Tesla Stock Hit by China Woes, Particularly Earnings From Li Auto
Tesla still has a China problem, which hit shares of the electric-vehicle maker on Monday.
Tesla stock dropped 1.4% to close at $174.95. Nothing happened directly to Tesla per se. The issue was earnings from Li Auto. The Chinese EV maker reported weaker-than-expected earnings and management’s revenue guidance for the second quarter, at about $4.2 billion, was up only 6% year over year and roughly 20% below Wall Street estimates.
Li’s…
still has a China problem, which hit shares of the electric-vehicle maker on Monday.
stock dropped 1.4% to close at $174.95. Nothing happened directly to Tesla per se. The issue was earnings from
Li Auto
.
The Chinese EV maker reported weaker-than-expected earnings and management’s revenue guidance for the second quarter, at about $4.2 billion, was up only 6% year over year and roughly 20% below Wall Street estimates.
Li’s U.S.-listed American depositary receipts closed down 12.8% on Monday at $21.71. In premarket trading Tuesday, Li Auto was falling 4.5%.
XPeng
,
another Chinese EV maker, is scheduled to report quarterly earnings on Tuesday.
Demand wasn’t what led to the guidance disappointment—pricing did it. Li expects to ship about 108,000 cars in the second quarter up about 25% year over year.
Following earnings, CFRA analyst Aaron Ho downgraded Li shares to Sell from Hold. “We are neutral on Li Auto’s fundamentals mostly due to the fierce competition in China’s EV market, which limits average selling price gains while keeping research and development and marketing expenses high,” wrote the analyst.
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Li Auto’s stock took it on the chin, but fierce competition can hurt all sellers of EVs in China, including Tesla.
Tesla stock was down 0.6% in premarket trading at $173.86, while
and
futures both declined about 0.1%.
Write to Al Root at allen.root@dowjones.com
