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Li Auto
has the distinction of being one of the only consistently profitable pure-play electric vehicle makers on the planet, along with
Tesla
and
BYD.
It also operates in China, the world’s largest market for battery electric vehicles. That’s why its coming earnings report is such a big deal.
Li Auto (ticker: LI) is slated to release third-quarter results Thursday morning. Wall Street is looking for earnings per share of about 20 cents from sales of $4.6 billion, according to FactSet. A year ago in the third quarter of 2022, Li reported a per-share loss of 5 cents from sales of $1.3 billion.
Sales have grown dramatically as Li has expanded its production and product lineup. Li has achieved the scale required to make money selling cars: The company shipped more than 105,000 units in the third quarter, up from about 27,000 a year ago.
Tesla (TSLA) didn’t produce consistent profits until it was shipping roughly 100,000 cars a quarter.
Li typically provides a quarterly sales outlook with its results. Projected sales in the 110,000 to 120,000 range should be enough for shareholders. Anything less than that, and investors will have more questions about the condition of the Chinese EV market.
In the second-quarter earnings release, Li guided to 100,000 to 103,000 deliveries for the third quarter. It ended up doing a little better than that.
Chinese BEV sales, including exports, rose about 10% year over year in the third quarter. That’s slower growth than in recent quarters; BEV sales grew 40% in the second quarter.
Slowing growth and weak stock prices are what have investors hoping for a solid report. Through Wednesday trading, Li stock has fallen about 8% over the past three months, despite rising deliveries. The
S&P 500
and
Nasdaq Composite
were both down less than 2% over the same span.
Shares of Tesla and BYD (1211.Hong Kong), the other profitable EV makers, were off about 11% and 5%, respectively, over that period.
Write to Al Root at [email protected]
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