Li Auto Inc (NASDAQ:LI) (HK:2015) shares tumbled on Monday following underwhelming Q4 earnings and a disappointing Q1 2025 outlook. The company’s stock fell by 7% in Hong Kong, significantly lagging behind the 1% rise in the Hang Seng Index. This followed a 4.3% drop in its U.S.-listed shares on Friday.
Key Highlights from Li Auto’s Financial Report
- Q4 Revenue: A record 44.3 billion yuan (~$6.1 billion), marking robust growth.
- Q4 Earnings per Share (EPS): 10.04 yuan, down from the previous year, reflecting shrinking profit margins.
- Q1 2025 Revenue Outlook: Forecasted between 23.4 billion yuan and 24.7 billion yuan (~$3.2 billion to $3.4 billion), falling well short of analyst expectations of 33.5 billion yuan.
Market Reaction
- Li Auto's Stock: Fell 7% in Hong Kong and 4.3% in U.S. trading.
- Competitor Stocks: Shares of Chinese EV makers such as BYD Co (HK:1211), NIO Inc (HK:9866), and Xpeng Inc (HK:9868) rose by as much as 3.7%.
Analyst Downgrades and Investor Sentiment
- Macquarie downgraded Li Auto from Outperform to Neutral, citing concerns about sustained earnings growth amid intense competition.
- Nomura also shifted its rating from Buy to Neutral, emphasizing caution amid Li’s softer outlook and upcoming EV launches from Chinese competitors.
Competitive Landscape and Upcoming Models
- Li Auto announced plans to launch two new all-electric SUVs — the Li i8 and Li i6 — in late 2025.
- While Li Auto has demonstrated strong sales growth in recent years, its profit margins have been pressured by an ongoing price war in China's EV sector.
Outlook for Chinese EV Market
Despite challenges, the broader Chinese EV sector may benefit from Beijing’s expected rollout of additional subsidies to stimulate consumer spending.
Relevant APIs for Tracking EV Market and Stock Data
\u2705 Earnings Calendar API — Stay updated on Li Auto’s upcoming earnings reports and financial performance.
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Conclusion
Li Auto's disappointing outlook and analyst downgrades reflect mounting concerns about its ability to sustain growth amid aggressive competition. Investors will closely watch its upcoming SUV launches and Beijing’s stimulus efforts to assess the company's recovery prospects.
