Chinese EV manufacturers have alleviated concerns over rising COVID-19 cases by delivering strong numbers in December. Li Auto (NASDAQ:LI) stock, for instance, met its expectations with 21,233 vehicle deliveries, marking 50.7% year-over-year growth.

This performance positions Li Auto as a promising player in the EV market, making it an attractive investment option.

Here’s more on why Li is among the leading EV companies on my radar right now, and why I think U.S. investors shouldn’t ignore this company.

A Closer Look at Li Stock

Li Auto was founded in 2015 by Li Xiang, who had previous success with Autohome. Unlike its competitors, Li Auto has proven to be a lucrative investment, with shares surging 80% since its launch in the U.S. market in 2020.

The company has demonstrated its ability to fulfill promises by producing high-quality electric cars at a profitable rate.

In 2021, Li Auto manufactured over 133,000 vehicles and has ambitious plans to produce 2 million cars by 2025, positioning itself on par with Tesla’s (NASDAQ:TSLA) current production levels.

Li Auto may not be a household name, but it has been making waves in the competitive Chinese electric vehicle market.

Initially, the Chinese government provided significant subsidies to EV companies, but as the industry matured, they reduced incentives. 

Chinese consumers now directly compare EVs with traditional gasoline-powered cars, and thanks to advancements in battery production, electric vehicles are gaining the upper hand in this comparison.

Li’s Advantages

Li Auto, like many other electric car manufacturers, relies on CATL as one of its battery suppliers, which holds a significant share of the global market. However, Li Auto diversifies its battery sourcing, allowing it to negotiate competitive prices with CATL.

The company’s latest model, the L7, costs around $47,000, comparable to Tesla’s Model Y. Li Auto’s first-quarter results have garnered attention, with impressive sales growth and profitability similar to Tesla.

The company achieved nearly double the sales of the previous year and generated $976 million in free cash flow.

Li Auto has achieved success in the Chinese market by introducing range-extended electric vehicles that eliminate range anxiety through various charging and refueling options.

The company focuses on premium SUVs and invests in vehicle design, intelligent systems, and autonomous driving technology.

Li Auto aims to differentiate its products and attract the premium market segment. The company has plans to launch its first fully battery-electric model in 2023, further expanding its offerings.

So Why Own LI Stock?

Li Auto is often compared to Tesla as it follows a similar strategy of targeting the high-end market, scaling production to reduce costs, and benefiting from China’s advanced infrastructure.

Unlike Tesla, Li Auto can leverage existing infrastructure in China, allowing it to maintain profitability and avoid the need for extensive exports.

With a market value of $28 billion, Li Auto has the potential to generate significant returns for shareholders in the coming years.

Indeed, I’m considering adding Li Auto, the “Chinese Tesla,” to my portfolio for its promising growth prospects.

On the date of publication, Chris MacDonald did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.