HK Stock Market Move | LI AUTO-W(02015) Falls Nearly 3%; In-House Battery R&D Investment Requires Cost Amortization, Jefferies Expects Gross Margin Improvement to Emerge Next Year

LI AUTO-W(02015) fell nearly 3%, down 2.11% as of press time to HK$43.52, with turnover of HK$183 million. On the news front, Jefferies released a research report stating that LI AUTO-W recently held its Power Day electric technology launch event, officially unveiling the new "Lianshan" electric technology system. This is not merely a display of battery specifications, but reflects that the company is gaining the right to define electric technology and shifting the differentiated competition of battery electric vehicles from the complete vehicle to the full powertrain system. Jefferies stated that the "Lianshan" system should reduce battery costs in the long run, but in the short term requires more than RMB200 million per year in R&D investment, plus investments in silicon carbide, electric drive, and charging infrastructure, all of which need battery electric vehicle sales to amortize. The lifetime warranty also means Li Auto needs to bear more battery responsibility. The bank expects gross margin improvement to become more evident only next year.