Beijing-based Li Auto Inc missed profit estimates despite a recovery in sales as price cuts across the product lineup of the automaker put pressure on
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Beijing-based Li Auto Inc.’s profit missed analysts’ forecasts despite a recovery in sales as price cuts across the automaker’s product lineup put pressure on earnings.
The manufacturer of both extended-range electric vehicles and pure electric cars posted net income of 1.1 billion yuan ($154.4 million) in the three months through June, according to a company filing Wednesday, missing the 1.82 billion yuan average estimate according to a Bloomberg survey. It marks an decrease of 52.3 per cent from the same period a year ago.
Total revenue climbed 10.6 per cent year on year to 31.7 billion yuan, broadly in line with market expectations, as the carmaker delivered 108,581 vehicles in the the period, Li Auto said. The company had previously forecast sales of between 105,000 and 110,000 units.
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It now looks to deliver up to 155,000 vehicles in the three months through September, ahead of analyst estimates of around 137,725 units. Revenue is projected to jump to as much as 42. 2 billion yuan, the company said, while the market estimate is about 39.7 billion yuan.
Li Auto’s L-Series of extended range EVs was the main contributor to sales growth. The L6, the brand’s smallest and cheapest sport utility model, has proven to be popular with customers since it launched in April, selling over 20,000 units in both June and July.
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The company expects both margins and cash flow to improve in the second half of the year as production of the Li L6 stabilises and cost-reduction and efficiency measures come into effect, Li Auto’s chief financial officer Li Tie said in the statement. “We are committed to investing in technological and product advancements to drive steady business growth, while simultaneously optimising our cost structure.”
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However, the company’s first pure-electric multi-purpose vehicle, with prices starting at over 500,000 yuan, has largely flopped since its unveiling in March, pushing the company to reduce the model’s sales target and “focus on core users.”
The company is pushing for a strong sales push over the rest of the year, as it only managed to sell roughly 30 per cent of its annual target of 800,000 units over the first seven months of 2024. Local media have reported Li Auto has adjusted down its annual target internally due to its lackluster performance. The company also marked down retail prices of all its products in April in the face of strong headwinds from the muted domestic economy and heated competition.
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First Published Date: 02 Sep 2024, 07:05 AM IST