(Bloomberg) -- Li Auto Inc. reported better-than-expected third-quarter results, as the company’s production costs started to stabilize and efficiency measures came into effect.
Founded in 2015, the automaker was the third new-energy vehicle manufacturer to achieve profitability after only Tesla Inc. and BYD Co. In the three months ended Sept. 30, Li Auto posted an adjusted net income of 3.9 billion yuan ($541 million), while analysts were expecting 3 billion yuan on average, data compiled by Bloomberg showed.
Revenue jumped 24% to 42.9 billion yuan from the same period a year ago, as the company shipped 152,831 vehicles to its customers, marking a year-on-year growth of 45.4%, according to a statement filed Thursday. It also beat the analysts’ forecast of 41.4 billion yuan. Gross margin in the period dropped to 21.5%.
It now looks to deliver as many as 170,000 vehicles in the last quarter of the year, with a revenue of up to 45.9 billion yuan.
“With sales across our model lineup steadily growing, our economies of scale continued to expand which, combined with Li AD Max vehicles accounting for a larger proportion of our sales mix driven by breakthroughs in intelligentization, allowed us to meaningfully expand our gross margin to 21.5%,” Li Tie, the company’s chief financial officer, said in the statement.
Li Auto’s revenues were largely driven by its L-Series of extended-range EVs, which can power up the vehicle’s electric motor with an engine, reducing range anxiety. The L6, the brand’s latest and smallest model, turned out to be a big success after its launch earlier this year with production costs smoothing out as the volumes stabilized.
However, the company’s first pure-electric model, a multi-purpose vehicle with prices starting at over 500,000 yuan, has met with a muted market reaction, forcing Li Auto to re-think its market strategy and push back the launches of several new battery-electric models. The company also lowered the prices of all products in April, which hurt second-quarter profits.
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