JPMorgan downgrades Li Auto as Chinese EV competition ramps up
Shares of Li Auto could be under pressure as the company faces tough competition, according to JPMorgan. Analyst Nick Lai downgraded the Chinese electric vehicle company to neutral from overweight and lowered his price target by $5 to $28. His new target suggests the stock — which is up 3.8% year to date —still has 12.4% potential upside from Wednesday’s close. “We revise down Li’s 2025/26 volume and earnings estimates by ~10-20%, largely to reflect intensifying competitive dynamics facing Li’s BEV business,” Lai said, adding that the stock is “fairly valued at current levels” in his view. Behind Lai’s downgrade is his belief that Li will see more conservative volume in the second half of the year and beyond as competition rises in the company’s target battery electric vehicle, or BEV, market. LI 1Y mountain Li Auto stock performance over the past year. “We upgraded Li to OW in Feb-25 as we expected the company’s attempt to re-enter the BEV market would be successful, driving both volume and share price upside in 2H25-2026 (after the failure of “Mega” MPV in 2Q24),” Lai said. “At the same time, we note competing models – especially NIO’s ONVO L90 SUV – have attracted meaningful traffic and orders compared with i8, based on our recent visits to both Li Auto and NIO stores in Shanghai and Shenzhen, which we didn’t anticipate,” he continued. Li Auto recently introduced the i8, its six-seater SUV starting at around RMB 349,000. While its price and specs met expectations, the company swiftly cut the price of the vehicle one week after its initial launch in response to customer feedback. In September, Lai expects the company to launch its i6 5-seater all-electric SUV — which is expected to start between RMB 240,000 and RMB 250,000. Both the i8 and i6 will compete with rivals offering similar priced SUVs, the analyst said. He pointed to potential competition from BYD’s SUV in the Dynasty Tang series expected to launch by the end of the year, as well as Nio’s ONVO L80 slated to launch by the fourth quarter of this year or early 2026 among other expected releases from Chinese brands. Shares fell about 2% following the downgrade.
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