The Other EV Boom

While everyone’s eyes are fixated on the shiny American EV titan and its charismatic billionaire CEO, another electronic vehicle revolution is quietly taking place on the other side of the Pacific. 


China, the largest automotive market in the world, is experiencing an EV boom of its own, driven by an ambitious government plan and a rapidly growing middle class.


The numbers are staggering: China is projected to reach 50% EV penetration by 2025. 


This vast sea of potential customers is not being ignored. 


Home-grown companies are emerging, designing and manufacturing vehicles specifically tailored to local preferences and regulations.


There’s one particular player in this market that’s proving to be incredibly promising. 


With a unique product mix that distinguishes it from its competitors, this company is rapidly carving out a significant market share. 


And yet, it remains off the radar of many Western investors, creating a potential opportunity for those willing to look beyond familiar shores.


Welcome to the world of Li Auto Inc. (LI), a Beijing-based electric vehicle manufacturer that’s quietly taking the Chinese market by storm. 


Unlike its competitors, who primarily focus on pure electric vehicles, Li Auto uses a different approach. 

Their vehicles are Extended-Range Electric Vehicles (EREVs), a unique blend of electric and internal combustion engine technologies.


The EREV model is a hit in China, where charging infrastructure is still being developed. 


The dual-engine configuration gives drivers the peace of mind of a gasoline backup, easing range anxiety, a common concern among potential EV owners.


Li Auto’s innovative approach has paid off. 


They were the first in China to successfully commercialize EREVs, and their sales numbers have been nothing short of impressive. 


As of the third quarter of 2023, the company delivered 40,000 vehicles, a 100% increase year-over-year.


Yet despite its success, Li Auto still trades at a considerable discount compared to its American and Chinese counterparts, largely due to it being lesser-known among Western investors. 


But this could change as the company continues to grow and as Chinese EVs gain more international recognition.


Li Auto presents a compelling investment opportunity in the booming Chinese EV market. 


While investing in foreign markets always carries a degree of risk due to factors like regulatory changes and currency fluctuations, the potential upside for Li Auto is significant. 


It’s a chance to ride the wave of China’s EV revolution while capitalizing on a play that is still largely unnoticed.


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