Default image

Li Auto Shares Jump on Strong Sales

  • 03.06.2025 06:10
  • marketwatch.com
  • Keywords: AI, Sales Growth, EV Market, Volume Growth

Li Auto's shares surged in Hong Kong after reporting strong May sales, surpassing 40,000 units for the first time this year and outperforming rival XPeng. Goldman Sachs upgraded its target price, citing better-than-expected profits and promising new electric models set for release later this year.

XPeng NewsLIsentiment_satisfiedXPEVsentiment_dissatisfiedGS/PAsentiment_satisfied
open_in_newOriginal article

Estimated market influence

Li Auto

Li Auto

Positivesentiment_satisfied
Analyst rating: Buy

Shares rose 6.5% due to strong sales of 40,856 vehicles in May, outperforming XPeng. Goldman Sachs raised target price to US$35.30 and expects further growth with new models.

XPeng

XPeng

Negativesentiment_dissatisfied
Analyst rating: Buy

Sold 33,525 units in May, less than Li Auto's 40,856.

CCB International

Neutralsentiment_neutral
Analyst rating: N/A

Analyst Qu Ke commented on market sentiment.

Goldman Sachs

Positivesentiment_satisfied
Analyst rating: —

Raised target price to US$35.30, citing better-than-expected profits and brighter sales prospects for Li Auto.

Hang Seng Index

Neutralsentiment_neutral
Analyst rating: N/A

Benchmark index rose 1.1% by midday.

Context

Analysis of Li Auto's Share Performance and Market Implications

Share Performance

  • Li Auto shares rose 6.5% in Hong Kong, reaching HKD 117.00 (equivalent to US$14.91), on track for its highest closing level since February.
  • The Hang Seng Index rose 1.1% by midday, outperforming the benchmark.

Sales Numbers

  • Li Auto delivered 40,856 vehicles in May, the first time it crossed 40,000 units this year.
  • Outperformed rival XPeng, which sold 33,525 units in May.

Analyst Upgrades and Sentiment

  • Goldman Sachs raised its target price for Li Auto's American depositary receipts to US$35.30 from US$31.70, citing better-than-expected gross profit and adjusted net profit.
  • Goldman Sachs expects the refreshed L series and MEGA Home to drive volume growth in Q3 and Q4.

New Electric Vehicle Launches

  • Li Auto is entering the full-EV market with two new SUVs:
    • i8 to be launched in July.
    • i6 to be launched in September.
  • Goldman Sachs expects the i8 and i6 to achieve average monthly volumes of 6,000 units and 10,000 units, respectively.

Strategic Considerations

  • Li Auto is focusing on artificial intelligence to reduce research and development expenses, enhancing its competitive position in the EV market.

Competitive Dynamics

  • Li Auto is gaining market share over rival XPeng, with stronger sales performance in May.
  • The company's strategic shift to full-EV market with improved product offerings positions it for stronger competition in the EV sector.

Long-Term Effects and Market Impact

  • The successful launch of i8 and i6 could significantly boost Li Auto's market share in the EV segment.
  • Goldman Sachs' upgraded target price reflects confidence in Li Auto's growth prospects and profitability.

Regulatory Implications

  • The move into the full-EV market aligns with China's push for greener energy and stricter emission standards, positioning Li Auto to benefit from government incentives and market demand.

Conclusion

Li Auto's strong sales performance, strategic product launches, and analyst upgrades indicate a positive outlook for the company. The shift to full-EV production and AI-driven efficiency improvements position Li Auto as a key player in the competitive EV market, with potential for sustained growth and increased market share.