
Citi Raises Price Targets for Chinese EV Makers, Anticipates Increased Sales
Citi has raised its price targets for two Chinese electric vehicle manufacturers, predicting stronger sales due to robust domestic conditions, despite the broader challenges facing the Chinese economy.
The investment firm increased its price target for Xpeng Inc to $10.30 from $8.90, while maintaining a Neutral rating on the stock. Similarly, Citi elevated its price target for Li Auto Inc to $25.50 from $21.60, also keeping the rating at Neutral.
On Tuesday, Xpeng’s shares on the U.S. market closed at $10.70, and Li Auto’s shares ended the day at $24.72.
Citi anticipates higher sales for both companies, highlighting the upcoming launch of the Xpeng P7 and a strong product pipeline extending into 2025. The brokerage also expects a smaller loss for Xpeng over the next two years.
For Li Auto, Citi forecasts that sales momentum will persist following stronger-than-expected results in July and August, prompting an increase in its sales and profit projections for the company.
The firm noted that both stocks are fairly valued, indicating that the risks and rewards for each are balanced.
Despite facing steep import tariffs from the European Union, the U.S., and Canada earlier this year, Chinese electric vehicle manufacturers have shown resilience. However, since domestic demand constitutes a significant portion of the sector’s sales, the impact of these import duties on overall sales is expected to be limited. Among the three regions, only the European Union has a substantial volume of Chinese EV imports.