We recently compiled a list of the 5 Best EV Stocks for 2025. In this article, we are going to take a look at where Li Auto Inc. (NASDAQ:LI) stands against the other EV stocks.
The automotive industry is on a steady growth path, with the electric vehicle (EV) segment leading the charge. Growing momentum and technological advancements are there to adhere to consumer demands, alongside new government policies. As the industry moves towards a cleaner and sustainable future, it opens the door for investors to profit from it.
Around the end of 2024, the number of EVs sold globally was predicted to surpass 17 million, which is a significant jump from 13 million in 2023. Though the electric vehicle witnessed an increasing number of challenges last year, 2025 could bring new opportunities for the industry. Stepping into the new year could help revitalize investor sentiment for the EV market, and bolster investor confidence going forward.
A factory worker welding a car body with precision.
Li Auto Inc. (NASDAQ:LI)
China-based Li Auto (LI) has been supplying electric vehicles for over a decade and has shown significant growth in the past years, a trend that should continue throughout 2025. To put that into perspective, the company delivered over 500,000 vehicles in 2024 and currently projects a 40% increase for this year.
Looking at Li Auto’s Q3 report for 2024 shows growth across the board. The company delivered over 150,000 vehicles in 2024, which is a 45.5% increase YoY. Total sales for the reported period was $5.9 billion, an increase of 22.9% compared to Q3 2023, and up 36.3% quarter-over-quarter (QoQ). Quarterly revenue of $6.1 billion and gross profit of $1.3 billion delivered a significant increase compared to Q3 2023.
Share prices peaked at over $46.00 at the end of February 2024, before sliding, and ending the year at $24.75 per share. Li Auto’s strong market share, coupled with a slow, but modestly growing presence in Europe could be crucial to its near-term price performance.
A fundamental analysis by investment research firm Validea, shows that LI managed to deliver positive ratings for its total debt to equity ratio, while maintaining solid free cash flow per share performance. In Q3 2024, total EBITDA reported of $3.88 billion was an impressive improvement of 40.79% YoY.
However, on the near-term three year outlook, Validea analysts see a decline in the company’s net average profit margin, which could further deteriorate the company’s free cash flow, which has been on the decline year over year, falling 49.07% in the recent reporting quarter.
Conclusion
As the EV market continues to expand at a fast pace, investing in EV stocks offers a unique opportunity for investors to capitalize. The transition towards sustainable transport, followed by the supporting industries, means that the EV segment is on a growth path. This is good news for investors looking to invest in this segment, and today’s five stocks can be an excellent option that can result in a solid profit.
Overall LI ranks 4th on our list of the best EV stocks to buy. While we acknowledge the potential of LI as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than LI but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
Disclosure: I have a tiny position in Tesla. No positions in any other stocks. This article is originally published at Insider Monkey.
