Li Auto (LI) comfortably beat second-quarter earnings estimates early Tuesday while guiding deliveries of electric vehicles higher for the current quarter. Li Auto stock tumbled Tuesday, but shares have more than doubled in 2023.
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The premium EV startup is challenging EV giants Tesla (TSLA) and BYD (BYDDF) in China, along with startup peers Nio (NIO) and XPeng (XPEV).
The Mega minivan, Li Auto’s first all-electric model, will be unveiled in Q4, the startup confirmed Tuesday.”We are confident that Li Mega will become a new sales blockbuster in the RMB 500,000 (around $69,237) and higher price segment,” the Li earnings release Tuesday said.
Li Auto Earnings
Estimates: Analysts expected Li Auto to swing to EPS of 25 cents from a net loss of three cents per share a year ago. They saw revenue swelling 188%, year over year, to $3.723 billion, according to FactSet.
That would mark the fast-growing EV startup’s first $3 billion quarter after it crossed $1 billion for the first time in Q3 2021 and $2 billion in Q4 2022.
Results: Li Auto earnings raced to 36 cents a share. Revenue soared 209% to $3.983 billion, FactSet shows. Both gross margin and free cash flow rose. Operating expenses and R&D expenses also rose.
Outlook: For the third quarter, Li Auto expects to deliver 100,000-103,000 vehicles. That would be up from 86,533 vehicles in Q2. It has already reported July deliveries of 34,134 vehicles.
Revenue should come in at $4.46 billion-$4.59 billion, up 246%-254% and well above consensus.
Prior to Q2 results, Wall Street saw Li Auto earning 58 cents per share for the full year, its first annual profit.
Li Auto Stock
Shares of Li Auto sank 11.6% to 41.26 in Tuesday’s stock market action. China stocks sustained broad and sharp losses Tuesday on weak exports and imports data, with Hong Kong’s Hang Seng Index down 1.8%.
Li Auto stock rose 1.8% to 46.65 on Monday, reaching a fresh 52-week high of 47.33 intraday. LI stock was on the cusp of topping its record 47.70 set in November 2020, a few months after its IPO.
Year to date, Li Auto shares have spiked 109%.
The luxury EV startup has far outperformed peers Nio stock and XPeng in 2023 on robust deliveries while staying out of the price war started by Tesla.
Li Auto EV Deliveries, Targets
The Chinese EV startup belongs to the IBD 50 list of top growth stocks. Li Auto calls itself a leader in China’s premium auto market for SUVs priced above RMB 300,000 (roughly $42,000).
In Q2, Li delivered 86,533 vehicles, well above prior guidance for 76,000-81,000. Sales were also up almost 65% from 52,584 EVs delivered in Q1.
The maker of premium vehicles said it surpassed its total 2022 deliveries in the first half of 2023 itself. Analysts have singled out Li among startups for its superior execution.
In July, Li Auto continued to see sales momentum. Nio and XPeng picked up on the back of new models.
Looking ahead, “Li Auto could be in a more defensive position as competition intensifies,” Deutsche Bank analyst Edison Yu said in note to clients last week.
On Aug. 3, Li Auto rolled out a new version of its L9, removing certain features to enable a lower price.
Tesla triggered an EV price war as China slows. China EV sales are expected to grow around 30% this year after more than doubling in 2021 and 2022.
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