Hybrid vehicle manufacturer Li Auto witnessed a downgrade in its price target by Citi following lower-than-expected orders for its new SUV, the L6.
Citi also anticipates Tesla’s recent price-cutting strategy in China, announced over the weekend, to impact market sentiment further.
On Monday, Citi adjusted its price target to $43.60 from $48.50, maintaining a Buy rating on Li Auto shares following the reported 10,000 orders within 72 hours, as disclosed by Li Auto on Sunday.
Citi expressed uncertainty regarding the nature of these orders, questioning whether they are refundable.
Notably, if these orders are indeed refundable, they fall slightly short of expectations, considering that previous L7/L9 refundable orders reached 21,000 and 50,000 units within the same 72-hour timeframe.
Li Auto revealed on Sunday that its newly launched SUV, the L6, garnered 10,000 orders within 72 hours of its launch event. Deliveries for Li’s latest entry model are slated to commence later this month.
Shortly after Citi’s research note, Li Auto has implemented a pricing adjustment strategy, slashing prices by approximately 5% on four of its five models.
Additionally, the company announced plans to refund owners who purchased these models earlier this year.
The price cuts, ranging between 18,000 and 30,000 yuan, apply to the L7, Li L8, Li L9, and Li MEGA models and follow the cuts announced over the last 48 hours by Tesla and BYD.
The premium five-seat family extended range SUV starts at 249,800 yuan ($34,500) for the Pro trim and at 279,800 yuan for the Max trim. Li L6 has a length of 4,925 millimeters, width of 1,960 millimeters, height of 1,735 millimeters, and wheelbase of 2,920 millimeters.
The Li L6 has a CLTC range of 1,390 kilometers and 212 kilometers in EV mode. It comes with a standard dual-motor, all-wheel drive system and can accelerate from 0 to 100 kilometers per hour in 5.4 seconds.
Other features include a panoramic sunroof, compressor-based refrigerator, and a spacious trunk with one-click electric folding and reset of the rear seats, providing flexible storage options.
In the second half of the year, Li Auto will be releasing another three pure electric SUV models with 5C charging and all-wheel drive.
In the last earnings call, in late February, Li Auto’s Executive Director and President Donghui Ma guaranteed that those models will be “very, very competitive”.
