Where Does Li Auto Inc. (NASDAQ:LI) Stand in the EV Industry?
We recently compiled a list of the 15 Biggest EV Stocks in the World in 2024 and in this article, we discuss where Li Auto Inc. (NASDAQ:LI) stands in this list and whether it’s a good investment.
According to the Global EV Outlook 2024 by the International Energy Agency, electric car sales surged in 2023, reaching nearly 14 million globally. This represents a 35% jump from 2022 and brings the total number of electric cars on the road to 40 million. Weekly registrations in 2023 surpassed the entire annual total from just ten years ago. Electric cars now account for 18% of all car sales globally, a significant climb from 2% in 2018. This rapid growth indicates a maturing electric car market with strong momentum. Interestingly, battery electric cars make up the majority (70%) of electric vehicles on the road today.
Approximately 95% of these sales were concentrated in China, Europe, and the United States, which dominate new electric car registrations. In these regions, electric cars represent a significant share of their local markets, with over 30% in China and over 20% in Europe. As these three key markets account for two-thirds of total car sales globally, their swift adoption of electric vehicles has a significant influence on worldwide trends.
As a result, many of the major EV manufacturers are based in these countries. However, emerging players are also making their mark in other regions. For instance, a subsidiary of Vietnamese conglomerate Vingroup made its debut on NASDAQ in August 2023. The company was valued at approximately $23 billion through a SPAC deal. The company has already entered the North American market, importing about 2,100 EVs from Vietnam to the US and 800 to Canada.
In addition to US, China, and Europe, emerging markets like Southeast Asia and Brazil are also seeing rising EV sales, supported by various incentives and investments. In terms of the future outlook for electric vehicles, the long-term goals of top automakers in the world are quite ambitious. If achieved, they could put over 20 million electric cars on the road by 2030. This will lead to electric vehicles making up between 42% and 58% of car sales by 2030, exceeding even the most optimistic forecasts. The electric vehicle market size is predicted to reach over $950 billion by 2030 with a compound annual growth rate (CAGR) of 13.7% between 2023 and 2030.
Key drivers for growth in the Global EV market include decreasing EV battery prices and supportive government policies. The fastest-growing market segments are fuel-cell electric vehicles (FCEVs) and mid-priced EVs. Additionally, the Asia-Pacific region is expected to lead market growth. However, challenges such as high initial investments for charging infrastructure could impede growth.
A fleet of electric vehicles lined up in uniform, highlighting the convenience of the company’s transportation solutions.
Our Methodology
To compile our list of the 15 biggest EV stocks in the world in 2024, we shortlisted companies on the basis of their market capitalization. We have only included companies that are pure play in the EV sector or have substantial exposure to the sector. The biggest EV stocks in the world in 2024 have been ranked in ascending order of their market capitalization figures in USD. We also scanned our database of 919 hedge funds (as of Q1 2024) to share the number of hedge fund investors, where applicable.
“Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).”
Is Li Auto Inc. (NASDAQ:LI) the Biggest EV Stock Internationally?
Li Auto Inc. (NASDAQ:LI)
Market Capitalization: $21.66 Billion
Number of Hedge Fund Holders: 29
Li Auto Inc. (NASDAQ:LI) is a leading Chinese electric vehicle maker headquartered in Beijing, focusing on family-oriented SUVs with extended-range electric technology. Founded in 2015 by Li Xiang, the company manufactures its vehicles in Changzhou.
Li Auto Inc. (NASDAQ:LI) recently unveiled a 7-seater EV, which is one of the biggest electric vehicles in the world. The name of this vehicle is MEGA and it is targeted towards large families in China.
In Q1 2024, Li Auto Inc. (NASDAQ:LI) delivered over 80,400 vehicles, marking a 52.9% increase compared to the same period last year. According to the China Automotive Technology and Research Center, the NEV market segment priced above RMB 200,000 experienced a 24.8% YoY growth in Q1. Li Auto Inc.’s (NASDAQ:LI) growth rate surpasses the markets, positioning the company as a leader among high-end NEV brands.
As a result of the increase in vehicle deliveries, Li Auto Inc.’s (NASDAQ:LI) total revenue for Q1 was recorded at RMB 25.6 billion, representing a 36.4% increase YoY. Despite the introduction of Li MEGA, the transition of the L series, and subsequent price adjustments, the company’s gross margin for the first quarter remained healthy at 20.6%.
Analysts have assigned Li Auto Inc. (NASDAQ:LI) stock a ‘Strong Buy’ rating, with a 12-month average price target of $38.3. This price target reflects an upside of over 80% from the current price levels.
Overall, Li Auto Inc. (NASDAQ:LI) ranks 3rd among the 15 biggest EV stocks in the world in 2024. You can visit the 15 Biggest EV Stocks in the World in 2024 to see the other electric vehicle companies that are on the hedge fund radar.
While we acknowledge the potential of electric vehicle companies, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than NVIDIA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure. None. This article is originally published on Insider Monkey.
