Shares of Xpeng, Tesla's Chinese rival, jumped more than 6% Tuesday after JP Morgan analysts initiated their coverage of the stock at the equivalent of buy with a price target of $27.
"We expect Xpeng ... to benefit from and lead China's multi-year smart-EV trend, where we forecast penetration tripling from less than 5% in 2019 toward 13% or higher by 2025," analysts led by Nick Lai said in a note Tuesday.
Lai said he expects Xpeng's revenue to grow at a "robust" compound annual growth rate of 73% through 2025.
The company offers two sedans and two SUVs "at competitive prices" that "can capture a sizable and fast-growing addressable market," Lai said.
Xpeng shares went up by 6.39 percent to trade at $19.31 as of market close on Tuesday.
Xpeng was listed on the New York Stock Exchange on August 27 under the symbol "XPEV".
Unlike NIO and Li Auto, which aims for the mid-to-high-end market, Xpeng's earliest compact SUV, the G3, is a low- to mid-range utility model with a 2020 price range of 146,800 yuan to 199,800 yuan (before subsidies), less than half the price of the NIO ES6 and EC6 (360,000-520,000 yuan).
NIO was the first to tap the US capital markets, with its initial public offering in September 2018. Li Auto went public on the NASDAQ on July 30 of this year.
Xpeng lagged slightly in the first half but has a chance to gain market share in the second half with its differentiated sedan model, the P7.