Li Auto Inc. Updates First Quarter Delivery Outlook
Li Auto Inc. revises its delivery outlook for the first quarter of 2024 due to lower-than-expected order intake, expecting between 76,000 and 78,000 vehicle deliveries, down from the previous estimate of 100,000 to 103,000 vehicles. The company addresses operational issues with Li MEGA and emphasizes refocusing on user value and operating efficiency.
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Lowered vehicle delivery outlook for the first quarter of 2024 due to lower-than-expected order intake, impacting revenue potential.
Operational issues with Li MEGA and misalignment with scaling phase, requiring recalibration to focus on core user groups and target cities.
Excessive emphasis on sales volume and competition leading to distraction from creating value for users and driving operating efficiency.
Li Auto's revised delivery outlook represents a significant deviation from initial projections, indicating a potential overestimation in demand or production capabilities. A decrease of approximately 22-25% in expected deliveries could signal a cooling in the new energy vehicle market or company-specific operational challenges. This news can affect investor sentiment as it reflects on the company's ability to forecast and meet market demand. It's essential to monitor how this adjustment correlates with broader market trends, such as consumer spending shifts or regulatory changes impacting the electric vehicle sector.
The downward revision in delivery forecasts may have implications for Li Auto's revenue and profitability in the short term. Investors should anticipate potential adjustments in the company's financial guidance, including revenue, margins and earnings per share. Moreover, it's important to evaluate the company's inventory levels and capital expenditure plans in light of the revised delivery numbers. A mismatch between production and sales can lead to increased inventory holding costs or necessitate production scale-backs, affecting operational efficiency and cash flow.
The acknowledgment of strategic missteps by Li Auto's CEO suggests a need for recalibration of the company's business model. The focus on the '0-to-1' phase implies a return to the fundamentals of product-market fit and value proposition. This pivot back to core user groups and stronger markets is a strategic move to stabilize the business before pursuing aggressive expansion. It is important to analyze how this strategic shift will impact Li Auto's long-term growth trajectory and its competitive position within the Chinese new energy vehicle market.
03/21/2024 - 04:30 AM
BEIJING, China, March 21, 2024 (GLOBE NEWSWIRE) -- Li Auto Inc. (“Li Auto” or the “Company”) (Nasdaq: LI; HKEX: 2015), a leader in China’s new energy vehicle market, today provided an updated delivery outlook for the first quarter of 2024. Due to lower-than-expected order intake, the Company now expects its vehicle deliveries for the first quarter of 2024 to be between 76,000 and 78,000 vehicles, revised from the previous vehicle delivery outlook of between 100,000 and 103,000 vehicles.
“I want to reflect on a couple of the key issues that we faced in March and provide some insights and solutions.
“First, we want to acknowledge that the operating strategy of Li MEGA was mis-paced. We planned operations of Li MEGA as if the model had already entered the 1-to-10 scaling phase, while in fact, we were still in the nascent 0-to-1 business validation period. Similar to Li ONE and our EREV technologies, Li MEGA and our BEV technologies will also need to undergo this 0-to-1 validation process. Next, we will first focus on our core user group and target cities with stronger purchasing power, recalibrating the Li MEGA strategy back to the 0-to-1 phase. After that, we will expand our reach to a broader user base and more cities.
“Second, we put excessive emphasis on sales volume and competition, distracting us from what we excel at — creating value for our users and driving operating efficiency. We will lower our delivery expectations and restore sustainable growth by refocusing on enhancing user value instead of competition, while maintaining operating efficiency,” commented Xiang Li, chairman and chief executive officer of Li Auto.
About Li Auto Inc.
Li Auto Inc. is a leader in China’s new energy vehicle market. The Company designs, develops, manufactures, and sells premium smart electric vehicles. Its mission is: Create a Mobile Home, Create Happiness (创造移动的家, 创造幸福的家). Through innovations in product, technology, and business model, the Company provides families with safe, convenient, and comfortable products and services. Li Auto is a pioneer to successfully commercialize extended-range electric vehicles in China. The Company started volume production in November 2019. Its current model lineup includes Li MEGA, a high-tech flagship family MPV, Li L9, a six-seat flagship family SUV, and Li L8, a six-seat premium family SUV, as well as Li L7, a five-seat flagship family SUV. The Company leverages technology to create value for its users. It concentrates its in-house development efforts on its proprietary range extension system, next-generation electric vehicle technology, and smart vehicle solutions while expanding its product line by developing new BEVs and EREVs to target a broader user base.
For more information, please visit: https://ir.lixiang.com .
Safe Harbor Statement
This press release contains statements that may constitute “forward-looking” statements pursuant to the “safe harbor” provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as “will,” “expects,” “anticipates,” “aims,” “future,” “intends,” “plans,” “believes,” “estimates,” “targets,” “likely to,” “challenges,” and similar statements. Li Auto may also make written or oral forward-looking statements in its periodic reports to the U.S. Securities and Exchange Commission (the “SEC”) and The Stock Exchange of Hong Kong Limited (the “HKEX”), in its annual report to shareholders, in press releases and other written materials, and in oral statements made by its officers, directors, or employees to third parties. Statements that are not historical facts, including statements about Li Auto’s beliefs, plans, and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties. A number of factors could cause actual results to differ materially from those contained in any forward-looking statement, including but not limited to the following: Li Auto’s strategies, future business development, and financial condition and results of operations; Li Auto’s limited operating history; risks associated with extended-range electric vehicles and high-power charging battery electric vehicles; Li Auto’s ability to develop, manufacture, and deliver vehicles of high quality and appeal to customers; Li Auto’s ability to generate positive cash flow and profits; product defects or any other failure of vehicles to perform as expected; Li Auto’s ability to compete successfully; Li Auto’s ability to build its brand and withstand negative publicity; cancellation of orders for Li Auto’s vehicles; Li Auto’s ability to develop new vehicles; and changes in consumer demand and government incentives, subsidies, or other favorable government policies. Further information regarding these and other risks is included in Li Auto’s filings with the SEC and the HKEX. All information provided in this press release is as of the date of this press release, and Li Auto does not undertake any obligation to update any forward-looking statement, except as required under applicable law.
For investor and media inquiries, please contact:
Li Auto Inc.
Piacente Financial Communications
What is Li Auto's revised vehicle delivery outlook for the first quarter of 2024?
Li Auto now expects between 76,000 and 78,000 vehicle deliveries, down from the previous estimate of 100,000 to 103,000 vehicles.
Who is the chairman and CEO of Li Auto?
Xiang Li is the chairman and chief executive officer of Li Auto.
What issues did Li Auto face in March according to the press release?
Li Auto faced operational issues with Li MEGA and excessive emphasis on sales volume and competition in March.
How does Li Auto plan to address the operational issues with Li MEGA?
Li Auto plans to recalibrate the Li MEGA strategy back to the 0-to-1 phase, focusing on core user groups and target cities with stronger purchasing power.
