Li Auto (LI) is setting its sights on becoming a leading AI and robotics company by 2030, with smart electric vehicles as its first AI robots. CEO Li Xiang sees these vehicles as the foundation for integrating AI into the physical world, which shows the company’s ambitions to expand beyond the auto industry and compete with China’s tech giants. In fact, the Beijing-based automaker is heavily investing in AI by dedicating nearly half its R&D budget to the field.
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Its strategy includes developing the “Li Xiang Classmate,” which is an advanced in-car assistant that is now expanding to mobile apps. It is also creating a foundational AI model, called Mind GPT, that is designed to rival China’s top players. The firm plans to launch a mobile app for the AI assistant built on this model soon.
Li Auto Continues to Show Impressive Resilience
Interestingly, Li Auto continues to show impressive resilience in China’s competitive EV market, even with ongoing economic uncertainty, which suggests that consumers strongly trust its products. In fact, the company’s Q3 performance highlighted its strength, with revenue climbing 24% year-over-year to RMB 42.9 billion ($6.1 billion). Adjusted earnings per ADS also improved to RMB 3.63 ($0.52), up from RMB 3.29 in the same quarter last year.
Furthermore, in November, Li Auto delivered 48,740 vehicles, an 18.8% increase from the previous year, although this was down 5.25% from October. Despite this slight month-over-month dip, Li Auto’s vehicle margins remain among the highest in the industry, and the company stands out as one of the few profitable EV makers in China, unlike many of its competitors.
The strong demand for Li Auto’s products, coupled with solid execution, adds credibility to its plan of becoming an AI powerhouse in the years to come.
Is LI Stock a Good Buy?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on LI stock based on four Buys, four Holds, and zero Sells assigned in the past three months, as indicated by the graphic below. After a 29% decline in its share price over the past year, the average LI price target of $30.35 per share implies 19.8% upside potential.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
