Continuing their impressive form this year, shares of Chinese electric vehicle (EV) startup Li Auto (NASDAQ:LI) gained conspicuously on Tuesday. Earlier this morning, management announced that the company delivered 34,134 vehicles last month. This impressive haul represented an increase of 227.5% on a year-over-year (YOY) basis. As a result, LI stock gained about 3.5% in the early afternoon session.
According to the EV specialist’s press release, the deliveries surpassed the 30,000 unit mark for the second consecutive month. Cumulatively to the end of July, the metric reached 173,251 vehicles. Even better, Li managed to best compatriot rivals Xpeng (NYSE:XPEV) and Nio (NYSE:NIO), which also posted vehicle delivery figures for last month.
Based on information provided by CNBC, Xpeng delivered 11,008 vehicles, representing a lift of 28% on the month. Moreover, it’s Xpeng’s highest monthly delivery number for the year so far. Notably, the result follows the company commencing deliveries of its latest car, the G6 Ultra Smart Coupe SUV, in July.
For Nio, its deliveries reached 20,462 units, up 103.6% YOY. The figure also nearly doubled the June tally of 10,707 vehicles. A refresh of its ES6 SUV launched in May helped boost sentiment.
Nevertheless, LI stock came out the clear winner. Subsequently, XPEV and NIO suffered losses of approximately 3% and 2%, respectively.
LI Stock Continues Rewarding Shareholders
Naturally, sentiment for LI stock ran hot, given that Li Auto appears to be the frontrunner in the Chinese EV market. According to Daxue Consulting, this regional industry is poised for significant growth. Already, the sector is on pace to print revenue of $292.1 billion this year. From 2023 to 2028, the sector should experience a compound annual growth rate (CAGR) of 6.38%.
Further, management took the opportunity to highlight its achievements. “As a preferred premium automotive brand for Chinese families, we successfully delivered our 400,000th vehicle in July, becoming the first emerging [new energy vehicle] manufacturer in China to achieve this milestone,” remarked Li Auto Chairman and CEO Xiang Li.
Since the beginning of this year, LI stock gained an impressive 110%. To be fair, the competition also prints robust figures. For example, XPEV gained 98% for the year, while NIO moved up about 55% during the same frame. Still, for the latter two, Tuesday’s underperformance could represent a temporary inflection point.
For context, CNBC reports that the Chinese government announced measures to lift the economy in several areas, including support for the auto space. In particular, the administration seeks increased car ownership for new energy vehicles.
However, China has experienced slower-than-expected economic growth. Nevertheless, this backdrop also makes LI stock comparatively distinguished.
Why It Matters
Currently, Wall Street analysts peg LI stock as a consensus strong buy. This assessment breaks down as seven “buys,” one “hold” and zero “sell” ratings. However, the average price target now lands at $40.66, which represents approximately 8% downside risk.
On the date of publication, Josh Enomoto did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
