Analysts at Bernstein SocGen reduced Li Auto's price target to $14.50 from $15.50, maintaining a Market Perform rating, as competitive pressures weigh on the Chinese premium electric vehicle maker.
The downgrade follows a broader pullback in Li Auto's shares, which traded at $12.22 on Wednesday, near a 52-week low of $11.65. The stock has declined 31% over the past six months. Bernstein cited rising competition from domestic rivals, including BYD and Geely, whose exports surged 80% and 184% year-over-year in May, respectively.
Li Auto's delivery outlook has softened, with Bernstein projecting 95,000 to 100,000 units in the third quarter of 2026, a growth range of 2% to 7% compared with the same period last year. The company delivered 33,350 vehicles in May, an 18% decline year-over-year, bringing its cumulative deliveries to 1,702,792 units. July deliveries totaled 30,500 units, with projections for August and September ranging between 32,000 and 35,000 units.
The broader Chinese new energy vehicle (NEV) market also showed signs of cooling, with sales falling 7.5% year-over-year in May, though market share for NEVs rose to 63%, according to Macquarie data. Li Auto's revenue declined 24% year-over-year, while its gross margin stood at 16% over the past 12 months. Management has projected a recovery to above 15% in the fourth quarter of 2026.
Competitive dynamics are intensifying as Li Auto prepares to launch two new battery electric models targeting premium family consumers: the renewed MEGA, priced around 500,000 yuan, and the new i9, priced around 400,000 yuan. Bernstein highlighted a risk of product overlap with Li Auto's existing L9 model, raising concerns over potential internal cannibalization.
Other analysts have also adjusted their outlooks. US Tiger Securities reduced its target to $16 from $22, while Barclays cut its target to $14 from $18, both maintaining neutral ratings. The adjustments reflect a cautious stance amid shifting demand and competitive pressures in China's EV sector.
