By Michael Elkins
Li Auto (HK:2015) (NASDAQ:LI) announced during its 4Q earnings release that the company had delivered 46,319 vehicles in the quarter, up 74.6% QoQ and 31.5% YoY. Li Auto indicated that its L7 model is enjoying an exceptionally high conversion rate to pre-orders, especially after test drive. Morgan Stanley analysts believe that with a good backlog, Li’s L7 could constitute up to half of total deliveries in 2Q after L7 Air deliveries ramp up.
They wrote in a note, “Specs-wise, one third of L7 buyers have opted for the high-end max versions so far vs. around 20% of L8 buyers, with the pro versions remaining the sales mainstay. Looking ahead, Li Auto plans to maintain their 3-tiered Air/Pro/Max model strategy to capture customer demand at every price point.”
During the 4Q conference, management guided to Q1 total revenue of RMB 17.45 billion - RMB 18.45 billion (RMB 1 = $0.1457) and sales volume of 52–55k units for Q1 — implying average monthly delivery of 18.4-19.9k for February and March. The company will start to deliver two trims of L7 (Pro & Max), the new five-seat SUV flagship in early March, and the Air version of L7 and L8 in early April.
Bernstein analysts wrote in a note, “Our channel checks indicated that initial customer feedback for L7 is positive. Li Auto is set to unveil a BEV in H2 2023. We expect the strong product cycle to support sales performance, help Li Auto further penetrate the family SUV segment and drive revenue growth.”
Shares of LI are up 4.07% in pre-market trading on Wednesday.