|Image Source: AI Imagine|
While Tesla captures most electric vehicle headlines, Chinese automaker Li Auto has emerged as a breakout stock in 2023. Li’s shares have rocketed over 80% year-to-date, fueled by surging delivery volumes and multiple new luxury EV model launches.
Among U.S.-listed Chinese electric vehicle manufacturers, Li Auto stands out as the top performer this year. Li’s stock price skyrocketed from $20.98 on January 1 to $38.59 by September 21, according to TradingView.
The meteoric rise contrasts sharply with sector leader Tesla, which remains down over 20% in 2023 despite recent rebounds. Li gained 0.5% during September 20 trading, though it dipped 3.1% over the past week.
The stock has found solid support around $38.3, where buying interest often spikes. Resistance hovers near $41, with selling pressure challenging further upside. Surpassing this level could retest August’s all-time peak of $47.33.
Robust Delivery Figures Turbocharge Growth
Li Auto’s main catalyst this year has been stellar delivery figures, fueling substantial revenue and margin expansion. August sales reached 34,914 vehicles, a staggering 7x year-over-year increase.
This handily beat domestic rivals Nio’s 19,329 deliveries and XPeng’s 13,690. Li Auto is capitalizing on strong demand for its extended-range electric cars, which feature a gas generator alleviating range anxiety.
After previously offering just one model, Li Auto rolled out the full-size L9 SUV, mid-size L8 crossover, and L7 sedan in 2022. These premium vehicles resonate with status-conscious Chinese consumers.
August’s delivery surge follows similarly impressive figures in previous months. In Q2 2022, Li delivered 28,687 cars, jumping 63% from Q1. Total first half deliveries of 68,983 represented a 190% increase year-over-year.
These robust numbers underscore Li Auto’s growth story. Q2 revenue jumped 73% annually to $1.5 billion, with gross margins expanding to 23.8% compared to 19.8% in Q1. Vehicle sales led the advance.
With consumers flocking to its new luxury EV lineup, Li is solidly positioned to gain domestic market share. China’s rapid transition to electric cars, subsidies for new energy vehicles, and competitive pricing advantages provide tailwinds.
Bullish Analyst Sentiment Reflects Upside Potential
Given Li Auto’s financial outperformance in 2022, analysts remain staunchly bullish on upside potential. According to MarketBeat, the consensus 12-month price target stands at $70.42.
This implies over 82% upside from current levels. Li Auto earns mostly “Buy” recommendations, with six bullish ratings among analysts.
UBS analyst Paul Gong sees Li’s extended-range platform as a key differentiator providing a competitive edge in range, charging convenience, and costs. He believes Li can exceed delivery guidance of 90,000–100,000 vehicles in 2022 based on order backlogs.
Citi analyst Jeff Chung also sees Li sustaining higher growth versus rivals. He argues strong early order flows for newer models and channel expansion can drive further market share gains.
However, risks linger around supply chain challenges, elevated R&D spending, and capacity constraints if demand continues surging. But Li’s agility in navigating Shanghai’s COVID-19 lockdown signals resilience.
Can Li Auto Stock Reach $100 in 2023?
Despite lofty analyst targets, Li Auto faces an uphill battle to reach $100 per share during 2023. China’s recent economic headwinds could hamper consumer demand. The stock also appears overbought in the near-term.
However, Li’s growth story remains intact for long-term investors. With smart competitive positioning, stellar new EVs, and vigorous deliveries, Li Auto is cementing itself as a premium Chinese brand. It still trades at a fraction of Tesla’s valuation.
If Li can sustain 80%+ delivery growth in coming quarters while expanding margins, analyst projections of 150–200% upside over 12 months seem reasonable. This emerging standout has road left to run.