The final price of the M03 is probably very competitive, and the energy consumption/vehicle and voice system are superior to the same level.
Xiaopeng will announce the final price of the M03 during the 10th anniversary celebration on August 27 (tonight). We think the final price may be very competitive. The test drive of the M03 began as early as last week and yesterday. Judging from the channel, Xiaopeng is likely to first deliver two versions with a range of 515 km and 620 km. Both versions will be equipped with 360-degree panoramic images and L2+ driver assistance functions (driving assistance functions such as LCC, ACC, and APA). The third MAX version, equipped with an ORiNx chip, has a higher level of intelligent driving capabilities, and delivery may not begin until the end of the year. Earlier, we mentioned in our report that Xiaopeng's pure vision smart driving solution may be launched on the P7+ released in the 4th quarter, and the MAX version may not be delivered until Xiaopeng releases an update to the pure vision smart driving solution. Judging from our test drive, the M03 has an excellent energy consumption of around 11-12KW for 100 kilometers. The level of electricity consumption is excellent. At the same time, the M03 has a better vehicle and voice system than the same level.
By raising sales volume, revenue, and gross margin forecasts, M03 will drive sales growth next year. We raised our 2025-2026 sales forecast by 6-9% to reflect sales growth from M03 and next year's P7+. We believe that the M03 will be sold in 2 stages. The strategy of putting the regular version first and the MAX version later is expected to keep the M03 popular for a long time. We raised our 2025-2026 revenue forecast by 12-23% to reflect adjustments in popular technology revenue and sales forecasts, and raised gross margin for 2024-2026 to reflect factors such as scale effects due to increased sales and cost control in the supply chain. Xiaopeng's performance indicates that 0.02 million vehicles will be delivered in September. Based on current sales estimates for July-August, the M03 is likely to deliver more than 0.01 million vehicles in September. At the same time, we think the price of the entry version is likely to be between 0.12-0.125 million yuan, which is very competitive. In terms of appearance and interior, the M03 provides a variety of stylish and individualistic options, which is expected to attract young people, especially female users.
The rating was raised to buy. Next year, the sales side will improve, and losses will narrow further. We raised Xiaopeng to a buy rating, and the target price was raised to HK$39.29/$10.05 (XPEV US/buy), which corresponds to 1.2 times the 2025 market sales rate. We believe that the MONA series is within 0.2 million yuan. Relying on the advantages of cars and smart driving, it is superior to models in the same class. Next year there will be an SUV model. Furthermore, the pure vision smart driving plan is expected to further reduce the cost of smart driving models in the second half of the year. The sales side is expected to improve next year, and losses will narrow further.