Li Auto Stock is the only Chinese EV stock you can consider

Chinese new energy vehicle (NEV) manufacturer. Li Auto Inc. NASDAQ: LI has started the electric vehicle (EV) race with competitors Nio Inc. NYSE: NIO AND Xpeng Inc. New York Stock Exchange: XPEV on relatively even footing in the Auto/Tire/Truck sector in 2020. As EV speculation hit the stock market, Xpeng and Li Auto hit all-time highs of $74.49 and $47.70, respectively, in November 2020. Nio reached an all-time high of $66.99 in January 2021.

And then there was one

Three years later, only one of China’s three electric vehicle makers is profitable, with its shares back near all-time highs, while the other two struggle in single-digit territory. Li Auto became profitable in 2023, while Nio and Xpeng continue to bleed, losing over half a billion dollars each in 2023. With the exception of Tesla Inc. NASDAQ:TSLAthe acronym EV and the word profits are rarely attributed or used in the same sentence as Rivian Automotive Inc. NASDAQ: RIVN, Lucid Group Inc. NASDAQ: LCID AND Fisker Inc. New York Stock Exchange: FSR everyone can attest to this.

What are new energy vehicles?

Li Auto calls its vehicles NEVs, which refers to vehicles that use alternative energy sources to traditional gasoline-powered cars. These include hybrid electric vehicles (HEVs), battery electric vehicles (BEVs) and plug-in hybrid vehicles (PHEVs).

Why is Li Auto different?

Li Auto focuses on family-friendly premium sport utility vehicles (SUVs). This segment has higher profit margins than the sedan. Li Auto also offers a limited number of models, including the Ideal L7, L8, and L9 models. This approach helps increase production and marketing efficiency. More importantly, Li Auto vehicles are hybrid electric. Because they use both gas and electricity, these vehicles are more easily adopted by mainstream drivers who may be reluctant to go 100% electric.

Range anxiety represents a significant barrier for potential electric vehicle customers, particularly families and consumers who live in apartments far from charging stations. Li Auto launched its long-awaited Ideal MEGA all-electric model in December 2023.

Feature Premium Innovation by Li Auto

Its models are powered by Nvidia Co. NASDAQ:NVDA The AD Max intelligent driving chips and cockpits are powered by Qualcomm Inc. NASDAQ:QCOM Snapdragon 8155 chip. Li Ideal models feature insulated glass with high-quality soundproof double-layer heating, individually controlled zone air conditioning, LCD cockpit and drop-down entertainment screens with a total of 5 screens and blackout roofs.

Over-the-air (OTA) updates of the Ideal L series have been updated 26 times. Ideal models feature Dolby Atmos and Dolby Vision to keep the whole family entertained, supporting a variety of external devices and turning vehicles into a mobile “Super VIP Cinema” on the go. Check the heat map of the sector on MarketBeat.

Crush the competition

On February 26, 2024, Li Auto reported fourth-quarter 2023 earnings per share of 60 cents, beating consensus estimates of 37 cents. Revenue increased 136.4% year over year to $5.871 billion versus consensus estimates of $5.566 billion. Quarterly vehicle deliveries grew 184.6% year over year to 131,805 vehicles. Full-year revenue was $17.44 billion, with 376,030 vehicles delivered. Vehicle sales increased 133.8% year over year to $5.69 billion.

The vehicle’s margin was 22.7% versus 20% in the same period a year ago. Net income was $810.2 million, an increase of 2,068% compared to the same period of the previous year, equal to $37.3 million. Free cash flow was $2.06 billion in the quarter.

The company issued downward guidance

Li Auto provided a lower revenue forecast for the first quarter of 2024 of between $4.397 billion and $4.529 billion versus $4.771 billion. Vehicle deliveries are expected to be between 100,000 and 103,000 vehicles.

What did the CEO have to say?

Li Auto CEO Xiang Li commented: “2024 will be an unprecedented year of new product launches for Li Auto, starting in March with the launch of our high-tech flagship and family MPV, Li MEGA, Developed on a pure BEV platform, Li MEGA integrates the latest technological advances in 5C BEV technologies, intelligent space and autonomous driving.” Li noted that they plan to begin mass delivery of the 2024 model year Li L7, L8, and L9 models in March 2024.

Li Auto analyst ratings and price targets I’m on MarketBeat. You can find the titles of Li Auto’s competitors and competitors at MarketBeat Stock Screener.

Daily mug template

The daily candlestick chart on LI illustrates a cup pattern. The cupped lip line formed at its swing high of $47.33 on August 7, 2023. LI proceeded to sell off to a low of $26.43 on January 22, 2024, before staging a sharp rally towards the cupped lip line on the peak of the Q4 2023 earnings gap. at $45.70. The daily relative strength index (RSI) rose above the 70 band and made a sharp reversal towards the 70 band. The 200-period daily moving average (MA) support is rising at $35.74. The pullback support levels are at $41.72, $38.62, $35.74 and $31.43.

Before considering Li Auto, you’ll want to hear this.

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