It’s a shame that some financial traders in the U.S. don’t pay any attention to China-based electric vehicle (EV) manufacturer Li Auto (NASDAQ:LI). Or worse yet, some investors are getting shaken out of a perfectly good trade with LI stock. The more you learn about Li Auto, the more you’ll want to buy and hold the stock.
I’m not claiming that Li Auto doesn’t have any risks. There’s an international regulatory issue that investors should be aware of. Still, the numbers don’t lie, and in 2023 the numbers show that Li Auto is selling a whole lot of EVs.
Why Some LI Stock Traders Are Worried
Previously, I told people to buy LI stock on the red days, not sell it. Of course, some folks will sell their shares anyway, especially when there’s perceived headline risk.
A headline story that has captured investors’ attention comes out of the European Union (EU). As InvestorPlace contributor William White reported, some Chinese EV companies are attempting to expand into the EU, but regulators from the region are considering anti-subsidy tariffs on Chinese imports.
Apparently, these EU regulators seek to protect domestic producers. Furthermore, they feel that China’s large EV subsidies are keeping China-produced vehicles cheap and are thereby allegedly distorting the EV market.
This, by itself, isn’t a reason to panic-sell LI stock. Li Auto isn’t under threat of losing actual business; at worst, the company might lose some potential business in the EU.
Besides, these protectionist maneuvers are often just acts of posturing. I suspect that there will be an arrangement in which China-based EV makers can sell their vehicles in the EU and the government will get a cut of the profits.
No Worries: Li Auto Is in the Fast Lane
Here’s a tip: If the EU headline risk causes LI stock to crash, just go ahead and scoop up some shares. After all, seasoned investors tend to have a “this too shall pass” attitude during apparent crisis situations.
In any event, Li Auto hasn’t needed EU-based business to succeed. The proof, as I like to say, is in the numbers. If you can believe it, Li Auto delivered 34,914 EVs in August 2023, up 663.8% year-over-year.
Generally speaking, the major China-based EV manufacturers fared well in August. Yet, compared to its peers, Li Auto is really knocking it out of the park.
By the end of August, Li Auto’s total vehicle deliveries reached 208,165 year-to-date. So, if Li Auto manages to penetrate Europe’s EV market, that’s fine but it’s not a necessity for this already thriving company.
Stay in the Driver’s Seat With LI Stock
I’ve said it before, and I’ll say it again. Buy Li Auto shares on the red days, and just sit back and enjoy the green days. Really, there’s no need to get shaken out every time there’s a scary headline story.
Thus, in case you haven’t figured it out by now, I’m still quite bullish on LI stock. The only reasonable strategy right now is to just buy and hold the shares. Then, wait for the Li Auto share price to reach triple-digits, which might happen a lot sooner than you think.
On the date of publication, David Moadel did not have (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.
