Li Auto (NASDAQ:LI) stock surpassed revenue expectations with strong growth, delivering 50,353 vehicles in December, a 137% year-over-year increase. Q4 deliveries rose 184% YoY to 131,805. A recent partnership with Nvidia (NASDAQ:NVDA) involves using Nvidia’s DRIVE Thor for autonomous driving, potentially boosting the company’s long-term sales.
Nvidia’s car computer energized LI’s upcoming EVs, offering promising prospects. With Li Mega deliveries set for March 1, the stock is poised for an upward trajectory, making it a compelling buy amid improving market conditions.
Partnership with Nvidia
Li Auto has partnered with Nvidia for its new fleet of electric vehicles, integrating Nvidia’s DRIVE Thor centralized car computer for advanced autonomous driving.
This collaboration marks a significant step for Li Auto, aiming to revitalize its performance after challenging quarters in 2023. The move aligns with Li’s prior use of Nvidia’s technology and showcases a strategic push toward AI-driven advancements in the EV industry.
Nvidia’s latest system-on-a-chip provides 2,000 teraflops of performance, allowing manufacturers to allocate resources for autonomous driving, in-vehicle AI, infotainment, and driver assistance.
Li Auto, alongside major EV makers like Nio and Xpeng, utilizes Nvidia’s advanced Drive Orin SoC, delivering 254 Tops of computing power.
Li Auto’s current models, including the Li L7, Li L8, and Li L9, feature different trim options and employ smart driving chips, such as Horizon Robotics’ Journey 5 with 128 Tops of computing power.
New Flagship Retails Centers China
Li Auto initiated the construction of flagship retail centers, following a similar concept to Nio’s Nio House. On January 14, Li Auto inaugurated flagship retail centers in Shenzhen and Guangzhou, introducing an upgraded design concept for an enhanced customer experience.
The centers aim to create a home-like atmosphere, offering spaces for families to explore products and services. Additional flagship retail centers in Beijing and Shanghai are set to be revealed later this month as part of Li Auto’s expansion plan.
Li Auto is set to broaden its sales network across China’s Tier 3 and Tier 4 cities, with plans to cover all Tier 3 cities and over 70% of Tier 4 cities by the close of 2024. The company shared images of its two flagship showrooms, resembling Nio Houses with a two-story design.
The first floor serves as a vehicle display area, while the second floor offers additional spaces, including a drinks area and rest zone. A visit to Li Auto’s Shenzhen flagship retail center revealed a setup akin to Nio House, with two floors dedicated to various functions.
LI Stock Is off to a Great Start
Earlier this month, Li Auto’s CEO aimed for challenging annual deliveries of 800,000 and monthly deliveries of 100,000 in 2024, indicating a 110% increase. An executive has now disclosed the strategy for achieving these ambitious goals.
Li Auto has a bright and potential 2024 ahead. Investors should certainly consider buying this stock and hold it for substantial gains over the long-term.
On the date of publication, Chris MacDonald 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.
