Chinese carmaker Li Auto announced on Monday that its vehicle sales crashed by nearly 41% in August.
The brand delivered 28,529 vehicles in August, down both sequentially and year over year for the third consecutive month.
The figures declined by 7.2% from the 30,731 vehicles delivered in July. Compared to the same period a year ago, deliveries plunged by 40.7% from 48,122 units.
Last week, the company founded and led by Li Xiang posted their second-quarter earnings results, posting a year over year drop of nearly 5% in automotive revenue to $4.0 billion.
By then, the Beijing-based carmaker said it expects vehicle deliveries to plunge between 37.8% and 41.1% in the third quarter.
The company now aims for third quarter deliveries to be between 90,000 and 95,000 vehicles.
Considering it delivered 30,731 units in July and 28,529 in August, Li Auto is now expecting to deliver 30,740—35,740 vehicles in September.
From April to June, Li Auto delivered 111,074 vehicles. Last year, between July and September, deliveries stood at 152,831 vehicles.
Li Auto’s US-listed shares hit a new four-month low last week, after the earnings report. It lost 7.49% in the past thirty days, despite a 20% gain over the last twelve months.
Over the last few days, JP Morgan and Goldman Sachs lowered their price targets on Li Auto’s Hong Kong-listed shares to HK$100 and HK$120, respectively.
The targets imply an upside potential of 9.1% and 30.9%, considering the previous close of HK$91.70 on Friday.
Goldman Sachs reaffirmed its Buy rating on Li Auto, while JP Morgan remained Neutral on the stock.
Macquarie reiterated an Underperform rating and HK$82 price target on the company, implying the stock will drop by 10.6%.
A month ago, the company launched its second fully electric model, the six-seat SUV Li i8. Deliveries of the model began on August 20.
Just a week after the model’s launch, Li Auto trimmed its variants from three to one, signaling weak demand.
The company discontinued the Pro and Ultra versions, leaving only the Max trim, starting 10,000 yuan below its previous price, at 339,800 yuan ($47,300).
In the following weeks, Li Auto is set to launch its third fully electric model, the Li i6 SUV, which will be priced around 250,000 to 300,000 yuan ($35,000—42,100).
The company also announced on Monday that it will release a major over-the-air (OTA) software update in September. The 8.0 update will introduce Li Auto‘s a vision-language-action model, the VLA Driver.
As of the end of August, the company had 543 retail stores and 536 service centers across China.
The company operates 3,190 supercharging stations with over 17,500 charging stalls in its domestic market.
Earlier this month, founder and chief executive officer Li Xiang said that, besides him, only Xiaomi‘s co-founder and CEO Lei Jun is capable of creating a “super product” among China’s new wave of automakers.
