It’s fair to say that Chinese electric vehicle (EV) start-ups aren’t in favor at the moment. Among them is Li Auto (NASDAQ:LI), which markets premium smart EVs. Although LI stock once flew high, lately it has been stalling out.
Li Auto bills itself as “an innovator in China’s new energy vehicle market.” The automaker also claims to be the first company “to successfully commercialize extended-range electric vehicles, or EREVS, in China.”
Judging by the recent price action of LI stock, though, you might be led to believe that the company’s all talk and no results. However, there is some data that might convince you Li can actually deliver — literally — and that the share price is much lower than it ought to be.
A Closer Look at LI Stock
Back in July of 2020, the initial public offering (IPO) price range for LI stock — or more accurately, the American depositary shares — was set between $8 and $10. The final IPO price, though, was soon raised to $11.50.
Then at the stock’s public debut, the price quickly jumped into a range between $16 and $17. However, the biggest gains were still yet to come.
November of 2020 was a particularly amazing month for LI stock. It reached a stunning pinnacle when it hit a 52-week high of $47.70 on Nov. 24.
In hindsight, it’s evident that this rally was too much, too fast. Thus, the share price tumbled for the remainder of 2020 as well as 2021’s first quarter.
Fast-forward to today and LI stock is trading at around $20. There are a few different ways to assess this situation. For instance, we could say that the current momentum is bearish.
From a technical standpoint, there’s no denying the damage that’s been done. On the other hand, though, if there are reasons to like the company, then maybe we’re looking at a rare bargain among the electric vehicle stocks.
An Update to Lift Your Spirits
If you were already invested in LI stock last year, then you might be feeling a sense of disappointment today.
To that, I’d say that there’s a lesson to be learned: don’t chase after elevated prices in stocks during the post-IPO hype phase.
But hey, I’m not here to reprimand folks who may have timed their investments a little poorly. Instead, I want to share some recently released data that ought to lift your spirits.
This was revealed on April Fool’s Day, but I’m fairly confident the data is real. Recently, Li Auto updated its delivery numbers for March, offering a snapshot of a company that’s clearly in hyper-growth mode.
More specifically, the company’s flagship electric SUV known as the Li ONE experienced great delivery numbers. The vehicle’s volume production commenced back in November 2019. Now, the company has delivered more than 33,500 Li ONEs as of the end of this past December.
That alone is not too bad for an emerging EV start-up. But get this: in just March of 2021, Li Auto delivered 4,900 Li ONEs.
Putting It in Perspective
Not impressed yet? Let’s put that number into perspective and see if a big-picture view changes things for you.
According to the company, those Li ONE deliveries represent a 238.6% year-over-year (YOY) increase — pretty mind-blowing. Moreover, the March deliveries of the Li ONE brought the total deliveries for Q1 2021 to 12,579. That’s a 334.4% improvement YOY.
Beyond that, the company has also demonstrated a strong domestic reach. As of Mar. 31, Li Auto had “65 retail stores covering 49 cities, and 135 servicing centers and Li Auto-authorized body and paint shops operating in 98 cities.”
You know what this growth story is starting to remind me of? It’s making me think of Nio (NYSE:NIO) and that company’s improvement in delivery figures. Notably, Nio’s shareholders have enjoyed substantial returns over the long term.
The Bottom Line on LI Stock
So, if you found yourself holding the bag because you bought LI stock during the hype phase, I hope this update has brought you some comfort.
And if you’ve been waiting on the sidelines? Well, in my opinion, now is a great time to check the data and consider taking action.
On the date of publication, David Moadel did not have (either directly or indirectly) any positions in the securities mentioned in this article.
David Moadel has provided compelling content – and crossed the occasional line – on behalf of Crush the Street, Market Realist, TalkMarkets, Finom Group, Benzinga, and (of course) InvestorPlace.com. He also serves as the chief analyst and market researcher for Portfolio Wealth Global and hosts the popular financial YouTube channel Looking at the Markets.
