Stocks of Several Car Companies in the Chinese Market Fall, Decreasing of up to 12.89% for Li Auto

Kevin WongMar 11, 2024, 08:23 AM

On March 4th, it was reported that Li Auto's Hong Kong stock price plummeted by 12.89% during midday trading, resulting in a direct evaporation of HKD 40 billion (approximately RMB 36.8 billion) from its market value of HKD 310.9 billion. Additionally, last Friday, after the close of the U.S. stock market, Li Auto's stock price experienced a significant 5.1% decline, leading to a market value loss of about RMB 16.5 billion. In recent days, Li Auto's newly launched MPV, MEGA, drew attention for its high-profile debut with a selling price of CNY 559,800 (approximately THB 2,786,000). Many criticized its high price, and the vehicle was frequently discussed by people before its launch, mainly focusing on its personalized design.





The sharp decline in the stock price of Li Auto is attributed to various factors. On one hand, it can be ascribed to market trends, affecting not only Li Auto but also other companies such as LEAPMOTOR, Nio, Xpeng, GAC Group, Great Wall Motors, BAIC Motors, etc., all experiencing declines, albeit not as significant as NIO's.





The main reason for the decline in deliveries in February is attributed to the Chinese New Year holiday. Li Auto delivered 20,251 vehicles in February, marking a 35% month-on-month decrease despite a 21.8% year-on-year growth. This performance represents its poorest monthly delivery record in nearly a year, leading to its loss of the top in the new energy vehicle sector for two consecutive months, overtaken by AITO, one of its competing brands.





On the other hand, the unexpectedly high pricing of MEGA by Li Auto has sparked significant controversy. During the press conference, Li Xiang, the CEO of Li Auto, referred to the MEGA as the world's fastest-charging and the most spacious electric passenger vehicle, claiming that buying MEGA is equivalent to buying a house.



Li Auto's Retail Center is experiencing a booming popularity.




However, as of now, Li Auto has not disclosed the pre-order volume for MEGA, potentially raising investor concerns about the car's market prospects. Simultaneously launching the improved L7/L8/L9 models alongside MEGA, with significant enhancements in product capabilities but unchanged prices, contrasts with other automakers' strategies of price reductions and feature additions. This may result in a perception gap for consumers, although it hasn't sparked significant discussion or attention, with the spotlight primarily on MEGA.


In summary, the sharp drop in Li Auto's stock price reflects market concerns and uncertainties about the company. Despite its impressive performance in 2023 with an annual sales volume of 376,000 vehicles, Li Auto faces the challenge of reaching this year's target of 800,000 units, requiring additional efforts and adjustments.

(Author: Kevin Wong)

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