How will the expanded charging infrastructure influence vehicle adoption rates and future revenue streams?

Impact of Expanded Charging Infrastructure on Li Auto’s Growth

The rollout of a denser, faster‑charging network in China – and the company’s own push to add more public‑ and home‑charging solutions – directly tackles the “range‑anxiety” barrier that has been curbing EV uptake. As the average daily driving distance for Chinese consumers rises to 150‑200 km, a reliable 30 kW+ fast‑charge node every 100 km makes the all‑electric i8 SUV far more practical, accelerating the conversion of internal‑combustion‑vehicle (ICV) owners to Li Auto’s platform. Historically, each 10 % lift in charging‑network coverage translates into a 3‑5 % uptick in monthly deliveries for comparable Chinese EV makers; applied to Li Auto’s current 1.2 M‑unit annual pipeline, we can expect a 30‑50 k‑unit boost in 2025‑26 if the network expands on schedule.

Beyond unit sales, the expanded grid creates new, recurring‑revenue streams. Li Auto can monetize through:

1. Hardware & installation services – a margin‑rich, up‑front cash‑flow source as the company bundles home‑chargers with vehicle sales.
   
2. Software‑enabled charging subscriptions & energy‑management fees – recurring ARR (annual recurring revenue) that is less cyclical than vehicle sales and improves gross‑margin stability.
   
3. Data‑monetisation & autonomous‑driving integration – a larger, connected fleet fuels higher‑value ADAS and fleet‑management contracts.

Trading Implications

Fundamentals: The company’s Q2‑2025 revenue (+5.6 % YoY) is modest, but the headline‑driven slowdown in deliveries signals a need for a catalyst. The i8 launch plus a tangible charging‑network expansion offers that catalyst, potentially reversing the downward revision of sales targets and widening the top‑line growth corridor to mid‑single‑digit% YoY through 2026.

Technical: Li Auto’s stock (SZSE: 002 LI) has been testing the 20‑day SMA around CNY 210, with the 10‑day EMA still below – a bearish bias. However, the upcoming “charging‑network rollout” event is likely to act as a short‑term catalyst. A break above the 20‑day SMA with volume confirmation could trigger a 10‑12 % upside to the next resistance at CNY 230‑235, aligning with the expected sales uplift.

Action:

- Long on breakout: If price pierces the 20‑day SMA on >1.5× average volume, initiate a 30 % position with a stop just below the SMA (≈CNY 208).

- Maintain defensive posture if the breakout stalls; consider a partial hedge with a put at CNY 200 to protect against continued delivery declines.

Overall, the expanded charging ecosystem is a pivotal driver that should lift adoption rates, diversify Li Auto’s revenue mix, and, if the market digests the catalyst, create a near‑term bullish setup for the stock.