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Why Li Auto Jumped 11.9% in January

By Rich Duprey - Feb 7, 2021 at 2:49PM

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The Chinese EV maker is getting good traction with its electric SUVs.

What happened

Shares of Li Auto (LI 0.92%) rose 11.9% in January, according to data from S&P Global Market Intelligence, after the Chinese electric vehicle (EV) manufacturer kicked off the month with a positive report on vehicle deliveries for the previous month and year. 

So what

Analysts subsequently became more bullish about its growth prospects because Li was exhibiting much more strength than expected. The Chinese EV market, or what it calls "new-energy vehicles," is the biggest in the world, and though it is a relatively crowded market the loss of subsidies and tax credits could soon weed out the weakest automakers.

Li One electric SUV

Image source: Li Auto.

Li Auto will probably continue to be one of the top-tier producers. Its Li One electric SUV has been extremely popular and Li has made almost 39,000 since launching it back in November 2019. Now it wants to begin producing different types of vehicles to appeal to a wider audience.

LI Chart

LI data by YCharts

Now what

As noted, the competition is stiff. Not only is Li going up against domestic rivals like NIO and Xpeng, but Tesla has a major presence in China and both GM and Ford are targeting it as well.

Chinese economic policy will continue to play a role in how the market develops there, but look for Li Auto to keep charging forward to be more than a bit automotive stock on the scene.

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Stocks Mentioned

Li Auto Inc. Stock Quote
Li Auto Inc.
$22.02 (0.92%) $0.20
Ford Motor Company Stock Quote
Ford Motor Company
$13.05 (-3.33%) $0.45
Tesla, Inc. Stock Quote
Tesla, Inc.
$724.37 (-5.88%) $-45.22
General Motors Company Stock Quote
General Motors Company
$37.10 (-2.90%) $-1.11
Nio Inc. Stock Quote
Nio Inc.
$14.55 (1.68%) $0.24
XPeng Inc. Stock Quote
XPeng Inc.
$22.64 (-0.79%) $0.18

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

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