driven innovation - The humanoid robots utilize a unique waist design mimicking the human spine, enhancing posture and movement [6][6][6] - The robots share foundational hardware with XPeng's EVs, allowing for deep cross-domain integration and scalability [6][6][6] Financial Insights 1. Equity Research Rating - **Rating**: Buy - **Current Price**: $22.42 (US), HK$90.90 (Hong Kong) - **Price Target**: $29.90 (US) +33%, HK$116.90 (Hong Kong) +29% [5][5][5] 2. Price Target Methodology - Price targets are based on a price-to-earnings (P/E) ratio of 25x FY27E earnings - Risks include intensifying competition in China's New Energy Vehicle (NEV) market and potential setbacks in autonomous driving development [9][10][10] Additional Considerations - XPeng's humanoid robots could create significant demand in corporate settings, with potential deployment in over 20,000 Starbucks locations in China, indicating scalability across industries [6][6][6] - The company is actively exploring low-cost data acquisition methods to support continuous learning and iteration for its robotics technology [6][6][6] Conclusion XPeng is positioning itself as a leader in the EV and robotics sectors with innovative technology and strategic planning for future developments. The company's focus on scalability, integration, and adaptability presents significant investment opportunities, albeit with inherent risks in a competitive market.