According to a research report by JPMorgan Chase, the stock prices of electric vehicle makers such as NIO and XPeng have fallen significantly in the past one and three months.

The declines have been mainly due to the recent rapid slowdown in the market demand for new energy vehicles and concerns about the outlook for 2023; the recent price cut by Tesla shows that market competition has deteriorated; and the global interest rate hike environment means that the discount rate is higher and the valuation multiple is lower than before.

The bank acknowledged that its overweight ratings on NIO and Xpeng had not been reflected this year, so it adjusted its forecast to an achievable level, believing that a positive risk-return would be achieved within a year.

The target price of NIO’s US stocks has been reduced from US$25 to US$14, and the target price of XPeng US stocks has been reduced from US$35 to US$11. The both have been maintained overweight ratings by the bank.