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Since last covering Li Auto (LI) stock, the company’s deliveries have picked up significantly, and the release of the L6 appears central to this — Li Auto delivered more than 20,000 L6 vehicles in June alone. This turnaround, coupled with attractive earnings metrics, reinforces my bullishness on Li Auto.
Li Auto Deliveries Are Back on Track
The company delivered 47,774 vehicles in June, marking a significant improvement from previous months and approaching its all-time high of 50,353 vehicles in December 2023. These figures represent a year-over-year increase of 46.66% and a month-over-month increase of 36.42% from May 2024.
These latest numbers also mean that in the second quarter, Li Auto delivered 108,581 vehicles, which is a 25.48% increase compared to the same period last year and a 35.05% increase from the first quarter of this year.
The company has attributed its sales momentum to the successful launch of new models, particularly the Li L6. In June alone, sales for the Li L6 surpassed 20,000 units, contributing significantly to the overall monthly deliveries exceeding 40,000 vehicles.
This surge has allowed Li Auto to reclaim its position as the leading brand among China’s emerging new energy vehicle (NEV) manufacturers. Additionally, Li was the top-selling Chinese NEV brand in the RMB 200,000 and higher market segment.
Li Auto L6 to the Rescue
Li Auto released the Li L6, a five-seat premium family SUV, in April, and it represented something of a strategic shift. Priced at RMB 249,800 (US$34,509) for the Pro trim and RMB 279,800 for the Max trim, the vehicle is competitively positioned to take on Tesla’s (TSLA) Model Y, undercutting the U.S. EV company by 5%.
The L6 is an extended-range electric vehicle (EREV) that offers 212km of range on a single charge and up to 1,390km when using the combustion engine to extend the battery’s range. This, coupled with the price tag, appears to have made the L6 a much-needed success story.
The launch of the L6 contrasts sharply with the earlier introduction of the Li Mega, which struggled to gain traction after its debut in March 2024. The Li Mega, an electric multi-purpose vehicle priced at RMB 559,800 (USD 77,760), failed to meet sales expectations. It was the company’s first full battery electric vehicle (BEV), and shares gained significantly in expectation of its release.
However, Li Xiang, founder and chairman of Li Auto, has acknowledged that the Mega was a strategic misstep, adding that the company had overestimated the market’s readiness and had prematurely scaled operations. He said the company was geared as if the product was in an advanced growth phase, rather than in the early validation stage. The vehicle was also widely criticized on social media for its appearance.