Li Auto Stock Forecast: Will Li Auto overtake Nio in 2022?


Li Auto Stock (NASDAQ:LI) has become a Wallstreet favourite after doubling returns for investors since its initial offering. Alongside its domestic competition, Li Auto has exceeded investor expectations delivering 76,404 Li ONE vehicles since January this year.

In fact, Li Auto has now outpaced Nio in monthly deliveries, delivering over 13,000 vehicles in November alone. So what it driving the companies success in the Chinese market and will Li Auto overtake Nio as Wallstreet’s favourite Chinese EV play? In this article, we will dive into the Li Auto Stock Forecast as we move into 2022 and beyond.

Li Auto Stock Forecast: The Chinese EV market is booming

The Electric Vehicle industry has become one of the most exciting technological developments in modern times. Lead by Elon Musk’s Tesla, EV’s are becoming a staple vehicle in modern society, expected to takeover the petroleum and diesel motor over the next decade.

As one of the world’s largest nations, China are driving EV change through nation wide adoption and are in the race to dominate the industry. Companies such as Li Auto are positioned to benefit from this growth, with vehicles already on the roads today.

In our NIO Stock Forecast analysis, we highlighted that Citi Analyst Jeff Chung forecasts new energy vehicles sales in China to grow to 7.84 Million units by 2025. Chung sees the EV mega-trend in China accelerating EV deliveries for its domestic manufacturers such as Li Auto. More recently, the analyst noted that Li Auto in particular, will gain market share in 2022 and 2023 and outperform in the race for autonomous driving technology.

Wallstreet Remains Bullish On The Li Auto Stock Forecast

Despite the wider tech market sell off, Wallstreet remains upbeat on Li Auto stock. The 12 month price targets from larger institutions include coverage from Bank of America, Morgan Stanley, Goldman Sachs and Deutsche Bank.

Across the board of twelve Wallstreet analysts, the average Li Auto stock price target is $42 a share. The average target implies a 40% upside on Wallstreet’s Li Auto Stock Forecast.

In late October, Bernstein analyst Eunice Lee set Li Auto’s price target to $43, on par with the average target. The analyst noted that “EVs are the future of the Chinese autos landscape” and that Li Auto remains a strong competitor with its EREV technology over the medium to long term.

The analyst highlighted an important point regarding Li Auto’s scheduled battery EV launch in 2023, adding to the companies comprehensive suite of powertrain offerings.

Li Auto expected to beat revenue forecasts in Q4

After another strong month of deliveries, Li Auto expects to generate between $1.37 Billion to $1.46 Billion in the fourth quarter, beating Wallstreet’s consensus by 8.1%. For the annual year, Wallstreet expects Li Auto to turn over $3.91 Billion USD, a 168% increase year-on-year.

Looking into 2022, analyst forecasts suggest Li Auto could almost double its 2021 revenue to $6.52 Billion USD. Triple figure revenue growth over the next 12-18 months suggests Li Auto is here to stay and will continue to dominate the Chinese EV market, especially the SUV sub-market.

Li Auto’s first vehicle, the Li ONE, is a six-seat large premium electric SUV equipped with a range extension system and advanced smart vehicle solutions. The 2021 Li ONE was released in May 2021 and has gained significant marketshare in China. At this stage, the Li ONE model is the companies primary driver in revenues however the company plans on launching new models in the future.

“On the heels of the successful 2021 Li ONE launch in May, we delivered strong results in the third quarter, achieving revenue growth of 209.7% year over year, a robust vehicle margin of 21.1%, and operating cash flow at a historical high of RMB2.17 billion”.

added Mr. Tie Li, Li Auto’s chief financial officer.
Li Auto stock forecast

Li Auto Stock Forecast: The Bottom Line

Overall, Li Auto alongside its competitors Nio and XPeng, offer exposure to the vastly growing EV industry in China. Furthermore, the sentiment from analysts remains bullish, especially considering the current upside implied on Wallstreet valuations.

In addition, the substantial growth in deliveries is another positive sign that the business is gaining market share in China. However, recent volatility in the EV market is something that will likely continue to influence Li Auto stock as relations between the US and China weaken.

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The content above is strictly for informational purposes only and is not financial advice nor does it constitute a recommendation. Youth Investment Group has no liability for personal financial interests or investment decisions. You should make your own investment decisions based upon your own research and what you believe is best for you. 

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