What's Going On With Li Auto Stock

Li Auto Inc LI shares are trading lower by 2.5% to $34.10 Thursday morning on recent, continued weakness. Shares of several Chinese stocks are trading lower Thursday following China Evergrande Group stock being suspended in Hong Kong amid reports that its chairman has been under police surveillance.

Chinese stocks began their recent volatility amid concerns over the country's property sector following reports suggesting China Evergrande said it's unable to issue new debt due to an ongoing investigation into its Hengda Real Estate subsidiary.

Why It Matters

The Evergrande crisis can lead to decreased consumer confidence in China due to concerns about the broader economic stability. This could affect Li Auto as consumers may delay their purchases of electric vehicles due to economic uncertainty, leading to potential lower sales and revenue for the company.

See Also: Chinese Property Giant Evergrande Stock Halts Trading Amid Mounting Woes

Economic crises can also lead to supply chain disruptions and increased costs. Li Auto relies on a complex supply chain for components and materials needed for its electric vehicles. Any disruptions could lead to production delays and higher manufacturing costs.

What's Going On With Evergrande?

Evergrande, the beleaguered Chinese property developer, said Friday that it was cancelling a creditor meeting scheduled early this week. It said that “sales had not been as expected”.

The announcement is the latest in a series of scandals to hit the Chinese financial behemoth. Mid-September, the domestic regulator approved a 50% sale of its insurance business China Evergrande Life into a special purpose vehicle owned by the Chinese state to free up cash.

Then last week, staff in the company’s wealth management division were detained by Shenzhen police...Read More

According to data from Benzinga Pro, Li Auto has a 52-week high of $47.33 and a 52-week low of $12.52.