Joint development plans with Volkswagen mark a new chapter for Xpeng , Jefferies says. The firm upgraded its rating on Xpeng shares to buy from hold. It also increased its price target on shares to $25.30 from $7.80, which implies 25.1% upside from Thursday’s close. Shares were up an additional 7.6% Friday during premarket trading. Under the deal, the two companies will develop two midsize battery-electric models, which will be branded as Volkswagen cars and be sold in China. Volkswagen also acquired a 4.99% stake in Xpeng and will sit as an observer on the company’s board. The partnership marks “the start of China [original equipment manufacturers] exporting technologies to foreign players [and] will help Xpeng to increase its brand image globally,” analyst Johnson Wan wrote in a Thursday note. Wan added that Xpeng’s sales momentum is on an uptrend and raised his 2023-2024 sales volume forecasts, adding that the company is well-positioned to enjoy its first-mover advantage in assisted driving (AD) development. The company’s navigation on advanced driver assisted systems technologies is approaching an inflection point in commercialization, the analyst noted. “Harvest season for Xpeng’s AD initiatives has just started,” Wan said. Xpeng’s shares have surged more than 103% in 2023. —CNBC’s Michael Bloom contributed to this report.