Electric vehicle stocks have been particularly volatile in the past few months, but investor sentiment appears to be improving after solid earnings reports from some well-known EV companies.
China Li car (NASDAQ: LI) reported first quarter results on Wednesday and the stock rose despite Wall Street’s forecast for final results.
As of 12:50 p.m. EST, stocks rose 13%.
How Li Auto fared in the first quarter
Total revenue for the first quarter was $ 545.7 million, beating consensus estimate of $ 522.5 million in revenue. This resulted in an adjusted net loss per American Depository Share (ADS) of $ 0.03, which was slightly worse than the analysts expected adjusted loss of $ 0.02 per ADS.
Vehicle deliveries previously announced by Li Auto totaled 12,579 in the first quarter. At the end of April, the company had 73 retail stores and 143 service centers. Li Auto currently only makes one vehicle, the Li Xiang One SUV (the Li One).
Yesterday, Li Auto unveiled a new 2021 model of the Li One that offers a greater range (up to 1,080 kilometers) and more active safety features, as well as an improved advanced driver assistance system (ADAS) with semi-autonomous level 2 functionality. The 2021 Li ONE also has more legroom in the third row.
The company ended the quarter with $ 4.6 billion in cash on its balance sheet and raised an additional $ 862.5 million in cash in April by issuing convertible senior notes maturing in 2028. Li Auto plans to use this money to fund R&D and other general corporate purposes such as working capital.
Slowly overcome the chip shortage
Speaking on the conference call with analysts, Managing Director Kevin Shen admitted that Li Auto is suffering from chip bottlenecks that are causing a component bottleneck, similar to comparable EV companies in China. The production capacity at Li Auto’s plant in Changzhou is currently 500 units per day. However, the current challenges in the supply chain are preventing the company from reaching this production volume.
However, conditions should improve in the coming months, and Shen expects monthly production to rise to 10,000 by September. This monthly production rate is significantly higher than the 5,539 vehicles that Li Auto delivered in April.
Forecasts for the second quarter are for revenue of between $ 609 and $ 651.7 million, which is less than what Wall Street currently expects of $ 704.5 million. Vehicle deliveries are expected to be between 14,500 and 15,500.
While the outlook has been a bit bleak, investors appear to be impressed with the Li One 2021, as well as the upcoming ramp-up to production later this year. Management is confident that the updated model will support demand.
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