Shares of Chinese electric-car maker Li Auto (LI 6.69%) suffered their latest sell-off Thursday, falling 7.1% through 12:05 p.m. ET after updating projections for electric-vehicle (EV) production -- and disappointing investors. Just last month, Li Auto wowed investors with news of its 2023 accomplishments, including 173.5% sales growth and net profits that were up 18 times versus 2022. Instead of losing money in 2023, Li earned $1.7 billion.

But Li then disappointed investors, warning that 2024 doesn't look as hot. Limiting its lookout to Q1 2024, management said sales will range from 100,000 to 103,000 EVs -- a big increase viewed year over year but a substantial slowdown from Q4 when the company recorded sales of 131,805 units.

It turns out even that downbeat view was overoptimistic.

Li's incredible shrinking estimates

"Due to lower-than-expected order intake," Li now says Q1 deliveries will range from only 76,000 to 78,000 electric vehicles, as much as 26% fewer than initially projected. Granted, even 76,000 units would represent a healthy 44.5% growth rate from the 52,584 units shipped in Q1 2023 -- but investors still seem a bit shocked at this rapid rollback in volume predictions.

What went wrong?

Historically, Li specialized in building "extended-range" EVs -- what are more commonly known as hybrid electrics. Issuing an apology, Li CEO Xiang Li admitted his company goofed in attempting to ramp up production of its high-priced MEGA all-electric car "as if the model had already entered the 1-to-10 scaling phase." Rather, it was just beginning to build a market for itself as a pure battery electric vehicle.

Is Li stock still a buy?

Now Li is starting over. To introduce MEGA to the market, the company will focus on wealthier cities that can afford the new EV and selling to existing hybrid customers, as it builds a reputation in all electrics. This will mean slower sales growth in the short term, but longer term, it will have a better chance of success.

Ultimately, a 45% growth rate on a stock trading for 22 times earnings sounds like a bargain to me.