After XPeng (XPEV) announced that it is recalling 47,490 P7+ vehicles, Morgan Stanley notes that other models are not using the steering systems from the same supplier, so there’s no major impact on seasonal uptick and EREV launches. The firm, which expects “a manageable impact” on XPeng’s target of a steady GPM in Q3 and net profit breakeven in Q4, argues that “the best way out is always through” and tends to think a timely reaction and recall “can make them more of a hiccup than a disruption.” The firm has an Overweight rating and $28 price target on XPeng shares.
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