Li Auto’s ONE electric vehicle.
Courtesy Li Auto
The chief technology officer at Chinese electric-vehicle maker Li Auto could be leaving the company.
“Several local news sources…reported that Li Auto’s chief technology officer, Mr. Kai Wang, will be leaving,” wrote Morgan Stanley analyst Tim Hsiao in a Tuesday report. Wang worked at auto parts supplier Visteon (ticker: VC) before joining Li Auto (LI). Hsiao called the move unexpected, pointing out Wang was leading the development of Li’s autonomous-driving features.
CTO is a key position at car companies these days. Management movement might show that competition for top executives is heating up.
Li didn’t immediately respond to a request for comment about the departure or who would fill the post if a new technology officer is needed.
Self-driving features are becoming a product differentiator for car companies. Most notably, Tesla (TSLA) CEO Elon Musk believes developing self-driving capabilities can unlock a lot of value for car companies and car owners, turning cars that once sat in driveways into money-making assets.
“Cars in the fleet essentially becoming self-driving via a software update, I think, might end up being the biggest increase in asset value of any asset class in history,” Musk said on Tesla’s fourth-quarter earnings conference call. “It would also have a profound impact on improving safety and on accelerating the world towards sustainable energy through vastly better asset utilization.”
Hsiao isn’t too worried about the move. He still rates Li shares Buy and has a $49 price target on the stock, up more than 60% from recent levels. Still, cars are getting smarter, making CTO movement a watch item for any auto investor.
“It takes frequent iteration to keep smart EVs’ functions up to date. Car makers also need to evolve at a much faster pace nowadays,” wrote Hsiao, adding that acquiring top talent will be critical for any auto maker looking to prepare its business for an electric and self-driving world. “On the bright side, we think startups, like Li Auto, may well be better positioned vs. traditional peers when attracting tech talent for software, algorithms, etc.”
Investors don’t seem too alarmed by the potential change. Li’s U.S.-traded shares were down 1.3%, at $29.80, in recent trading. The S&P 500 and Dow Jones Industrial Average were both down 0.7%.
Li stock, along with many other EV stocks, are reacting to news inflation and the Russia-Ukraine conflict. Li stock rose 6% Tuesday as the Nasdaq Composite jumped 2.5%, snapping a three-day losing streak.
Write to Al Root at [email protected]
