Shares of Chinese EV maker Li Auto, Inc. (NASDAQ:LI) were up about 4% during pre-market trading today. Despite supply challenges faced by the company due to the resurgence of COVID-19 in China, the company delivered a robust delivery update for May 2022.
The company delivered 11,496 Li ONEs in May 2022, reflecting a whopping 165.9% year-over-year growth.
The company stated that there were delays in deliveries as its manufacturing base in Changzhou has not returned to normal production levels.
Since its launch in 2019, total cumulative deliveries of the Li ONE have stood at 171,467.
As of May 31, 2022, Li Auto had 233 retail stores in 108 cities, along with 253 servicing centers and Li Auto-authorized body and paint shops that operated in 214 cities.
Management’s Commentary
Li Auto’s President, Yanan Shen, commented, “Although our parts suppliers in the Yangtze Delta region have gradually resumed production, they have not yet fully recovered and we continue to encounter challenges due to parts supply shortages.”
He further added, “At present, we are actively collaborating with our supply chain partners to restore production capacity, aiming to shorten the delivery waiting time for Li ONE users, while meeting all pandemic prevention and containment requirements”.
Comparison with Peers
Let’s take a look at other Chinese electric vehicle makers’ deliveries numbers.
XPeng (NYSE: XPEV) delivered 10,125 vehicles in May, a year-over-year increase of 78%. XPeng benefited from the resumption of two-shift production in mid-May. Its factory is located near the city of Guangzhou, which fared better than the other regions during the recent pandemic outbreaks.
Meanwhile, NIO’s (NYSE: NIO) deliveries for the month of May came in at over 7,000 vehicles, up a mild 4.7% year-over-year.
Nio’s deliveries were much lower than its current production capacity as they were negatively impacted by COVID-related disruptions that limited the company’s manufacturing and vehicle deliveries.
Wall Street’s Take
Consensus among analysts is a Strong Buy based on six unanimous Buys. The average Li Auto price target of $38.33 implies 48.91% upside potential from current levels.
Concluding Thoughts
It is commendable that despite pandemic-related disruptions at its suppliers due to the lockdown situation in China, Li Auto reported upbeat deliveries for May.
While Li Auto and XPeng were not quite impacted by the lockdowns in China compared to Nio, their deliveries should recover as the situation eases in the region.
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