Earlier on Tuesday, Li Auto (LI) delivered a surprise Q1 profit. But LI gave weak Q2 delivery and revenue guidance as supply disruptions continue. Li Auto stock extended its rally Wednesday.
LI, RIVN: Growing Pains For EV Startups
Both Rivian and Li Auto are promising but embattled EV startups. Backed by Ford (F) and Amazon (AMZN), Rivian aspires to shake Tesla’s dominance in the U.S. market. In China, Li Auto and its startup peers are challenging both Tesla (TSLA) and homegrown EV giant BYD (BYDDF).
Rivian stock had plunged Monday on an report that Ford (F) was unloading millions of RIVN shares. At the time, Ford declined to comment on the report. But late Tuesday, the auto giant disclosed in a Form 4 filing that it had indeed unloaded 8 million RIVN shares on May 9 for $214.4 million, or $26.80 a share. Ford continues to hold around 94 million Rivian shares. A markdown in the value of its RIVN stake weighed on Ford’s Q1 earnings.
Estimates: Analysts polled by FactSet forecast Rivian to lose $1.41 per share on revenue of $132.7 million. There are no year-ago figures.
Results: Check back late Wednesday.
Production guidance and cash burn will be closely watched, as the EV startup ramps up. In Q1, Rivian produced 2,553 EVs and delivered 1,227 EVs, including a mix of the R1T truck, R1S SUV and commercial vans for Amazon.
Outlook: Rivian expects to produce 25,000 EVs in 2022, after halving its prior target. But in March, Rivian warned of supply disruptions from Covid-19, the war in Ukraine and other factors. It also warned on rising costs of key battery materials and the lingering chip shortage. Cash burn will be watched
Rivian stock plunged nearly 10% to 20.60 on the stock market today, after setting a record low of 19.25 intraday. RIVN remains well under the 50-day moving average. Shares tanked 21% Monday, amid reports that Ford was selling some of its RIVN stake.
Last November, EV startup Rivian came public via a blockbuster IPO at 78 a share.
It began limited deliveries of the R1T, an all-electric truck, late last year. But in March, Rivian CEO R.J. Scaringe warned that EV production in 2022 will fall well short of plans, despite robust demand. Management halved plans to build 50,000 EVs this year.
Last week, rival EV startup Lucid (LCID) maintained its production target but warned of supply disruptions, including Covid-related factory shutdowns in China. LCID stock sank 9.8% to 16.37 on Monday, the lowest since Sept. 1. Lucid stock fell 3.8% to 15.35 Wednesday.
Li Auto Earnings
Estimates: Analysts polled by FactSet expected Li Auto to lose 7 cents per ADR vs. a loss of 6 cents a year ago. Revenue was seen vaulting to $1.49 billion.
Results: Li Auto earned 7 cents per share. Revenue leapt 167.5% to $1.51 billion.
Li has previously disclosed that it delivered 31,716 vehicles during the first quarter, near the high end of its forecast range and jumping 152% year over year. The automaker has one current model, the Li One SUV. The Li One is actually a hybrid, with a small gasoline engine to extend its range.
Outlook: Li Auto expects Q2 deliveries of 21,000-24,000, up 19.5%-36.6% vs. a year earlier but down sharply vs. Q1. It said Tuesday that deliveries of a delayed new EV, the L9, will now start in the third quarter.
Deliveries of the L9 will begin in Q3 despite “recent pandemic related bumps in the road,” CEO Xiang Li said in Tuesday’s earnings release. In mid April, Li Auto delayed the planned start of L9 deliveries. Li added Tuesday that supply disruptions from the recent Covid resurgence in China “have been challenging for our industry, and uncertainty remains for the near future.”
April sales slowed sharply for Li Auto and its China EV startup peers. Li’s EV sales slumped 62% vs. March and 25% vs. a year earlier. Many suppliers were shut down, severely affecting Li’s production.
The new Q2 forecast implies combined May-June deliveries will improve, but still lag Q1’s pace.
Li Auto also forecast Q2 revenue of $972.3 million-$1.11 billion, up 22%-40% vs. a year earlier. Analysts had forecast $1.759 billion.
Li Auto Stock
Shares rose 2.3% to 20.13 Wednesday. Li Auto stock closed at the bottom of the day’s range but extended Tuesday’s post-earnings rally.
Li Auto stock undercut the 50-day moving average in April after the SEC added it to a provisional list of foreign companies to be delisted from U.S. exchanges unless they open up their accounts.
Nio stock and Xpeng also rose Wednesday. They sank recently after joining LI stock on the provisional list of Chinese companies poised for a U.S. delisting.
Find Aparna Narayanan on Twitter at @IBD_Aparna.
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