Goldman Sachs, CLSA and J.P. Morgan cut their XPeng targets

Three brokers lowered their targets for XPeng's shares between 23 and 26 October, each keeping its rating. Goldman Sachs went to US$16 and HK$61 and CLSA to HK$44, both for reasons that apply across China's carmakers: weaker demand at home and new costs. J.P. Morgan went to US$10 and published no reason. XPeng's third-quarter deliveries were a record; Goldman expects its gross margin for the quarter at 18.8%, against 20.7% in the second.

The three notes

Broker	Date	Target	Before
Goldman Sachs	23 Oct	US$16	US$18
Goldman Sachs	23 Oct	HK$61	HK$69
CLSA	23 Oct	HK$44	HK$80
J.P. Morgan	26 Oct	US$10	US$11.50

Each firm kept its rating: Buy at Goldman Sachs, Outperform at CLSA, Neutral at J.P. Morgan. US$ targets are for the New York shares (XPEV), HK$ targets for the Hong Kong shares (9868); one New York share equals two Hong Kong shares. Every tracked note is on Analysts.

On 23 October, the day of the first two notes and the last New York session before the third, XPEV closed at US$9.21 and 9868 at HK$37.12. Against those closes, Goldman's targets are 74% and 64% higher, CLSA's 19% and J.P. Morgan's 9% (XPulse calculation). J.P. Morgan's US$10 is the lowest New York target among the notes XPulse has tracked since the second-quarter results.

Why they cut

Goldman's note previews the third quarter for the Chinese carmakers it covers. It says weaker demand at home is holding back their sales: by its count, China's retail sales of new-energy cars fell 16% on a year earlier in September, after falls of 3% in July and 10% in August. It points to higher costs as well: the battery consumption tax in force since 1 September and the lower export tax rebate from 1 April 2027.

Goldman cut its earnings forecasts and its targets for the group by 7% to 12%. It also changed its model of the industry towards weaker sales at home and stronger exports: it now expects China's passenger-car retail sales to fall 20% in 2026 and exports to rise 70%. For XPeng it expects a third-quarter gross margin of 18.8%.

CLSA's cut came in a review of the whole sector, in which it raised its view of China's car industry to Neutral and lowered its targets for NIO, Li Auto, BYD and Geely as well. Its reported reasons apply across the industry: lower export rebates could reduce exporters' 2027 profits by a mid-to-high single-digit percentage, which a better product mix and pricing may offset, and it expects China's domestic car sales to fall in 2026.

J.P. Morgan's note, as published, gives the new target and the Neutral rating but no reason. It follows the bank's downgrade on 29 September, when it said demand in China would stay weak through the second half of 2026 and higher input costs would last into 2027.

What XPeng's record shows

The quarter's volume is already known. XPeng delivered 118,390 cars in the third quarter, a record, inside the 115,000 to 121,000 it guided in August and 2% more than a year earlier. Its exports, cars and kits, were 59,479 in the first nine months, twice as many as a year earlier.

The margin is what the results will add; XPeng gives no guidance for it. Its gross margin was 20.1% in the third quarter of 2025, then 21.3%, 20.6% and 20.7% in the three quarters since. Goldman's 18.8% would be the lowest since the second quarter of 2025, when it was 17.3%. XPeng reports the third quarter in November, with its guidance for the fourth.