Tesla’s closest rival in China Li Auto reports a big drop in first-quarter earnings, margins in warning to EV market peers
- First-quarter earnings fell 37 per cent from a year earlier, and 90 per cent from the final quarter of 2023
- Quarterly EV deliveries fell sequentially for the first time since mid-2022, while CEO said the firm had placed too much focus on volume and competition
The premium electric-vehicle (EV) maker said earnings fell 37 per cent to 591.1 million yuan (US$81.7 million) from a year earlier, according to a Hong Kong stock exchange filing on Monday. They declined 90 per cent from the final quarter of 2023.
While its revenue of 25.6 billion yuan was in line with the consensus among analysts, the Beijing-based company fell short of their net income forecast of 1.12 billion yuan, according to data compiled by Bloomberg.
“As a profit star, Li Auto’s woeful performance showed how a brutal price war could affect the major players,” said Eric Han, a senior manager at Suolei, an advisory firm in Shanghai. “It is likely to hurt investors’ confidence in China’s EV industry.”
The stock climbed 4.2 per cent to HK$99.90 in Hong Kong trading on Monday, before the first-quarter report was announced. However, it has slumped 28 per cent so far this year, and 14 per cent over the past 12 months.
