Barclays Keeps ‘Equalweight’ Rating on Li Auto

Barclays analyst Jiong Shao reiterated on May 30, 2025, an ‘Equalweight’ rating and $31 price target on Li Auto.

“Key takeaways

LI’s 1Q25 deliveries were initially impacted by the well communicated L series updates which curbed demand, but recovered in March after announcing financing discounts and direct price discounts on old model inventories.

LI ended the quarter with 92.9k total deliveries, near the high end of its guidance range.

Impressively the company even modestly improved its vehicle margin in 1Q25 to 19.8% despite aforementioned discounts and lower deliveries vs. 4Q.

However, given that these discounts have extended into April and the highermargin Mega model will contribute a lower delivery mix due to its recent refresh in early May, we expect to see a slight qoq contraction in vehicle margin in 2Q25, before picking back up in 3Q25 due to Mega’s production ramp-up and the commencement of i8 deliveries.

Management reiterated the release timeline for its first ever BEV models: i8 will be released in July with deliveries to start in August, and i6 will be released in September with deliveries to start in 4Q.

While the successful launch of refreshed Mega models provides management and the street some reassurance that LI’s ongoing investments in charging infrastructures are beginning to yield results and consumers are increasingly accepting LI’s BEV offerings, especially compared to last year when Mega was initially released, there remains significant uncertainty.

Both i8 and i6 will be competing in the highly crowded RMB 200k+ BEV market, which includes competitors such as Tesla Model 3 and Model Y, and Xiaomi SU7 and YU7.

As a result, we remain on the sidelines and retain our EW rating with a PT of $31.

What we liked

• Stable vehicle margin despite discounts and volume decrease;
• Good initial results from model refreshes completed in May;
• BEV model launches progress on time.

Things to monitor

• Competition, especially from the likes of Xiaomi and Tesla;
• Macro headwind.”

This research note is reproduced verbatim from the issuing firm. Price Target never edits, paraphrases or alters analysts’ words — we only republish them in one place.