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Li Auto has big plans for growth. It is targeting 20% ​​of the Chinese electric vehicle market.

Courtesy of Li Auto

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there’s no shortage of companies looking to take its EV crown. Add a Chinese car manufacturer

Li-Auto

to the list.

Li-Auto

(ticker: LI) has big ambitions for sales in its home market. “Our goal is 20%,” Li chairman and co-founder Kevin Shen said in an interview on Bloomberg TV.

He was speaking on behalf of NEV in China. NEV stands for New Energy Vehicle and is how China counts sales of low-emission vehicles. The term includes all battery electric vehicles and plug-in hybrid vehicles.

China is the world’s largest market for new cars and new electric vehicles. About 2.2 million cars were shipped by Chinese automakers in June, according to Citigroup analyst Jeff Chung. About 26% of them were NEVs.

BYD

(1211.Hong Kong) shipped about 134,000, or 23% of the total.

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(TSLA) shipped about 79,000, or about 14% of the total.

BYD
,

however, ships both hybrid and battery electric vehicles. Tesla is even bigger in battery-only vehicles.

Li shipped 13,024 vehicles in June. To reach Shen’s goal by the middle of the decade, this number would need to increase 10 or 12 times in just a few years.

“We want to replicate the same success of Li ONE,” Shen added. The ONE is the company’s first product, a popular SUV with an onboard generator that can recharge batteries for extra range. “In terms of the product portfolio, in terms of the product portfolio, in terms of the price range that we have to cover, in terms of the manufacturing capacity and also the capacity of our suppliers, we are very serious about this 20% .”

Li is not yet generating free cash flow, so she will need external capital to meet her growth goals. Shen said the company will fundraise when the time is right.

Li’s actions could be affected by Shen’s vision. The stock rose around 2.7% in Hong Kong. The


Hang Seng Index

down 0.2%.

Shares rose 0.5% in premarket trading in the United States


S&P500

and


Dow Jones Industrial Average

futures fell 1.3% and 1.4%, respectively.

As of Thursday’s open session, Li stock has gained about 18% this year. That’s way better than most auto stocks. Automotive stocks in the


Russell 3000 Index

are down about 34% in 2022, on average.

Wall Street might have something to do with the outperformance. Analysts believe Li has a bright future. Nearly 90% of analysts covering equity rate stocks are buying. The average buy rating ratio for S&P 500 stocks is around 58%.

A year ago, the Buy-rating ratio was closer to 80%. Analysts have become more bullish on Li stock.

Write to Al Root at [email protected]