Charged: XPeng among Morgan Stanley’s preferred China auto stocks

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From the hotly-debated high-flier Tesla (TSLA), Wall Street’s newest darling Rivian (RIVN), traditional-stalwarts turned EV-upstarts GM (GM) and Ford (F) to the numerous SPAC-deal makers that have come public in this red-hot space, The Fly has you covered with “Charged,” a weekly recap of the top stories and expert calls in the sector.

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PREFERRED CHINA AUTO STOCKS: Morgan Stanley believes China’s auto industry will face cyclical and policy challenges in 2026, but argues that these “could prove territorially and technologically beneficial.” In that context, the firm names XPeng (XPEV), Geely (GELYF) and SAIC as the firm’s preferred China Auto stocks in the first half of 2026, citing their resilient domestic and growing overseas sales as well as re-rating opportunities from a non-auto “second act.”

PROBE: Tesla Model 3 is under a defect investigation by the U.S. auto safety regulator NHTSA amid concerns that the vehicle’s emergency door release controls may not be easily accessible or clearly identifiable in an emergency, Reuters reports. The probe covers about 179K model year 2022 vehicles, the report states.

SERVICE RESUMED: Alphabet’s (GOOGL) Waymo has resumed its robotaxi service in San Francisco after suspending it during a blackout, and says most trips finished before vehicles returned to depots or pulled over, CNBC’s Lora Kolodny and Mike Winters report. The power outage was “a widespread event that caused gridlock across San Francisco, with non-functioning traffic signals and transit disruptions,” a Waymo spokesperson told CNBC in an e-mailed statement. “While the failure of the utility infrastructure was significant, we are committed to ensuring our technology adjusts to traffic flow during such events,” the spokesperson said. Meanwhile, Elon Musk said via X, formerly Twitter, that Tesla’s robotaxis were “unaffected” by the power outage.