Automobile company Li Auto (LI) stock soared after the company teased about its first all-electric SUV, the Li i8. The company released images of the new model, boosting investor optimism ahead of the launch. Following the announcement, Li Auto’s Nasdaq-listed shares jumped over 14% in pre-market trading, while its Hong Kong-listed stock (HK:2015) gained 12.5% today.
Li Auto is a Chinese automobile manufacturer, offering a range of smart electric vehicles (EVs).
Li Auto Expands into All-Electric Segment
With the Li i8, Li Auto expands into the all-electric or BEV (battery electric vehicle) segment, aligning with China’s push for new energy vehicles amid supportive government policies. Its first EV attempt with the Mega minivan in early 2024 failed, but now it’s re-entering the pure EV market with the Li i8 SUV.
The strong market response highlights investor confidence in Li Auto’s move into pure EVs, positioning it to tap into China’s growing demand for premium electric SUVs.
According to media reports, the Li i8 SUV is set to debut at a Shanghai auto show and hit the market in the first half of the year.
Tesla to Face More Competition in BEV Market
The Li i8 is poised to heighten competition in China’s BEV market. The i8 will compete directly with Tesla’s (TSLA) Model Y in China. Tesla has been facing mounting pressure in the market, leading to price cuts and special offers. In January, Tesla’s total sales in China, including exports, fell 11.49% year-over-year and dropped 32.56% from December.
Despite the tough competition, Tesla aims for a rebound with its upcoming Juniper Model Y. Pre-orders have already been secured in China, with production slated in California, Shanghai, Texas, and Berlin.
Is Li Auto a Good Stock to Buy Today?
On TipRanks, LI stock has been assigned a Strong Buy rating, backed by three Buy and one Hold recommendations. The Li Auto share price target is $29.90, which is 13.43% above the current price level.
