Please ensure Javascript is enabled for purposes of website accessibility

Why Li Auto Stock Is Higher Today

By John Rosevear - Mar 11, 2021 at 10:51AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

A bullish take from Wall Street is giving shares a boost.

What happened

Shares of Chinese new-energy vehicle maker Li Auto (LI -2.21%) are trading higher on Thursday since a Wall Street analyst initiated coverage of the company with a bullish note.

At 10:15 a.m. EST, Li's American depositary shares were up about 6.8% from Wednesday's closing price.

So what

In a new note on Thursday morning, Needham analyst Vincent Yu initiated coverage of Li Auto with a buy rating and a price target of $37. 

Yu wrote that he's positive on the company's "differentiated" electric vehicles, which have built-in gasoline-powered generators to recharge when no charging stations are available. While fast-charging stations are common in and around major cities in China, they can be hard to find in other areas; Li has had good success selling its Li ONE SUV outside big-city areas. 

A Li ONE, an electric SUV, shown in a mountain area.

Li Auto's SUV, called the Li ONE, is an electric vehicle with a gasoline-powered "range extender" generator that makes it usable in parts of China where fast chargers are still scarce. Image source: Li Auto.

Yu also noted with approval that Li Auto has shown impressive discipline on cost and margins, and he said that discipline, along with its vehicle strategy, make it a "quality asset" in the fast-growing electric-vehicle space. 

Now what

Looking further ahead, Yu thinks that Li Auto can be a longer-term play. As he noted, monthly electric-vehicle sales in China have grown by double-digit percentages since May of last year, and the Chinese government's target is to have electric vehicles make up 20% of Chinese passenger-vehicle sales by 2025. 

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Li Auto Inc. Stock Quote
Li Auto Inc.
LI
$23.47 (-2.21%) $0.53

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

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning service.

Stock Advisor Returns
330%
 
S&P 500 Returns
115%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 05/23/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.