The growing number of models that support high-power charging will drive the adoption of EVs to a critical mass, which could double the speed of China's transition to EVs, Morgan Stanley said.

Xpeng Motors on Monday showed off its next-generation ultra-fast charging technology that takes electric vehicle (EV) charging to a new level, and the move was viewed positively by Morgan Stanley.

In a research note sent to investors Monday titled "High-power charging race has begun in China," Morgan Stanley analyst Tim Hsiao's team argued that high-power charging will be strategically important to the development of EVs.

"Aside from charging accessibility, consumers are generally discouraged about the lengthy energy replenishment times," the team wrote.

"We expect the upgrade to 800V vehicle electrical, brand new electronic (E/E) architecture, and high-power charging (HPC) will further enhance user experience," they added.

Xpeng introduced its ultra-fast charging technology and plans for such stations at a brief launch event on August 15.

The Xpeng G9, built on an 800-volt platform, can get a CLTC range of 210 kilometers in five minutes when using that S4 supercharger, real-world tests shown by the company showed.

With a maximum power of 480 kW, a maximum current of 670 A and a peak charging power of 400 kW, the company's S4 supercharger surpasses Tesla's V3 Supercharger and Porsche's Turbo supercharger, said Xpeng Chairman and CEO He Xiaopeng.

Xpeng has already put its first station with an S4 supercharger into operation and plans to focus on building S4 stations in the 10 cities with the largest G9 order volume this year.

Hsiao's team believes that the growing number of models on the market that support high-power charging will also drive EV adoption to critical mass, which could double the speed of China's transition to electric vehicles.

However, infrastructure could soon become a bottleneck, the team noted.

There are no established high-power charging stations on the market, so automakers will need to build them from scratch, which will take longer to scale, the team said.

In addition, the prevalence of 800 V/480 kWh supercharging will require an upgrade of China's power grid. Meanwhile, the high cost of SiC, a key component of high-power charging architectures, remains a barrier to rapid adoption, according to the team.

Starting with the G9, Xpeng will try to make all models, including the refreshed models, support ultra-fast charging, the company said Monday.

In 2023, Xpeng will offer such supercharging stations in key cities and along core highways. By 2025, Xpeng expects to add 2,000 ultra-fast charging stations.

The team reiterated its Overweight rating and $41 price target for Xpeng, which closed down 2.51 percent to $22.91 on Tuesday in the US The price target implies a 79 percent upside.

Xpeng shows off ultra-fast charging tech that can give vehicles 210 km range in 5 minutes