Bernstein analyst Eunice Lee downgraded the rating on Li Auto to a Hold today, setting a price target of $26.00.
Elevate Your Investing Strategy:
- Take advantage of TipRanks Premium at 50% off! Unlock powerful investing tools, advanced data, and expert analyst insights to help you invest with confidence.
Eunice Lee’s rating is based on a combination of factors including the increasing competition in the premium PHEV SUV market and the challenges Li Auto faces in the crowded BEV segment. Despite Li Auto’s pioneering EREV technology and advancements in ADAS, the competitive landscape is becoming more intense with new entrants like XPeng, Zeekr, and Xiaomi, which has led to a significant drop in Li Auto’s market share from 72% in Q2 2023 to 34% in Q2 2025.
Additionally, Li Auto’s expansion into the BEV market is proving to be margin dilutive, with the i8’s gross margin expected to be lower than that of its EREVs. While there are untapped opportunities due to Li Auto’s technological strengths and overseas potential, these may take longer to materialize. Consequently, the revenue and EPS forecasts for 2025 and 2026 have been lowered, reflecting a more cautious outlook for the next 12 months.
In another report released on August 13, J.P. Morgan also downgraded the stock to a Hold with a $28.00 price target.