May 20, 2024

Electric vehicle maker Li Auto will release earnings on Monday. 

LI-–-Daily-ChartLI – Daily Chart 

Li shares attempted a breakout in 2024 but have fallen back with a potential test of the support at $22.50. 

Shares of Li Auto have been under recent pressure after a string of weaker-than-expected updates. Deliveries have disappointed in recent months. The company has also moved to cut prices across its range, following other EV rivals in China. 

However, there are some positives for the company, with optimism surrounding the launch of Li Auto’s Li L6 model. Li Auto focuses on electric vehicles’ premium and luxury segment, integrating the latest technology and autonomous driving systems. 

For Q1, deliveries were 80,400, up 52.9% year over year. However, that was still lower than the company’s original guidance, which was closer to 100k vehicles. 

The company blamed “lower-than-expected order intake” for its first all-battery electric vehicle (BEV) MEGA model. There was further disappointment in Q2, with the company reporting 25,787 deliveries in April, up 0.4% from a year ago and down 12% from 28,984 in March.

Li Auto CEO Li Xiang has admitted that expectations for the BEV opportunity were too high, and the company is now focused on sustainable growth. That strategy has included a 5% price cut due to an ongoing industry “price war”. Companies like Tesla and BYD Auto have all announced pricing adjustments in China due to a supply glut and growing competition. 

Li Auto is still coming off a record year with deliveries of 376k vehicles in 2023, up 182% from 2022. The initial rollout of the MEGA model may have disappointed analysts. However, the company is still seeing success with other models, including the L7, L8, and L9, which are the best-selling EREVs in China. 

The company’s 2023 revenue was RMB 123.9 billion ($17.4 billion), increasing by 173% yearly and boosted by an integrated business model with more than 400 retail stores and 360 service centres.

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