Li Auto Faces Mounting Pressure as Analyst Downgrade Rattles Market

Chinese electric vehicle manufacturer Li Auto is confronting significant headwinds as it launches deliveries of its new Li i8 electric SUV. The company’s challenges intensified following a stark warning from investment bank Bernstein, which downgraded the stock and slashed its price target, questioning whether Li Auto is entering its most critical test in recent years.

Bernstein’s Revised Outlook Sends Shockwaves

In a move that has unsettled investor sentiment, Bernstein has reduced its rating on Li Auto from “Buy” to “Hold.” More dramatically, the firm cut its price target substantially from $33 to $26 per share. The bank’s analysts pointed to escalating competitive threats within the premium Plug-in Hybrid Electric Vehicle (PHEV) and extended-range electric SUV segments as the primary catalyst for their more cautious stance. They also highlighted the increasingly saturated battery electric vehicle (BEV) market as a source of additional pressure.

The market’s response was swift and negative. Li Auto’s shares registered a noticeable decline in pre-market trading, continuing a downward trajectory that has seen the equity lose a quarter of its value over the past month alone.

Should investors sell immediately? Or is it worth buying Li Auto?

All Eyes on the New Li i8 Launch

Amid this analyst pessimism, Li Auto commenced customer deliveries for its new all-electric, six-seater Li i8 model. The vehicle is initially being rolled out across 44 cities in China. Management has set a formidable target for this new offering: moving between 8,000 and 10,000 units of the i8 by the conclusion of September.

The path to this launch has not been smooth. Prior to the official market entry, Li Auto was compelled to relaunch the i8 with a simplified number of variants and adjusted pricing—a move widely interpreted as a sign of a challenging and highly competitive debut.

The central question now is whether this new SUV can serve as the catalyst for a company turnaround or if Bernstein’s sobering assessment of a brutally competitive Chinese EV market, which offers little room for error, will prove accurate. The performance of the Li i8 in the coming weeks will be critical in determining whether Li Auto can navigate this period of turbulence or if the pressure will continue to mount.