HSBC: Xiaopeng Motors is expected to achieve a balance between profit and loss in the fourth quarter, thanks to strong sales.

HSBC analyst report stated that supported by strong monthly sales, Xiaopeng Motors is expected to achieve a breakeven in the fourth quarter. They also emphasized the physical AI strategy of the automaker covering autonomous driving, self-driving rental cars, and humanoid robots. "Although monetization is still a long way off, we believe Xiaopeng Motors' physical AI capabilities will gradually be revealed, unlocking more growth potential with the achievement of key milestones," they added. However, these analysts have lowered their profit forecast for 2025 by 19%, mainly due to slower-than-expected production ramp-up of the G7 SUV model leading to slightly weaker sales prospects, and higher costs from upcoming new model launches. However, profit forecasts for 2026-2027 remain largely unchanged. HSBC maintains a buy rating on Xiaopeng Motors but has lowered its target price from $29.60 to $28.60.