7 hours ago
Bernstein lowers rating on Li Auto, says EV maker will see a 'bumpier road ahead'
Li Auto could have a hard time finding growth from here, according to Bernstein. The firm downgraded the Chinese electric vehicle stock to market perform from outperform on Tuesday, and trimmed its price target to $26 per share from $33. Bernstein's forecast calls for 8% upside from Monday's $24.05 close. Analyst Euince Lee said that she expects a "bumpier road ahead" for the company due to increasing competition and a difficult outlook. LI YTD mountain LI Auto stock in 2025. "Despite Li Auto's pioneering role in [extended range electric vehicle] technology and significant advancements in ADAS, heightened competition in the premium [plug-in hybrid electric vehicle] & EREV SUV segment, along with challenges in the crowded BEV market, have tempered the outlook," Lee said. "Additionally, Li Auto's BEV efforts are diluting margins." The downgrade comes as Li Auto gets set to begin deliveries on its six-seater i8 model, while its six-seater i6 is set for launch next month. "We do not expect a reversal in Li Auto's market share in the near term, due to continuously rising competition in the high-end PHEV segment," the analyst added. "Also, the new product cycle is focused on BEV which face challenging prospects in the crowded BEV segment." The sentiment echoes that of JPMorgan's, which downgraded Li Auto last week to neutral from overweight. Despite the downgrade, most analysts covering the stock remain bullish. Of the 28 who cover Li Auto, 21 rate it a buy or strong buy, LSEG data shows.
