Why Li Auto Is Offering A $1,000 Incentive On Its First Model

As demand unexpectedly weakened, Chinese EV-manufacturer Li Auto Inc LI is offering an incentive worth 7,000 yuan ($1,030) on its first model, the Li ONE EREV (extended-range electric vehicle), reported CnEVPost.

Replying to an analyst’s question during a conference call about whether Li Auto was offering a discount on insurance purchases for the Li ONE, Li Auto’s management confirmed the offer and stated it became official starting Aug. 14, the report added.

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Slowing Orders: Li Auto has witnessed a slowdown in order intake in recent times for its Li ONE model, as consumers seem to have been attracted by the new SUV Li L9, the report said quoting the company's management.

The firm’s next model, the Li L8, is set to be released earlier than expected. It will have a shorter lead time from launch to delivery as compared to the Li L9, according to the report.

Expert Take: Bo Pei of US Tiger Securities Inc maintained a ‘Buy’ rating on the stock with a price target of $40. “Overall, we believe the soft 3Q guidance is primarily due to the model transition gap (from Li ONE to L9 & L8), actually demonstrating the strong customer interest in the new models,” the analyst said in a note on Monday.