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BEIJING, August 15 (TMTPOST)— Tesla’s Chinese Li Auto Inc. surprisingly posted worse-than-expected guidance in the current quarter despite launching its highly-anticipated new model Li L9, highlighting more challenges the electric vehicle (EV) maker is facing in the next coming months.

Source: Visual China

In the quarter ended June 30, 2022, Li Auto had a total revenue of RMB8.73 billion (US$1.3 billion) with a 73.3% year-over-year (YoY) increase, beating the analysts’ estimated RMB7.99 billion, but the revenue dropped for the second straight quarter with a quarter-over-quarter (QoQ) decline of 8.7%. The vehicle sales were RMB8.48 billion, increasing 73% YoY and decreasing 8.9% QoQ. The net loss was RMB641 million, expanding 172.2% from a year ago and the basic net loss per American depositary share (ADS) to ordinary shareholders was RMB0.64%, better than the Wall Street projection of RMB1.14.

Looking forward the third quarter, Li Auto expected to deliver 27,000 to 29,000 vehicles with a YoY increase range of 7.5% to 15.5%, 10,000 units less than the analysts’ projection. And the revenue is expected to grow 15.3% to 22.9% YoY to a range of RMB8.96 billion (US$1.34 billion) to RMB9.56 billion (US$1.43 billion), almost RMB5 billion less than the analysts’ expectation.

Li Auto’s guidance is, by any means, much weaker than anticipated, which reflects more an issue from the demand side than the supply side, Longbridge Securities commented. Longbridge noted that the market was shocked by Li Auto’s signaling that its delivery in the current month and next month would further decline even though it just released Li L9, the flagship smart SUV for families, in June. Given the quarterly delivery forecast, the company seems to deliver more than 9,000 vehicles each in August and September since it had a delivery of 10,422 units in July.

Li L9 has received positive feedback from our users since its launch on June21, Li Auto founder and CEO Xiang Li said. In a call with analysts, Li reconfirmed the previous forecast that his company would deliver 10,000 units by September. He stressed that L9, as a premium product and Li Auto’s second model, has higher margins than the first model Li ONE. He added that the demand for L9 remained robust in the most recent two weeks.