To The Moon

$Li Auto(LI)$ will be releasing its Q4 2024 earnings result on 21 February 2025.

LI is expected to post earnings per share of 37 cents which is significantly lower than same period one year ago.

Li Auto (LI) Last Positive Earnings Call Show A Negative 8.57% Change Since

Li Auto gave a positive earnings call on 31 Oct 2024 but the share price have seen a negative change of 8.57%. The earnings call reflects a strong performance by Li Auto in Q3, with record vehicle deliveries and financial results. Significant advancements in autonomous driving and network expansion contribute positively, though there are challenges with cost management and pricing strategies. The conservative guidance for Q4 indicates caution amidst competitive pressures.

Li Auto (LI) Cautious Guidance Suggest Challenges

During the Li Auto Q3 2024 earnings call, the company provided guidance for Q4 vehicle deliveries, expecting between 160,000 to 170,000 units, reflecting a year-over-year increase of 21.4% to 29%. For the full year, deliveries are projected to be between 502,000 and 512,000 units. Total revenues for the fourth quarter are anticipated to range from RMB 43.2 billion to RMB 45.9 billion, indicating a year-over-year increase of 3.5% to 10%. The guidance reflects the company's strategic focus on expanding its market share, particularly in the NEV segment priced above RMB 200,000. Additionally, Li Auto plans to expand its supercharging network to over 2,000 stations by the launch of its BEV models, scaling to 4,000 by the end of 2025, to support its long-term growth strategy.

Q4 vehicle deliveries expected to be between 160,000 and 170,000 units, indicating a conservative growth outlook compared to previous quarters.

We saw Li Auto announced that their deliveries as of 31 Dec 2024 had reached 499,952 vehicles.

Here Are Some Of Key Metrics To Look At For Q4 2024

Delivery Growth

Li Auto delivered over 152,000 vehicles in Q3, up 45.4% year-over-year, driving segment market share to 17.3% from 14.4% in Q2. In December, Li Auto delivered 58,513 vehicles, a 16.2% increase from the previous year. This was a new monthly record but in the fourth quarter of 2024, Li Auto delivered 158,696 vehicles, which was below their target of 160,000–170,000. 

If we compare Q4 2024 deliveries with Q3 and YoY., this indicate that there is strong growth (e.g., surpassing 100,000 units) this would indicate robust demand, especially for newer models like the Li L7/L8/L9.

I will be looking to see if Li Auto can maintained their position as a top-selling premium EV brand in China. In Q3 2024, Li Auto reached 1 million cumulative vehicle deliveries in just 58 months, the first among emerging NEV brands in China.

Financial Performance

Revenue, Gross Margin and Profitability

In Q3 2024, total revenues reached a record high of RMB 42.9 billion, up 23.6% year-over-year. Gross margin expanded to 21.5%, and non-GAAP income from operations hit an all-time high of RMB 4.4 billion.

I am expecting this to align with the Q4 delivery growth, but if we saw any discrepancies, that might signal pricing pressures or product mix shifts.

The gross margin target is anticipated at 22-23%; any improvements suggest better cost control or premium model sales. Declines could reflect competition or input costs.

Lastly we will need to see how the net income trends will show if economies of scale are offsetting R&D/operational costs. In Q3, R&D expenses decreased by 8.2% year-over-year and 14.6% quarter-over-quarter due to decreased costs for new products and technologies. Could we be seeing a further reduction?

Guidance & Strategy

2025 delivery targets (e.g., 600,000–800,000 units) and gross margin projections (aiming for 25%+ via battery cost reductions) are critical for confidence in future scalability. Updates on pure-electric vehicle launches (H2 2024) and charging infrastructure expansion.

In Q3 2024, there have been rapid advancements in autonomous driving, with significant improvements in user experience and competitive technology. I am hoping to see an update on this development.

In Q3 2024, there were 479 retail stores and 436 service centers in China, with plans to expand charging stations to over 2,000 by next year. I would be expecting Li Auto to increase this numbers.

Risks and Contextual Factors:

While we might be looking at some positive key metrics we need to understand that Li Auto faced a risk where in Q3 2024, they reported that vehicle margin relatively stable but slightly decreased due to lower average selling prices and different product mix.

Market Competition: we also need to compare with NIO, XPeng, and BYD. Li Auto’s focus on EREVs differentiates it, but pure-EV expansion risks entering a crowded segment.

Economic Conditions: understanding chinese consumer sentiment and EV subsidy policies in Q4 2024 likely influenced demand. Stimulus measures could have provided tailwinds.

Supply Chain: the challenges of battery costs and semiconductor availability in late 2024 may have impacted margins or production efficiency.

Li Auto (LI) Operational Highlights:

• Production Capacity: Progress on Beijing factory expansion (targeting 100,000 units/month by 2025) and supply chain partnerships (e.g., CATL batteries) to ensure scalability.

• Innovation: R&D investments in autonomous driving (e.g., Li AD Max 3.0) and extended-range tech could signal long-term competitiveness.

Li Auto (LI) Price Target

Based on 5 Wall Street analysts offering 12 month price targets for Li Auto in the last 3 months. The average price target is $29.72 with a high forecast of $31.00 and a low forecast of $29.00. The average price target represents a 12.32% change from the last price of $26.46.

I think investors might be trying to figure out how the sales for Li Auto will be like as China start to show signs of recovery in its economy and consumer spending might return to previous level.

Technical Analysis - Exponential Moving Average (EMA)

We have seen how the LI bulls attempt to build a daily uptrend have been going, there have been pretty consistent buying demand as seen in the RSI, as LI continued to trade above the 12-EMA and 26-EMA,

We also saw that there are period of consolidation over the last two weeks, for investors looking to get into LI, we might need to also look at the recovery of the Chinese economy and how the deliveries and registration of LI vehicles, whether there is any significant pick up.

I would hold back to buy into LI as I am looking for stronger signal of how the Chinese ADRs stocks would be recovering.

Summary

Li Auto’s Q4 results will hinge on balancing growth with profitability amid fierce competition. Strong deliveries, margin resilience, and clear guidance toward electrification and cost efficiency would reinforce its bullish narrative.

However, any signs of slowing demand or margin erosion could raise concerns. Investors should weigh these factors against broader market trends and the company’s strategic execution.

We can look at some of the pre-earnings stock trends that may reflect high expectations. Beating estimates could drive further gains; misses might trigger volatility.

Appreciate if you could share your thoughts in the comment section whether you think Li Auto would be ale to provide an earnings surprise and can it beat the revenue estimate.

@TigerStars @Daily_Discussion @Tiger_Earnings @TigerWire appreciate if you could feature this article so that fellow tiger would benefit from my investing and trading thoughts.

Disclaimer: The analysis and result presented does not recommend or suggest any investing in the said stock. This is purely for Analysis.