JPMorgan Is Positive on the Beijing Auto Show as a Driver of China Auto Q2 Recovery Trading, with New Energy Vehicles Outperforming Fuel Vehicles
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JPMorgan Is Positive on the Beijing Auto Show as a Driver of China Auto Q2 Recovery Trading, with New Energy Vehicles Outperforming Fuel Vehicles
The report believes the Beijing Auto Show, new electrification and intelligent-driving launches, the oil-price shock, and the rebound in buyer sentiment will drive a Q2 recovery in China autos, with investment focused on NEV leaders and new-model catalysts.
- The Beijing Auto Show will be held from April 24 to May 3, spanning about 380k square meters, and is expected to showcase about 1,300 models, including about 300 world premieres, most of which are likely NEVs.
- The report expects Q2 2026 passenger-vehicle wholesale and retail demand to rise about 25%-30% QoQ, significantly above the usual seasonality of around 5%.
- J.P. Morgan's China auto buy-side sentiment index has risen to around the 75th percentile and has improved for a fifth consecutive week from below the 25th percentile at the end of February.
- The report reiterates a preference for NEVs over fuel vehicles, favoring BYD, NIO, XPeng, Leapmotor and Geely, while remaining cautious on SAIC, Guangzhou Auto, Brilliance China and Li Auto.
Report interpretation
Overview
This report centers on the upcoming Beijing Auto Show and the Q2 recovery trade in the China auto industry. JPMorgan believes that the uncertainty around local subsidies that weighed on demand in Q1 and consumers' wait-and-see behavior ahead of new models are fading, and that with the electrification, fast-charging, battery and intelligent-driving catalysts on display at the Beijing Auto Show, China passenger-vehicle demand in Q2 2026 could rebound meaningfully.
Core views
The core view is that NEVs should still be preferred over fuel vehicles. The report expects key Chinese automakers to deliver strong sales growth in Q2 2026 or 2H26, for example BYD with 60%-70% QoQ growth in Q2 2026, Leapmotor with about 60%, XPeng with about 100% QoQ growth in 2H26, and NIO with about 40% QoQ growth in 2H26. The oil-price shock reinforces consumers' preference for EVs; historically, when oil prices are above US$80/bbl, EVs have tended to outperform fuel vehicles more clearly.
Analysis framework
The report combines event studies, model catalysts, sales forecasts, valuation comparisons and alternative-data sentiment indicators. Event studies are used to review auto-stock performance before, during and after auto shows over the past 20+ years; sales forecasts are used to assess the rebound elasticity in Q2 2026 and 2H26; the buy-side sentiment index tracks consumer purchase interest and brand preference; valuation and model cycles are used to screen potential beneficiaries.
Methodology notes
Uses MSCI China autos as the proxy for auto stocks and studies price performance before, during and after annual auto shows over the past 20+ years.
Historical results are mixed, but buying about one month before the auto show has delivered an average absolute return of about 2%, indicating that the auto-show catalyst is not always effective in one direction and should be judged together with the demand cycle and model cycle in each year.
An AI-driven buy-side sentiment index that tracks Chinese consumers' interest in car purchases and brand selection.
The index has moved into the upper end of the 75th percentile range and has improved for five consecutive weeks from below the 25th percentile at the end of February, supporting the view of a Q2 recovery trade.
Compares the impact of oil prices, demand, model cycles, overseas revenue and valuation on NEV and fuel-vehicle automakers.
The report argues that rising oil prices and technological upgrades are more favorable to NEVs, and recommends avoiding joint-venture state-owned automakers and companies with greater fuel-vehicle exposure.
Asset mapping & comparison
Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).
- BYDOne of the core preferred NEV names
- Strengths
- Ultra-fast charging solutions, the new Blade Battery, overseas sales and Autonomous Day activity provide catalysts.
- Weaknesses
- The report says domestic sales and overseas sales still need to be verified for upside surprise.
- Comparison
- It is more likely to benefit from higher oil prices and the NEV trend than fuel vehicles and joint-venture state-owned automakers.
- Risks
- Domestic NEV market growth, overseas sales constraints, battery capacity and lower-than-expected execution of technology-day initiatives.
- NIOOne of the key preferred names
- Strengths
- Buy-side sentiment remains at a high level around the 75th percentile, and the ONVO L80 SUV could be a key model at the Beijing Auto Show.
- Weaknesses
- Sales growth depends on new-model pricing and delivery execution.
- Comparison
- The report expects NIO sales to grow about 40% QoQ in 2H26, with sentiment stronger than most peers.
- Risks
- Market acceptance of the ONVO L80, the impact of battery subscription fees on purchase decisions, and pricing pressure from competing models.
- XPengOne of the key preferred names
- Strengths
- Two budget-oriented SUVs under the Mona brand are expected to drive about 100% QoQ sales growth in 2H26.
- Weaknesses
- Current buy-side sentiment is around the 50th percentile and has not yet broken out decisively.
- Comparison
- If sentiment recovers after the Beijing Auto Show, its upside could be greater than that of mature brands.
- Risks
- Launch timing for affordable SUVs, execution on exports, price competition and weaker-than-expected order conversion.
- LeapmotorOne of the key preferred names
- Strengths
- The D19 six-seat premium SUV offers EREV and BEV options, with a starting price that may be around Rmb200k-Rmb220k, and could drive sales and profitability.
- Weaknesses
- The report's 2026 sales forecast of 700k units is below management's 1.0mn-unit guidance, reflecting a softer Q1.
- Comparison
- If execution is strong, there appears to be upside risk to estimates.
- Risks
- New-model deliveries, price competition, the credibility of management guidance and profitability.
- GeelyOne of the key preferred names
- Strengths
- The Zeekr 8X SUV and the Galaxy brand's Xingyao 8 luxury sedan provide auto-show catalysts, and the stock has recently been strong.
- Weaknesses
- Buy-side sentiment has recovered from a 25% low in early March to near 50%, but still needs further improvement after the auto show.
- Comparison
- Its valuation is about 10x PER, higher than Great Wall Motor's roughly 8x PER, but sales growth expectations are stronger.
- Risks
- Weaker-than-expected new-model orders, valuation digestion and intensifying competition.
- Great Wall MotorA short-term sentiment beneficiary
- Strengths
- Buy-side sentiment rebounded to the 75th percentile over the past two weeks, and its valuation at about 8x PER is relatively cheap.
- Weaknesses
- The stock rose only 3% over the past month, lagging MSCI China autos' 14% gain.
- Comparison
- It has a lower valuation than Geely, but the report emphasizes more its short-term benefit from sector sentiment.
- Risks
- Sustained momentum for Haval's new SUV, the overall pace of NEV transition and industry price competition.
- Li AutoOne of the names the report is cautious on
- Strengths
- It has rebounded somewhat with seasonality recently.
- Weaknesses
- Buy-side sentiment remains at a low level around the 25th percentile, below peers.
- Comparison
- The report is more cautious on Li Auto than on NIO, XPeng, Leapmotor, BYD and Geely.
- Risks
- Weak brand and product interest, competition from new models and valuation pressure.
- Tesla ChinaA representative foreign brand with improving sentiment
- Strengths
- Affected by the oil-price shock, Chinese buyer interest has risen strongly recently and reached the 75th percentile.
- Weaknesses
- The report does not include it in the core recommended China auto basket.
- Comparison
- It is one of the few major foreign brands showing a notable recent improvement in buyer interest.
- Risks
- Competition from domestic NEVs in China, pricing strategy and the policy environment.
Key data
- Beijing Auto Show dates2026-04-24 to 2026-05-03The annual Beijing Auto Show, which the report says will be the largest auto show in China and globally.
- Beijing Auto Show scaleAbout 380k square metersInformation from organizer CAAM.
- Expected models on displayAbout 1,300 models, including about 300 world premieresThe report expects most of the premieres to be NEVs.
- Q2 2026 passenger-vehicle demand forecastAbout 25%-30% QoQWell above the usual seasonality of about 5%.
- China autos performance over the past monthChina autos overall up 14%, MXCN down 3%Geely rose 46% and NIO rose 32%, leading the gains.
- BYD sales outlook60%-70% QoQ growth in Q2 2026The report also watches for 5%-6% growth in the domestic NEV market and whether overseas sales can exceed 1.5mn units.
- Leapmotor sales outlookAbout 60% QoQ in Q2 2026The D19 six-seat premium SUV could be a catalyst for both sales and earnings.
- XPeng sales outlookAbout 100% QoQ in 2H26Two affordable SUV models under the Mona brand are expected to be launched at the Beijing Auto Show.
- NIO sales outlookAbout 40% QoQ in 2H26The ONVO L80 SUV is viewed as a key model.
- Buy-side sentiment indexAround the 75th percentileImproving for a fifth consecutive week, indicating a recovery in purchase interest.
Impact & implications
If the report's judgment proves right, the short-term trading theme for China autos will shift from pure price competition toward models, technological content and demand recovery, and NEV automakers may continue to see valuation and earnings-expectation recovery. After the Beijing Auto Show, new-model orders, fast-charging and battery technology, intelligent driving, and overseas sales will be key to confirming whether the recovery trade can continue.
Risks
- New-model and technology launches at the Beijing Auto Show fall short of expectations, causing order and sentiment improvements to fade.
- Local-government subsidies or policy details disappoint, weakening the Q2 demand rebound.
- Price competition intensifies again, offsetting the margin improvement from sales growth.
- Oil prices retreat or consumer preferences shift, weakening the advantage of NEVs over fuel vehicles.
- Delivery, exports, capacity or battery supply for key automakers are constrained, leading to downward revisions to sales forecasts.
- Historical auto-show window returns are mixed, so the auto-show catalyst itself does not guarantee sustained stock gains.
What to watch
- New-model launches, order feedback, and media/consumer buzz at the Beijing Auto Show from April 24 to May 3.
- Progress on next-generation batteries, ultra-fast charging and 10%-to-90% state-of-charge within 10 minutes from CATL or other manufacturers.
- Whether intelligent-driving demonstrations such as L4 autonomous driving, embodied intelligence and humanoid robots translate into differentiated selling points for automakers.
- Whether BYD domestic sales can match growth in the NEV market and whether overseas sales can exceed 1.5mn units.
- Pricing, orders and delivery pace for NIO's ONVO L80, XPeng's Mona SUV, Leapmotor's D19, Geely's Zeekr 8X and Galaxy Xingyao 8.
- Whether the China auto buy-side sentiment index stays elevated after the auto show or spreads further to more brands.