Li Auto, Xpeng Stocks: Why Retail Is 'Extremely Bullish' On These Chinese EV-Makers

Shares of Chinese electric vehicle (EV) makers Li Auto (LI) and Xpeng Inc. (XPEV) jumped on Tuesday, and continued their momentum in pre-market trading on Wednesday.

Retail sentiment for both stocks turned ‘extremely bullish’ on Stocktwits, bolstered by high message volumes. Both companies reported positive developments that have caught the market’s attention.

Li Auto’s Strong Earnings and Outlook

Li Auto reported a 10.6% year-over-year revenue growth for Q2, reaching $4.36 billion, slightly below Wall Street expectations. However, its earnings per share (EPS) of $0.20 beat the consensus estimate of $0.19. Vehicle sales increased by 8.4% to $4.2 billion, with total vehicle deliveries rising by 25.5% year-over-year to 108,581 units.

Chairman and CEO Xiang Li highlighted a significant milestone: “In June 2024, we surpassed the 800,000-vehicle milestone in cumulative deliveries, making history for Chinese premium automotive brands.”

Looking ahead, Li Auto projects Q3 revenue between $5.4 billion and $5.8 billion, representing a 13.7% to 21.6% year-over-year growth, with expected vehicle deliveries of 145,000 to 155,000 units—an increase of 38.0% to 47.5% year-over-year.

The positive outlook has energized retail investors. One Stocktwits user said the next catalyst to look forward to would be weekly registration numbers in September and October.

Xpeng’s Mass-Market Model Sparks Excitement

Xpeng has caught the eye of investors with the launch of its new mass-market brand, Mona, which aims to rival Tesla’s Model 3. 

The Mona M03 electric coupe will be priced as low as 119,800 yuan ($16,812), significantly undercutting Tesla’s Model 3, which starts at 231,900 yuan in China.

The model offers a driving range of 515 kilometers (320 miles) and includes parking assist features.

Xpeng’s new model has already seen tremendous demand, with orders exceeding 10,000 within just 52 minutes of its launch in Beijing.

Although CEO He Xiaopeng did not provide an exact launch date for the standard version, the company had previously indicated that mass deliveries would begin soon after the announcement.

One bullish user on Stocktwits was enthused by the magnitude of orders “for a company that is selling 10k in a month.”

Xpeng also announced plans to establish a manufacturing site in Europe to mitigate the impact of import tariffs.