Shares in the Chinese electric-vehicle manufacturer XPeng experienced a decline on Friday following a downgrade by a prominent brokerage. At present, the shares are 5.7% lower at 54.30 Hong Kong dollars (US$6.94).
Bocom International’s downgrade from neutral to sell has dampened investor sentiment. According to the brokerage, market expectations for XPeng’s new G6 model may be overly optimistic. They raised doubts about whether the EV model can achieve the company’s and the market’s anticipated sales of 10,000 units per month.
In a note released on Thursday, analysts from Bocom International stated, “We believe the G6 is likely to come close to this level during sales and production ramp-up, but steady-state monthly sales are expected to reach only 5,000-6,000 units. This is primarily due to intense competition and the possibility of price cuts from competitors.”
Moreover, the brokerage highlighted additional concerns surrounding XPeng, including its elevated valuations and the ongoing pressure on its margins.
It remains to be seen how this downgrade will impact XPeng in the long run.