Li Auto, a prominent player in the electric vehicle (EV) market, has delivered a strong second-quarter report despite facing intense competition and shrinking margins. The company, along with BYD, remains one of the few profitable Chinese EV makers, defying the price war initiated by Tesla.
In July, Li Auto reclaimed its top spot in Chinese new energy SUV sales, surpassing Tesla in unit sales. This achievement comes despite the price war impacting the company’s margins, which declined to 19.5% from 21.8% in the previous year.
BYD, the world’s largest EV manufacturer, also reported impressive second-quarter earnings, reaching 9.1 billion yuan (approximately $1.28 billion). This represents almost double the earnings from the previous quarter and a 32.8% increase compared to the same period last year. BYD delivered a record 986,720 pure electric and plug-in hybrid cars globally during the quarter.
Li Auto’s second-quarter highlights include a 25.5% year-over-year growth in vehicle deliveries. However, net income declined by 52.3% to 1.10 billion yuan ($154.4 million) due to the price war’s impact on margins. Despite this, sales grew by 10% year-over-year, reaching $4.4 billion, surpassing Wall Street’s estimate of $4.31 billion.
Li Auto remains optimistic about the future, with strong guidance for the third quarter. The company expects deliveries between 45,000 and 155,000 vehicles, representing a year-over-year increase of 38.0% to 47.5%. Sales are projected to fall between $5.4 billion and $5.8 billion, marking a 13.7% to 21.6% growth from the previous year.
Despite the challenges posed by BYD, Tesla, and other competitors, Li Auto has demonstrated resilience and strategic maneuvering to maintain its position in the competitive EV market. The company is focused on the higher-end NEV (New Energy Vehicle) segment, showcasing its commitment to sustainable growth.
Li Auto’s second-quarter earnings call highlights the company’s ability to navigate the competitive EV landscape effectively. While facing pressure from industry giants like BYD and Tesla, Li Auto has maintained profitability and continues to strive for leadership in the premium EV segment. The company’s commitment to innovation and strategic growth positions it for continued success in the evolving electric vehicle market.
