Li Auto (NASDAQ:LI) results lifted its share price along with those of Chinese electric vehicle (EV) stocks Nio (NYSE:NIO) and XPeng (NASDAQ:XPEV).
Li saw net income of $38.5 million on $2.6 billion in revenue for the December quarter. Shares rose 6.5% in pre-market trading, opening at $24.36 per share. Li said growth will continue this year.
So far today, Nio is up 1.1% at $9.40 and XPeng is up 3.3% at $8.69.
The results showed continued strength for electric vehicle sales in China. They also fueled optimism for Tesla (NASDAQ:TSLA), the largest EV maker, whose shares rose to more than $200 per share.
Li revenues were slightly short of estimates, but profits were more than double expectations.
Analysts had been worried that demand for electric vehicles might be slowing in China, which is only now starting to recover from the Covid pandemic. But Li delivered 46,319 cars during the three months ending in December, and sales were up 66% from the previous year’s figure.
Li management expects to deliver 52,000 to 55,000 cars during the current quarter. If it meets its minimum estimate, it would see quarter-to-quarter growth of 12% and 64% growth year-over-year.
Li released three new cars last year, all of them roomy SUVs. Big family cars are replacing sedans as sales broaden from the luxury segment to the family segment of the market.
The results seemed to justify the move of Canada’s largest pension fund to sell shares in Apple (NASDAQ:AAPL) and buy Li, Nio and Tesla.
What Happens Next for Chinese EV Stocks?
Reaching mass market penetration in North America will require more charging stations, scaled battery production and models affordable by mid-market buyers. All these exist in China, which can boost related EV stocks.
On the date of publication, Dana Blankenhorn had a long position in AAPL. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.