Li Auto Inc. (LI) saw its Hong Kong-listed shares plummet approximately 14% on Monday, closing near HK$65 after a lackluster market response to the unveiling of its updated L9 flagship SUV. The stock settled at HK$64.95, down from Friday's close of HK$75.60, after touching a session low of HK$64.50, according to data from Investing.com.
The sharp decline underscores investor skepticism about the company's ability to maintain its premium positioning in China's increasingly crowded electric vehicle (EV) market. The L9 is not a routine trim update; it is Li Auto's premium family SUV and a key barometer of the brand's strength ahead of its first-quarter earnings report on May 28.
Li Auto officially launched the new L9 on May 15, with deliveries slated to begin on May 17. The extended-range EV is offered in two trims: the Ultra, priced at 459,800 yuan, and the Livis, at 509,800 yuan. The vehicle uses electric motors for propulsion but can also rely on a gasoline engine as a generator to extend range, a unique feature in the segment.
Chairman and CEO Li Xiang described the new model as a technological leap forward. "The previous L9 succeeded by precisely defining its product; the All-New Li L9 will build its moat through technology," he said during the launch event. He also outlined expansion plans into Asia and Europe as part of Li Auto's international growth strategy.
Analyst opinion on the new L9 is divided. Citi maintained a Neutral rating and a HK$72.70 target price, noting that the L9's value proposition matches competitors but does not stand out. Morgan Stanley, however, kept an Overweight rating and a HK$83 target, forecasting monthly sales that could exceed the L9's average last year. The brokerage flagged intense competition in the six-seat SUV segment, listing NIO, XPeng, and Aito's M9 as primary rivals.
The broader Chinese EV sector is under pressure from an ongoing price war. Manishi Raychaudhuri, founder of Emmer Capital Partners and former head of Asia-Pacific equity research at BNP Paribas Securities, wrote in a Reuters Open Interest piece that the price war is creating "involution losers"—companies hurt by excessive competition and weak demand.
Hong Kong's broader market also declined, with the Hang Seng Index falling 1.6% amid a down day for most Asian markets and rising oil prices. Li Auto's April delivery numbers added to growth concerns: the company delivered 34,085 vehicles last month, bringing cumulative deliveries to 1.67 million. As of April 30, Li Auto operated 511 retail stores and 4,077 supercharging stations across China.
Li Auto is scheduled to report first-quarter results on May 28 before the U.S. market opens, followed by a conference call at 8 a.m. Eastern Time (8 p.m. Beijing and Hong Kong time). The risk is two-sided: if initial L9 orders exceed broker forecasts or if management demonstrates margin stability, Monday's sell-off may prove overdone. Conversely, if the launch triggers further price cuts, Li Auto could face higher costs to move fewer high-margin vehicles as competitors leave little room for error.
