Li Auto recorded its first-ever annual net profit just a week ago, revealing that it delivered almost three times more vehicles last year compared to 2022. Yet despite the improved results, the company warned investors on its earnings call that the first quarter of 2024 would not be as rosy.
Recent data released by the company supports that pessimistic outlook. Li Auto delivered 20,251 vehicles in February, 35% fewer than what it delivered in January, and less than half what it delivered in December 2023. Fellow Chinese EV startups Xpeng and Nio also reported month-on-month declines in deliveries.
U.S. carmaker Tesla sold 39,881 vehicles in China in January, down 47% from the preceding month, according to data from the China Passenger Car Association.
China’s consumers have flocked to EVs in recent years, helping to grow an industry that seems poised for global expansion. But the breakneck pace of growth is showing signs of slowing down, as consumer sentiment remains shaky.
Will you buy a EV with a fridge?
Li Auto’s answer to slowing sales is its first fully-electric minivan, dubbed the Li Mega, which the company unveiled on Friday. The Beijing-based automaker is pricing the minivan at 559,800 yuan ($77,800), and is targeting wealthy families for its new “mobile home.”
“We believe Li Mega will be our next hit product,” said Li Xiang, the co-founder and CEO of Li Auto, said at the launch event in Shanghai according to the South China Morning Post. Deliveries are expected to begin this month.
The Mega features a built-in fridge, sofa, and platinum, keeping with the “mobile home” theme. Li Auto is also touting a new Qilin 5C battery, jointly developed with CATL, that can achieve a driving range of 500 kilometers after just 12 minutes charging in a Li Auto super charging stall. The company says it’s planning to invest at least 6 billion yuan ($833 million) to establish over 5,000 self-operated 5C charging stations, though did not give details on an investment timeline.
The multipurpose vehicle market is seen as a niche market in China, due to targeting wealthy families with more than one child. Chinese consumers purchased 1.1 million MPVs—electric and non-electric—last year, out of a total 21.7 million passenger cars sold.
Investors on Monday did not seem to be convinced by Li Auto’s new minivan. Shares fell over 10% in Hong Kong trading on Monday. “Investors’ feedback on the MEGA launch event are polarized in terms of pricing and interior design,” CCB International analyst Ke Qu told the Wall Street Journal.
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