Chinese electric-vehicle maker Li Auto Inc. (NASDAQ: LI) reported solid fourth-quarter numbers Thursday, but guidance wasn’t quite as rosy.
Li wasn’t the only Chinese EV company to feel a blowback. Nio Limited (NYSE: NIO), which is due to report Monday, fell 9.7% and Xpeng Inc (NYSE: XPEV) lost 8.55% Thursday. Tesla (NASDAQ: TSLA) also gave up 8.1% in the wake of the results. Earlier this week, Texas-based Hyliion Holdings Corporation (NYSE: HYLN), which makes EV powertrains for commercial fleets, reported a loss of 13 cents a share in the fourth quarter.
Figures
The results were a little confusing, but good as Li reported $636 million in sales as revenue jumped 39%, exceeding $604 million that analysts projected in sales. The company reported a loss from operations but a positive net income. Still, the loss from operations was about $12 million which is smaller than expected. Li Auto earnings came in at 2 cents a share whereas analysts expected a loss of 4 cents on revenue of $565.5 million. The company also generated positive free cash flow. Investors like it when young companies demonstrate the ability to be self-funding by generating the cash they need to grow from their own operations.
Throughout the quarter, Li delivered 14,464 of its Li One SUV, its only vehicle in production which is technically a hybrid because it has a small gas engine to extend its range. This is 67% more than the third quarter’s 8,660 with the total for 2020 being approximately 32,624 deliveries. Its rival Nio sold 17,353 units in Q4 and 43,728 for the year, while Xpeng sold 12,964 in Q4 and 27,041 for the year. What enabled Li to deliver a bottom-line profit from an operating loss is the required accounting of securities.
Outlook
Management expects first-quarter revenue to come in the range of $450.6 million to $493.5 million. This range would represents a growth between 246% and 279% compared to previous fiscal year’s quarter. Deliveries are expected to be in the range between 10,500 and 11,500 vehicles, up 263%-297% compared to the same quarter last year but less than the fourth quarter which will make reaching analyst projections for 2021 sales projections more challenging. The company reported that January deliveries soared 356% YoY to 5,379 but that is below December 2020’s 6,126.
As the automotive industry is undergoing a once-in-a-century shift to smart EVs, the fourth quarter ended a big year for Li that grew significantly due to strong demand for its distinctive product offering and superior user experience. The government’s support for EVs also doesn’t hurt as to encourage adoption, not only are license plates guaranteed but they are also free.
The earnings provided a sigh of relief for investors as Li stock has had a rocky ride lately. As of Wednesday’s close, shares were down about 11% month to date.
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