i6 is crucial for Li Auto, Morgan Stanley suggests: pricing should be more aggressive, targeting the 200,000 range

Li Auto is facing a critical moment in its pure electric vehicle strategy. Morgan Stanley believes that the i6 is a life-and-death battle for Li Auto and recommends aggressive pricing to boost sales.

On September 12, according to Chasing Wind Trading Platform, Morgan Stanley stated in its latest research report that the upcoming i6 model, set to launch in late September, is crucial for Li Auto. It suggests adopting a more aggressive pricing strategy, lowering the guide price from the previously set range of 250,000-300,000 yuan to 200,000-250,000 yuan.

The report points out that the underperformance of the i8 model has left investors feeling frustrated, and the record booking volume of competitors may force Li Auto to adjust its product, delivery, and pricing strategies more quickly than expected.

Morgan Stanley analysts believe that Li Auto needs to choose between a 20% gross margin and monthly sales of 20,000 units. To achieve the goal of 10,000 monthly sales for the i6 or a total of 20,000 monthly sales for pure electric models (i6/i8/Mega), immediate delivery of high-end versions and an aggressive pricing strategy are crucial.

The report states that while investors may worry this could dilute the 20% gross margin or impact L6 sales, Morgan Stanley believes this is currently the "lesser of two evils." The firm maintains an "overweight" rating on Li Auto with a target price of $36.

Intense Competition for i6, Pricing Strategy is Key

The Li i6 will compete in the fiercely competitive mid-to-large SUV market. According to Morgan Stanley's competitive analysis, the main competitors for the i6 include Aito M7, Xiaomi YU7, Tesla Model Y, XPeng G9, ZEEKR 7X, and Nio ES6.

In terms of product specifications, the i6 has a wheelbase of 3000 mm, equipped with one LiDAR and a Thor chip, with a CLTC range of 660-720 km. This configuration is competitive within its class, but the pricing pressure cannot be underestimated.

Morgan Stanley states that the pre-sale price of Aito M7 is 288,000-348,000 yuan, Xiaomi YU7 is priced at 254,000-330,000 yuan, Tesla Model Y is priced at 264,000-314,000 yuan, and XPeng G9 is priced at 249,000-279,000 yuan. Within this price range, Li i6 needs to find an appropriate market positioning.

Morgan Stanley believes that although Li Auto previously set the guide price for the i6 at 250,000-300,000 yuan, a more aggressive pricing strategy of 200,000-250,000 yuan combined with immediate delivery of high-end versions is more critical for achieving sales targets.

Urgent Upgrade of L Series, Intensified Competitive Pressure

Morgan Stanley states that the aging L series and weak sales remain a major issue for Li Auto. With new extended-range electric vehicle models being launched in the second half of the year, competition is further intensifying, requiring Li Auto to launch upgraded versions of the L series as soon as possible.

Morgan Stanley suggests that the L series upgrade should feature a completely new interior and exterior design and an 800V electric drive system. Although achieving this goal within this year may be somewhat difficult, it is clearly better to do it sooner rather than later Analysts point out that the timely upgrade of the L series should be the top priority for Li Auto. In the context of increasingly fierce competition in the new energy vehicle market, the speed of product updates directly relates to the maintenance of market share.

Morgan Stanley stated that Li Auto needs to quickly rebuild market confidence in its 2026 model cycle while maintaining its existing product strategy. This not only concerns short-term sales performance but also affects the company's long-term layout in the pure electric vehicle market.

There is room for stock price rebound

Morgan Stanley indicated that investors have been closely monitoring every move of Li Auto ahead of the upcoming i6 launch, which will provide the company with another opportunity in the electric vehicle race.

Against the backdrop of lowered expectations, Morgan Stanley seeks marginal improvements from the i6 launch to trigger a more meaningful stock price rebound. The stock has previously suffered heavy short selling, creating conditions for a rebound.

Morgan Stanley maintains an "overweight" rating on Li Auto, reflecting confidence in the company's long-term prospects. Despite facing short-term challenges, analysts believe that Li Auto still possesses competitive advantages in the electric vehicle transformation process, with the key being how to execute more precise market strategies.

Currently, Li Auto's price-to-earnings ratio is 21.7 times (based on 2024), and it is expected to drop to 19.7 times and 12.5 times in 2025 and 2026, respectively, indicating that valuation attractiveness is improving