Shares of Li Auto (2015.HK) plummeted 11.76% in intraday trading on Wednesday, marking its biggest one-day percentage decline since April. The sharp drop comes as the Chinese electric vehicle maker launched its new six-seat battery electric SUV, the Li i8, amid growing concerns over pricing strategy and intensifying competition in the world's largest automotive market.
The Li i8, set to begin deliveries on August 20, is offered in three variants priced between 321,800 yuan and 369,800 yuan ($44,855-$51,546). However, market analysts, including Citi, noted that the pricing was higher than expected, potentially impacting consumer demand. This pricing strategy comes at a time when Chinese authorities have intervened to halt a prolonged "price war" in the auto sector, which Fitch reports could suppress near-term demand in Q3 FY25.
Adding to investor concerns, the launch is seen as a pre-emptive strike against Tesla in China, signaling an escalation in competition within the EV market. As the Chinese stock market generally trends upward, with the Shanghai Composite Index entering bull market territory, Li Auto's significant drop highlights the specific challenges facing the company in a rapidly evolving and increasingly competitive EV landscape.
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