Li Auto (NASDAQ:LI), the most important of the rising EV gamers in China, delivered 58,513 autos for December 2024, a rise of 16.2% year-over-year. Gross sales have been additionally up by roughly 20% from November. Deliveries for the total yr stood at just a little over half one million autos, which is a brand new milestone for the corporate. Nonetheless, Li’s progress price was additionally behind each of its principal rivals. Nio stock (NYSE:NIO) reported deliveries of 31,138 autos, up 73% in comparison with final yr, whereas Xpeng (NYSE:XPEV) bought 36,695 autos, up a strong 82% year-over-year.
Though Li Auto doesn’t break down the important thing drivers of its progress, it’s fairly doubtless that the Li L6, probably the most reasonably priced mannequin within the firm’s lineup, has helped its volumes. The automobile, which was launched in April, is priced at about RMB 250,000 (about $34,500). Individually, Li has additionally been making developments to its autonomous driving system and that is additionally serving to drive automobile gross sales greater. The corporate mentioned that it might provide an over-the-air replace to its self-driving system in January to combine each metropolis and freeway autopilot capabilities. Furthermore, the value wars between main EV gamers Tesla and BYD have additionally prompted different gamers to supply higher reductions. For instance, Li Auto introduced a brand new promotion towards the tip of November providing prospects a three-year, zero p.c curiosity financing incentive on their buy of any Li Auto automobile via the tip of 2024.
Whereas Li Auto inventory has seen lackluster progress over latest years, the Trefis Excessive High quality (HQ) Portfolio, with a group of 30 shares, has offered higher returns with much less danger versus the benchmark S&P 500 index during the last 4 yr interval; much less of a roller-coaster experience as evident in HQ Portfolio efficiency metrics. So what’s subsequent for Li Auto inventory?
Li inventory trades at about $24 per share, about 1.2x consensus 2024 revenues. This isn’t costly, contemplating that revenues are on observe to develop by about 18% in 2024 and by about 33% in 2025, per consensus estimates. Compared, EV bellwether Tesla trades at about 13x the estimated 2024 income, regardless of the very fact the revenues are more likely to stay virtually flat. That mentioned, Li does face some headwinds. Intense competitors within the Chinese language EV market is pressuring its common promoting costs and margins, with over 100 manufacturers vying for market share. The corporate can be experiencing a shift in its gross sales combine, with fewer premium fashions (Li L7, Li L8, and Li L9) and extra gross sales of the lower-priced L6, contributing to a decline in common promoting costs. Moreover, Li’s first purely electrical mannequin, the MEGA van, which comes with out the gasoline vary extender present in Li’s different autos, hasn’t fairly lived as much as expectations. Li Auto had initially deliberate to launch extra purely eclectic fashions in 2024, however it has deferred these plans to 2025. See our evaluation of Nio, Xpeng & Li Auto: How Do Chinese language EV Shares Examine? for an in depth have a look at how Li Auto inventory compares with its rivals Nio and Xpeng.
| Returns | Jan 2025 MTD [1] |
Since begin of 2024 [1] |
2017-25 Complete [2] |
| LI Return | 0% | -36% | -17% |
| S&P 500 Return | 0% | 23% | 163% |
| Trefis Bolstered Worth Portfolio | 0% | 16% | 748% |
[1] Returns as of 1/1/2025
[2] Cumulative complete returns because the finish of 2016
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The views and opinions expressed herein are the views and opinions of the writer and don’t essentially mirror these of Nasdaq, Inc.
