Why Li Auto stock is up nearly 12% today

It’s not every day that an electric vehicle (EV) manufacturer reports a record number of quarterly deliveries. On Tuesday, that’s what happened to not one, not two, but three Chinese electric vehicle manufacturers.

Of the three, investors seemed the most impressed Li Auto (LI 11.50%) accomplishing that feat. Those people pushed the US-listed company’s shares up 12% in value over the course of the day. This performance contrasted sharply with the nearly 1% decline a S&P 500 index.

Year-over-year increases of almost 50%

Li Auto has announced its latest monthly and quarterly delivery figures. For September, that number was 53,709, which was a strong 49% year-over-year improvement. That helped push the company’s third-quarter numbers to a total of 152,831, moving to 45% growth over the same period in 2023.

The company attributed this undeniably impressive growth to the enthusiastic uptake of electric vehicles by Chinese consumers. It failed to mention that top-down government initiatives to support the EV sector are also having a strong influence.

Li Auto quoted CEO Xiang Li as saying, “With the penetration rate of new energy vehicles exceeding 50%, the dominance of top brands has become more pronounced. As of the beginning of the third quarter, the top three brands have captured more than 50 percent of the new energy vehicle market of 200,000 yuan ($28,507) and above.” (“New Energy Vehicle” is the common Chinese term for EV.)

A rising tide…

Encouraging delivery figures published on the same day by Li Auto’s peers, incl BYD and NopeI support the company’s argument. Strong demand from Chinese consumers for electric vehicles in every category is really pushing the domestic industry forward. This is sure to be exacerbated by the government’s latest economic stimulus package announced last month.