LI - LI Stock Alert: Is Li Auto the Real Next Tesla?
2023-05-01 10:57:30 ET
InvestorPlace - Stock Market News, Stock Advice & Trading Tips
A Chinese automaker recently set a delivery record, leading to speculation that it may be the next Tesla (NASDAQ: TSLA ). Electric vehicle (EV) producer Li Auto (NASDAQ: LI ) reported 52,584 Q1 deliveries , an increase of almost 66% from the first quarter of 2022. While LI stock has started this week off in the red, investors shouldn’t overlook this company’s progress. It reported significantly better quarterly delivery statistics than any of its Chinese EV peers, including Nio (NYSE: NIO ) and Xpeng (NYSE: XPEV ). This puts it on track for an excellent year if it can continue its growth patterns. With Tesla’s recent earnings disappointment, Li may provide investors with the type of EV market exposure they are seeking.
Does this mean that Li Auto should be hailed as the next Tesla? Let’s take a closer look at both companies.
What’s Happening With LI Stock
After starting this morning on a dip, LI stock has already rebounded. As of this writing, it is up about 1% for the morning, despite some volatility. While it turned around, all aforementioned EV stocks are in the red today. TSLA stock is down 1.5%, with NIO down 1% and Xpeng down 1.5%. It’s not a good day for the EV sector so far, but LI stock is still coasting off the momentum generated by its recent delivery record. This puts it in an excellent position to keep rising and be among 2023’s breakout stocks.
Discussions of the next Tesla or the “Tesla-killer” have often involved companies such as Rivian (NASDAQ: RIVN ) or fellow Chinese EV producer BYD Company (OTCMKTS: BYDDY ). While Li is not a name that most experts would have included prior to Q1, the company has proven it deserves to be in the running for that lofty title. The fact that it delivered 20,823 EVs during March 2023 alone, while Nio delivered only 18,230 for the entire quarter, shows that it has pulled to the front of China’s EV race. It is already overtaking its primary domestic rivals, and if it can do that, it can compete with Tesla. As InvestorPlace contributor Joel Baglole reports:
“Strong delivery numbers have helped to propel LI stock higher since last fall. In this year’s first quarter, Li Auto delivered 52,584 EV models to customers, a 65% year-over-year increase . In all, the company has now delivered more than 300,000 EVs, mostly within the domestic Chinese market. Li Auto has also impressed with its financial results, most recently reporting earnings per share ( EPS ) of 13 cents, which was nearly double the 7 cents a share consensus forecast by analysts. Growth is expected to continue as China goes all-in on electric vehicles, and EV stocks like Li are set to capitalize on the tailwinds.”
Why It Matters
Chinese automakers suffered setbacks throughout 2022 as Covid-19 imposed shutdowns and closed factories nationwide. The entire industry has struggled to regain the ground it lost, but Li’s deliveries indicate that it has done a better job than its peers.
InvestorPlace ‘s Louis Navellier thinks that LI stock has plenty of room to run , naming the company as one of his favorite EV startups. He also notes that Li plans to add two new models to its EV lineup, which also keeps investor enthusiasm high as the company pulls into Q2 on a high note.
All this suggests that Li is in an excellent position to keep rising. If it does, it will undoubtedly threaten Tesla, especially once it extends into international markets.
On the date of publication, Samuel O’Brient did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines .
Samuel O’Brient has been covering financial markets and analyzing economic policy for three-plus years. His areas of expertise involve electric vehicle (EV) stocks, green energy and NFTs. O’Brient loves helping everyone understand the complexities of economics. He is ranked in the top 15% of stock pickers on TipRanks.
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