XPeng Inc.'s "Physical AI" blueprint unveiled at its AI Day has garnered further recognition from Wall Street.

Bank of America (BofA) reiterated its "Buy" rating on XPeng on November 6, raising its target price for the company's American Depositary Shares (ADS) from $26 to $27. The Hong Kong-listed stock target was also lifted from HK$101 to HK$105.

The upgrade follows XPeng's 2025 AI Day event on November 5, where the automaker showcased its latest advancements in artificial intelligence, including the VLA 2.0 large model, Robotaxi, humanoid robots, and flying cars.

A key highlight was Volkswagen's endorsement—the report revealed that Volkswagen has become the first external customer for XPeng's VLA 2.0 model and placed orders for its self-developed Turing AI chips. BofA views this partnership as critical validation of XPeng's ability to monetize its advanced driver-assistance systems (ADAS) technology.

However, the long-term optimism comes with near-term financial adjustments. BofA widened its 2025 non-GAAP net loss forecast for XPeng by 36.7%, citing product mix changes, while trimming 2026–2027 net profit estimates by 4.5% and 5.5%, respectively.

**"Physical AI": Volkswagen as First External Client** The AI Day centered on XPeng's "Physical AI" concept—enabling AI to understand, interact with, and transform the physical world. Powered by the Turing AI chip (2,250 TOPS computing power), the VLA 2.0 model was described as the "operating system for Physical AI." Trained on Alibaba Cloud’s 30,000-card computing cluster with 72 billion parameters, it supports applications across vehicles, Robotaxis, robots, and flying cars.

**Roadmap: Robotaxi, Robots & Flying Cars by 2026** - **Robotaxi**: Three models launching in 2026, equipped with four Turing chips (3,000 TOPS total) and VLA 2.0. Amap is confirmed as its first global ecosystem partner. - **Humanoid Robot (IRON)**: Mass production expected by late 2026, featuring solid-state batteries for commercial use cases like patrolling. Baosteel will deploy IRON for inspections. - **Flying Car (ARIDGE)**: The consumer-targeted "Land Aircraft Carrier" begins production and deliveries in 2026, with an annual capacity of 10,000 units.

**Valuation Rationale** BofA’s $27 target blends EV/Sales and DCF methodologies. Despite reducing its target EV/Sales multiple from 1.8x to 1.5x, the adjustment to a 2026 sales base lifted the fair value. Analysts argue XPeng’s higher growth expectations and new ventures justify premium multiples.

While maintaining profitability forecasts for Q4 2025, BofA cautioned about near-term margin pressures from product mix shifts.