Li Auto Inc.’s first-quarter vehicle sales fell short of analyst estimates as deliveries of its first pure electric car missed its own targets.
The Chinese automaker reported vehicle sales of 24.25 billion yuan ($3.4 billion) for the three months ended March 31, marking a 32% year-on-year increase. However, this was below the 26.71 billion yuan that analysts had anticipated.
Li Auto’s first-quarter net income amounted to 1.3 billion yuan, as stated by the Beijing-based company on Monday. This also fell short of analyst expectations, which were for a 1.6 billion yuan profit.
During the last quarter, Li Auto delivered 80,400 vehicles, including the initial shipments of its first battery-electric model, the seven-seat MEGA van.
Tepid demand for the van, which starts at 559,800 yuan, led Li Auto to reduce its quarterly delivery target to between 76,000 and 78,000 vehicles from an earlier goal of 100,000 to 130,000 units. Prior to the MEGA’s release, Li Auto’s lineup consisted of extended-range EVs with a gasoline motor to charge the batteries.
The automaker’s first-quarter gross margin was 20.6%, roughly consistent with the figure from 12 months ago. On Monday, the company also revised its second-quarter revenue forecast to between 29.9 billion yuan and 31.4 billion yuan, significantly lower than the 38.6 billion yuan analysts had projected.
Second-quarter vehicle deliveries are now expected to be between 105,000 and 110,000 units, compared to the market expectation of approximately 130,692 units.
In addition to the underwhelming sales of its new van, Li Auto is contending with heightened competition from new entrants in China’s EV market, such as Huawei Technologies Co. and Xiaomi Corp., as well as a fierce price war among automakers striving to maintain market share amid market slowdown.
Local media reported earlier this month that Li Auto has begun job cuts affecting almost 20% of its workforce — potentially over 5,000 employees — primarily in sales, human resources, and assisted driving. These reported staff reductions follow rival Nio Inc., which cut 10% of its workforce last year.
Li Auto’s US-listed shares have declined by 33.5% so far this year.
