Li Auto Inc. LI, a leading Chinese competitor to Tesla, Inc. TSLA in the electric vehicle (EV) market, is aiming to reposition itself as an artificial intelligence (AI) company with ambitions to eventually produce humanoid robots, per Li Xiang, Li’s founder and CEO. This strategic shift aligns with China's broader focus on robotics innovation to drive economic growth amid rapid AI advancements.
Per Li, AI is central to Li Auto’s future. The company is striving for its foundational AI model to rank among China’s top three in the coming years, competing with major tech firms beyond the automotive sector. As part of this vision, Li Auto will soon introduce a mobile app for its AI assistant, Lixiang Tongxue, powered by its proprietary foundational model, Mind GPT. Per SuperClue rankings, China’s top four foundational AI models are currently being developed by ZhipuAI, SenseTime, Oppo and Alibaba Group. However, Mind GPT has yet to secure a position among the more than 40 models listed.
Li Auto’s investment in AI comes as advancements in technologies like large language models (LLMs) — the backbone of tools like OpenAI’s ChatGPT— gain momentum. Simultaneously, local governments in China are implementing policies to accelerate robotics innovation. Similar to Tesla’s work on Optimus robots, Li Auto plans to develop humanoid robots, but only after achieving level-4 autonomous driving capabilities. Level-4 autonomy refers to vehicles capable of handling most driving tasks independently, though human intervention may still be needed in certain scenarios. Per Li, the company expects to reach this milestone within three years.
This robotics venture will place Li Auto in competition with numerous Chinese tech companies striving to mass-produce AI-powered machines. At the 2024 World Robot Conference in Beijing, more than two dozen humanoid robots were unveiled by various firms. Since September 2022, Li Auto has treated AI, including autonomous driving technology, as a strategic priority, dedicating more than half of its 10 billion yuan R&D budget this year to AI development to attract top talent.
In the broader robotics industry, Chinese companies have already deployed humanoid robots in automobile manufacturing. For instance, UBTech Robotics’ Walker S robot has been used on assembly lines at Nio's factories, while Zeekr began using the Walker S Lite at one of its facilities in July.
Li Auto’s Zacks Rank & Key Picks
LI currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the auto space are Dorman Products, Inc. DORM and Blue Bird Corporation BLBD, each sporting a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for DORM’s 2024 sales and earnings suggests year-over-year growth of 3.66% and 51.98%, respectively. EPS estimates for 2024 and 2025 have improved 75 cents and 88 cents, respectively, in the past 60 days.
The Zacks Consensus Estimate for BLBD’s fiscal 2025 sales and earnings indicates year-over-year growth of 10.97% and 12.14%, respectively. EPS estimates for fiscal 2025 have improved 18 cents in the past 30 days.
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