Earnings from Li Auto Are On The Way. Keep An Eye Out for Delivery Guidelines.

Li Auto, a Chinese electric car manufacturer, will disclose quarterly results on Tuesday morning. Along with the results for the previous quarter, investors will be looking for third-quarter delivery guidance.

The advice will provide an indicator of how EV sales are progressing in China, which is an important data point for Li Auto (LI), Tesla (TSLA), BYD 1211 (1211. Hong Kong), and other EV producers who sell cars in the world’s largest market for new automobiles and EVs.

Wall Street anticipates a 3-cent per share loss on $1.3 billion in revenues for Li’s second-quarter earnings. Li reported a 2-cent loss on $780 million in sales a year earlier.

Li delivered around 87,000 units in the second quarter of 2023, an increase of more than 200% from the approximately 29,000 units delivered in the second quarter of 2022. COVID-19 lockdowns in China disrupted the second quarter of 2022.

In July, the first month of the third quarter, Li delivered a record 34,134 automobiles. Wall Street is expecting something in the 90,000 range for the entire quarter.

This is a 5% increase over the previous quarter. Battery-electric car sales in China would be about flat year over year if the industry increased by 5% consecutively.

Flat may be slightly disappointing. In the first quarter, industrywide battery-electric vehicle sales increased by around 10% year on year, then increased by almost 40% in the second quarter, bouncing back from Covid lockdown-induced lows.

Investors would appreciate any year-over-year gain in the third quarter. Li forecasting close to 100,000 units for the quarter would boost investor confidence.

Management will have a conference call at 8 a.m. Eastern time to discuss guidance and results.

In terms of earnings, Li Auto’s American depositary receipts, or ADRs, are up 122% year to date, outperforming the S&P 500 and Nasdaq Composite, which are up 18% and 34%, respectively.