Li Auto demonstrates incredible revenue growth


 

Li Auto manufactures hybrid vehicles EREV (Extended Range Electric Vehicle), or literally - electric vehicles with an extended range: the internal combustion engine is connected only to a generator, which charges the battery that propels the car. The company generates revenue from the sale of its cars in China: 20.2 million units of passenger vehicles were sold in 2020. In 2018, the Chinese government designated EREV as an “electric vehicle” category, which has given Li Auto products government incentives. For example, when purchasing an EREV, the car owner does not have to participate in the lottery to obtain a registration number, as well as pay a special purchase tax.

China is home to about 20% of the world's middle class and this number continues to grow at an extremely fast pace. Li Auto models belong to the premium segment, so the manufacturer should become one of the beneficiaries of both the new environmental policy and the further increase in the welfare of the Chinese. GDP per capita in China is $ 10 thousand, while in the United States - $ 65 thousand. In the coming years, this gap will narrow.

If in 2018 the revenue was equal to zero, then in 2020 Li Auto earned $ 1.45 billion. In 2021, the management expects to double this figure and earn more than $ 3 billion, and in 2022 - about $ 5.3 billion. The gross profit is expected close to 16.9%, and 19% in 2021 and 2022, respectively.

 

 

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