Goldman Sachs China Automobiles: 1Q26 ADR Preview on Diverging Trends
Summaries are public. PDF access requires an active membership; all members have the same access. Sign in
Goldman Sachs previews 1Q26 results for four covered China automobile ADRs, highlighting that diverging new model cycles are driving significantly different volume, average selling price, and gross margin trends. XPeng saw volumes decline 33% year-on-year to 63,000 units due to a lack of new model launches and fading MONA M03 base effects. However, ASP rose 7% to RMB 163,000 as the lower-priced MONA mix decreased, lifting vehicle gross margin by 1.3 percentage points to 11.7%. Li Auto posted modest 2% volume growth to 95,000 units supported by the i6 ramp, but ASP fell 13% to RMB 231,000 and rising raw material costs drove a 12.8 percentage point gross margin contraction to 7.0%. NIO delivered 83,000 units, up 98% year-on-year, driven by the refreshed ES8 launched in September 2025. ASP increased 14% to RMB 268,000 and vehicle gross margin improved 8.0 percentage points to 18.2% on a richer ES8 mix. Hesai's volume surged 118% to 426,000 units on rapid LiDAR penetration, though ASP dropped 41% to RMB 15,000 and gross margin fell 2.2 percentage points to 39.5% due to annual price reductions. Goldman Sachs maintains Buy ratings on XPeng and Hesai, and Neutral ratings on Li Auto and NIO, with target prices unchanged. Key upcoming catalysts include XPeng's GX launch in 2Q26 and two MONA SUVs in 2H26.