Chinese new energy vehicle (NEV) maker Li Auto Inc. (NASDAQ: LI) started the electric vehicle (EV) race with competitors Nio Inc. (NYSE: NIO) and Xpeng Inc. (NYSE: XPEV) on relatively even footing in the Auto/Tires/Trucks sector in 2020. As EV speculation hit the stock market, Xpeng and Li Auto reached all-time highs of $74.49 and $47.70, respectively, in November 2020. Nio hit an all-time high of $66.99 in January 2021.
And Then There Was One
Fast forward three years later, and only one of the three Chinese EV makers is profitable, with its shares back up near its all-time highs while the other 2 struggle in single-digit territory. Li Auto turned profitable in 2023, while Nio and Xpeng continue to bleed deep red, losing over half a billion dollars each in 2023. With the exception of Tesla Inc. (NASDAQ: TSLA), the acronym EV and the word profits are rarely attributable or used in the same sentence as Rivian Automotive Inc. (NASDAQ: RIVN), Lucid Group Inc. (NASDAQ: LCID) and Fisker Inc. (NYSE: FSR) can all attest to.
What Are New Energy Vehicles?
Li Auto calls its vehicles NEVs, which refer to vehicles that use alternative power sources compared to traditional gasoline-powered cars. These include hybrid electric vehicles (HEV), battery electric vehicles (BEVs) and plug-in hybrid vehicles (PHEVs).
Why is Li Auto Different?
Li Auto focuses on premium sports utility vehicles (SUVs) that are suitable for families. This segment has higher profit margins than sedan. Li Auto also offers a limited number of models, including the Ideal L7, L8, and L9 models. This approach helps boost production and marketing efficiencies. Most importantly, Li Auto vehicles are hybrid electric. Since they utilize both gas and electricity, these vehicles are more easily adopted by mainstream drivers who may be reluctant to go all-electric.
Range anxiety is a significant barrier for potential EV customers, especially families and consumers living in apartments away from charging stations. Li Auto launched its long-awaited all-electric model Ideal MEGA in December 2023.
Li Auto's Feature Premium Innovation
Its models are powered by Nvidia Co. (NASDAQ: NVDA) AD Max intelligent driving chips, and cockpits are powered by Qualcomm Inc. (NASDAQ: QCOM) Snapdragon 8155 chips. Li Ideal models come with premium soundproof double-layered heating insulated glass features, individual zone-controlled air conditioning, LCD cockpit, and drop-down entertainment screens for a total of 5 screens and blackout roofs.
The Ideal L series over-the-air (OTA) updates have been updated 26 times. Ideal models have Dolby Atmos and Dolby Vision to entertain the whole family, supporting a variety of external devices and transforming the vehicles into a mobile "Super VIP Cinema" on the go. Check out the sector heatmap on MarketBeat.
Crushing the Competition
On February 26, 2024, Li Auto reported Q4 2023 EPS of 60 cents, beating consensus estimates by 37 cents. Revenues surged 136.4% YoY to $5.871 billion versus $5.566 billion consensus estimates. Quarterly vehicle deliveries grew 184.6% YoY to 131,805 vehicles. Full-year revenues were $17.44 billion, with 376,030 vehicles delivered. Vehicle sales rose 133.8% YoY to $5.69 billion.
The vehicle margin was 22.7% versus 20% in the year-ago period. Net income was $810.2 million, representing a 2,068% increase from the year-ago period of $37.3 million. Free cash flow was $2.06 billion in the quarter.
The Company Issued Downside Guidance
Li Auto gave downside Q1 2024 revenue guidance of $4.397 billion to $4.529 billion versus $4.771 billion. It expects vehicle deliveries between 100,000 and 103,000 vehicles.
What Did the CEO Have to Say?
Li Auto CEO Mr. Xiang Li commented, "2024 will be an unprecedented year of new product launches for Li Auto, beginning 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 advancements in 5C BEV technologies, smart 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 are at MarketBeat. Li Auto's peers and competitor stocks can be found with the MarketBeat stock screener.
Daily Cup Pattern
The daily candlestick chart on LI illustrates a cup pattern. The cup 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 its cup lip line on its Q4 2023 earnings gap peaking at $45.70. The daily relative strength index (RSI) spiked up through the 70-band and took a sharp reversal back down towards the 70-band. The daily 200-period moving average (MA) support is rising at $35.74. Pullback support levels are at $41.72, $38.62, $35.74 and $31.43.
