Morgan Stanley: WeRide advances L4-to-L2++ strategy with fleet expansion and deliveries
Morgan Stanley said WeRide’s 2Q26 revenue rose 103% year over year to RMB 232 million, supported by higher sales of its L2++ and L3 products and contributions from overseas operations, which accounted for about 40% of revenue.
Morgan Stanley said WeRide’s 2Q26 revenue rose 103% year over year to RMB 232 million, supported by higher sales of its L2++ and L3 products and contributions from overseas operations, which accounted for about 40% of revenue. Gross margin increased by 9 percentage points year over year, while the GAAP net loss narrowed by 1% year over year.
Management maintained its 2026 targets of a 5,000-vehicle L4 fleet, including 2,600 robotaxis, and RMB 1 billion in revenue. It is also targeting 100,000 L2++/L3 deliveries by the end of 2026 and more than 500,000 in 2027.
Domestic robotaxi operating-license issuance has resumed, and the company expects its domestic robotaxi fleet to expand from 1,300 vehicles to 1,600 by year-end. Management is targeting positive quarterly cash flow in 2028, with key thresholds of US$300 million in revenue and a 35% gross margin.
The research note describes WeRide as one of the few full-stack players pursuing both L4 autonomous driving and mass-market L2++ products. It identifies L4 fleet expansion and increased L2++ deliveries as the company’s two potential growth engines. The note says the stock’s valuation remains at an early stage and that substantial valuation-recovery potential could exist if the 2028 quarterly positive-cash-flow target is achieved.
The catalysts identified by Morgan Stanley are progress in expanding the L4 fleet in 3Q26, achievement of the 100,000 L2++/L3 delivery target by year-end, and progress on overseas robotaxi operating licenses.
Management maintained its 2026 targets of a 5,000-vehicle L4 fleet, including 2,600 robotaxis, and RMB 1 billion in revenue. It is also targeting 100,000 L2++/L3 deliveries by the end of 2026 and more than 500,000 in 2027.
Domestic robotaxi operating-license issuance has resumed, and the company expects its domestic robotaxi fleet to expand from 1,300 vehicles to 1,600 by year-end. Management is targeting positive quarterly cash flow in 2028, with key thresholds of US$300 million in revenue and a 35% gross margin.
The research note describes WeRide as one of the few full-stack players pursuing both L4 autonomous driving and mass-market L2++ products. It identifies L4 fleet expansion and increased L2++ deliveries as the company’s two potential growth engines. The note says the stock’s valuation remains at an early stage and that substantial valuation-recovery potential could exist if the 2028 quarterly positive-cash-flow target is achieved.
The catalysts identified by Morgan Stanley are progress in expanding the L4 fleet in 3Q26, achievement of the 100,000 L2++/L3 delivery target by year-end, and progress on overseas robotaxi operating licenses.