Li Auto Stock Drops as Q1 Revenue Outlook Lags Estimates

U.S.-listed shares of Li Auto (LI) are falling around 3% in intraday trading Friday after the Chinese electric vehicle manufacturer projected a lower-than-estimated first-quarter sales number.

The company said it expects total revenues to be between 23.4 billion yuan ($3.2 billion) and 24.7 billion yuan, representing a year-over-year decrease of 8.7% to 3.5%. That was below Visible Alpha estimates of 33.5 billion yuan in revenue for the quarter.

During the fourth quarter, Li Auto posted adjusted earnings per share (EPS) of 10.04 yuan ($1.38), versus 11.46 yuan the same period the previous year. Total revenues rose 6.1% to 44.3 billion yuan year-over-year.

The company competes in China against homegrown EV rivals Nio (NIO), BYD, and XPeng (XPEV) as well as Elon Musk’s Tesla (TSLA). The Chinese EV makers have been locked in a price war with its rivals which has weighed on its earnings, according to reporting from Reuters. Tesla, meanwhile, is looking to produce and sell a less expensive version of its Model Y SUV in China starting next year, according to Reuters, as the U.S. company grapples with its loss of market share in the country.

Li Auto shares have lost more than a quarter of their value in the past year.