Li Auto’s February Vehicle Deliveries Show Mixed Results Amid Competition

Li Auto (NASDAQ:LI) reported delivering 26,263 vehicles in February, marking a year-over-year increase of nearly 30%. However, this figure represents a 12% decline compared to the previous month. In a notable competitive shift, rival Xpeng (NYSE:XPEV) surpassed Li Auto by delivering 30,453 vehicles in February, a dramatic increase from 4,545 units delivered during the same month last year. Another competitor, Nio (NYSE:NIO), recorded 13,863 vehicle deliveries, reflecting a significant 62% increase year-over-year. While Li Auto hasn’t specified the main contributors to its growth, it’s probable that the Li L6, the most economical model in its lineup, played a crucial role in meeting its year-over-year sales standards.

The early months of the year typically experience sluggish sales in the Chinese automotive sector due to the Chinese New Year festivities, which fall between late January and mid-February. Consequently, a more accurate year-over-year comparison involves aggregating deliveries from January and February. In this context, Li Auto’s combined vehicle sales for January and February reached 56,190 units, indicating a modest rise of approximately 9% from 51,416 units during the same period last year.

Image by Lee Rosario from Pixabay

Li’s overall sales growth has been uneven, primarily due to the substantial promotional sales it launched at the end of the previous year, which likely drew forward some demand, resulting in weaker sales in the early months of this year. The Chinese EV marketplace is crowded, with over 100 brands competing for market share, putting pressure on volume growth and average selling prices. Historically, the company has relied heavily on its gasoline-powered range extenders to attract buyers. However, as charging infrastructure improves, this advantage may diminish, making it essential for Li to succeed with popular pure EV offerings. Unfortunately, the company’s first fully electric model, the MEGA van, priced above $70,000, has not met expectations, targeting a high-end market. Additionally, Li Auto falls behind competitors like Tesla and domestic firms such as Xpeng in autonomous driving technology, which may be compromising its competitiveness.

Despite lackluster growth trends, Li Auto’s valuation remains appealing. The company’s stock is trading at about $27 per share, translating to roughly 17 times consensus earnings estimates for 2025. Analysts predict Li’s revenues will grow a robust 30% in 2025. In contrast, U.S. counterpart Tesla trades at around 100 times its consensus earnings, despite expected revenue growth of only 15% this year.

Moving forward, how might Li Auto’s stock performance improve? Following the disappointing performance of the Fire pure EV model, the company is planning to launch additional pure EVs, including the Li i8 SUV anticipated in July. Should this model resonate well with consumers, it could enhance investor confidence in Li Auto’s position within the battery electric vehicle market. Furthermore, Li Auto may also benefit from growing foreign capital inflow to China, spurred by government stimulus and optimism surrounding the country’s technological advancements following the launch of the DeepSeek AI model. If investors reassess Li Auto’s growth potential and apply a higher valuation of around 35 times projected earnings, the stock could rise to approximately $54 per share. To compare Li Auto’s stock performance with competitors Nio and Xpeng, see our detailed analysis: Nio, Xpeng & Li Auto: How Do Chinese EV Stocks Compare?.

Investment Returns	Mar 2025 MTD [1]	2025 YTD [1]	2017-25 Total [2]
LI Return	-11%	14%	-5%
S&P 500 Return	-2%	-1%	161%
Trefis Reinforced Value Portfolio	-2%	-4%	658%

[1] Returns as of 3/4/2025
[2] Cumulative total returns since the end of 2016

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The views and opinions expressed herein are those of the author and do not necessarily reflect those of Nasdaq, Inc.