Li Auto Stock Slides In Hong Kong As EV Bursts Into Flames In Shanghai — Retail Traders Question Build Quality

• Videos circulating on Chinese social media showed the Li Mega emitting sparks before being engulfed in flames within seconds, though both occupants escaped safely.
• The incident, following a fatal Xiaomi EV fire earlier this month, has reignited scrutiny of electric vehicle safety standards in China.
• UOB Kay Hian analysts maintained Li Auto among their top sells, citing regulatory pressures and tougher smart-driving rules that could weigh on smaller EV brands.

Li Auto shares fell almost 3% in Hong Kong trading on Friday after a fire involving its Li Mega electric multi-purpose vehicle (MPV) raised new safety concerns in China’s electric vehicle market, already rattled by a similar Xiaomi EV incident earlier this month.

Fire Incident In Shanghai

Videos circulating on Chinese social media showed a Li Mega emitting sparks from its chassis while stopped at a traffic light in Shanghai’s Xuhui district late on Thursday, before the vehicle became fully engulfed in flames within seconds. Both occupants managed to escape unharmed, CnEVPost reported, citing local outlet The Paper.

Li Auto confirmed that its response team and local firefighters attended the scene, adding that it would “actively cooperate with the fire department’s investigation and proceed with follow-up actions based on the findings.”

The incident marks the second high-profile EV fire in China this month. On Oct. 13, a Xiaomi SU7 caught fire after a collision in Chengdu, resulting in the driver’s death.

Li Mega Performance

The company’s battery-electric vehicle (BEV) lineup has been expanding, led by the Li Mega, its first all-electric model launched in March 2024.

The Li Mega posted record monthly deliveries of 3,277 units in September, up 150%–200% from earlier projections, accounting for about 5% of Li Auto’s total deliveries this year. The company also launched two additional BEV models, the Li i8 SUV and Li i6 sedan, in recent months and aims to scale up production by year-end.

Regulatory & Market Pressures on Li Auto

Li Auto remains under pressure as UOB Kay Hian maintained its ‘Market Weight’ rating on China’s auto sector and listed the company among its top sells. Analysts Ken Lee and Bella Lu said Europe’s demand for technology transfers from Chinese automakers, along with China’s restrictions on such transfers, has added to the sector’s geopolitical strain.

They said Beijing’s tighter smart-driving access rules are likely to improve safety and strengthen global trust in Chinese brands, benefiting established companies such as BYD, Geely, and XPeng, while weighing on struggling players including Li Auto.

Stocktwits Traders Question Li Auto’s Build Quality After Fire Video

On Stocktwits, retail sentiment for Li Auto was ‘bullish’ amid ‘normal’ message volume.

One user said that Li Auto vehicles often experience issues such as wheel or battery problems, further signaling doubts about the vehicles’ safety.

Another user expressed disbelief at how quickly the Li Mega was engulfed in flames, questioning the materials used in the vehicle and voicing concern for the occupants’ safety.

Li Auto’s U.S.-listed stock has declined 7% so far in 2025.

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