Li Auto
reported strong third-quarter numbers. What’s more, the outlook for the fourth quarter was solid. That’s good for shares of Li Auto, and it’s not bad for
Tesla
stock either.

Li Auto (ticker: LI) announced Thursday adjusted earnings per share of 45 cents from sales of $4.8 billion. Wall Street was looking for earnings per share of about 20 cents from sales of $4.6 billion, according to FactSet. A year ago, Li reported a per-share loss of 5 cents from sales of $1.3 billion.

Li Auto stock was rising 3% in premarket trading.
S&P 500
futures were up about 0.1% and
Nasdaq Composite
futures were down about 0.1%.

Sales have grown dramatically as Li has expanded its production and product lineup. Li has achieved the scale required to make money selling cars: The company shipped more than 105,000 units in the third quarter, up from about 27,000 a year ago.

Tesla didn’t produce consistent profits until shipping roughly 100,000 cars a quarter.

Now Li Auto, along with Telsa and
BYD,
have the distinction of being the only consistently profitable pure-play electric-vehicle makers on the planet. Li is more profitable than Tesla at the moment. Li’s adjusted operating profit margin came in at 8.6%. Tesla reported a third-quarter operating profit margin of 7.6% on Oct. 18.

Looking ahead, Li expects to ship 125,000 to 128,000 units in the fourth quarter. That should be good enough for investors who are worried about global EV demand and the condition of the Chinese EV market.

Chinese BEV sales, including exports, rose about 10% year over year in the third quarter. That’s slower growth than in recent quarters; BEV sales grew 40% in the second quarter.

Slowing growth and weak stock prices are what had investors hoping for a solid report. Through Wednesday trading, Li stock has fallen about 8% over the past three months, despite rising deliveries. The S&P and Nasdaq both have declined less than 2% over the same span.

Shares of Tesla and BYD (1211.Hong Kong), the other profitable EV makers, were off about 11% and 5%, respectively, over that period.

Write to Al Root at allen.root@dowjones.com

 

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