Shares of Li Auto (NASDAQ:LI) stock climbed as much as 6% this morning on news that the Chinese electric vehicle maker has received more than 30,000 reservations for its new electric SUV, the L9. These orders for the L9 comes only 72 hours after Li made the new model available for preorder.
Investors appear to be optimistic about the L9. The new vehicle should help boost sales. While LI stock has fallen a bit from this morning’s highs, shares are still up 23% YTD at just under $40.
Here’s what investors should know about Li Auto moving forward.
What’s Happening with LI Stock?
Today, Li Auto announced premarket that orders for its new “flagship smart SUV” had already surpassed 30,000 since the vehicle became available for reservation. The company specified that it has taken in more than $22.4 million from the L9 preorders. Each order requires a $746 deposit. Deliveries of the EV are expected to start by the end of August.
Li Auto and other Chinese EV makers got some more good news today, however. Apparently, the Chinese government is considering an extension of tax exemptions on EV purchases. Many Chinese EV makers experienced production halts in April and May due to Covid-19 restrictions, so this is a big boon.
Looking forward, the strong reservations for the L9 — and the money these reservations are already generating — are yet another positive development for the company. In May, Li Auto reported that deliveries jumped 176% from April. In its most recent earnings, the company also reported gross margins of 22.6% and a 168% year-over-year (YOY) increase in revenue. Factories in China are back near full capacity, too, boding well for production and deliveries.
What’s Next
LI stock continues to break out today on preorder news and the potential tax exemption extension. Li Auto is also one of the few stocks that’s up substantially this year, having risen more than 20% so far while the S&P 500 and Nasdaq fall amid the broad bear market. Continued strong sales and deliveries should help bolster the company’s share price moving forward.
On the date of publication, Joel Baglole did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
