Al Root

Shares in China's Li Auto, a specialist in so-called extended-range electric vehicles, took off on Tuesday in response to expectations it will compete more directly with ordinary EVs.

Li makes a lot of battery-powered cars -- it sold 500,508 in 2024 -- but it focuses on vehicles that include a gasoline-powered generator to recharge the batteries on the fly. Traditional hybrids have an electric motor and a gasoline-powered motor. With an extended-range EV, or EREV, only an electric motor moves the wheels.

An all-electric version of its L8, a three-row, six-seat premium SUV, which the company recently teased, would represent a product-line expansion for Li. It would allow it to take a cut of a market now dominated by companies such as Tesla. Li didn't immediately respond to a request for comment about the vehicle.

Li's U.S.-listed American depositary receipts were up about 14% in early trading Tuesday. The S&P 500 and Dow Jones Industrial Average were off about 0.6% and 0.1%, respectively.

The size of the reaction is a little surprising. The early gain left the shares up about 25% year to date and up 33% over the past three months.

Still, a fully electric EV would open a new market for Li. In 2024, roughly 13 million battery-powered cars were sold in China. Almost eight million were all-electric, and about five million were plug-in hybrids.

Write to Al Root at allen.root@dowjones.com

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February 25, 2025 11:06 ET (16:06 GMT)

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