Li Auto Inc. (NASDAQ:LI) has announced a recall of around 10,000 of the Li One EV models over a suspension issue. The recall affects almost half of the vehicles that the electric car maker has sold this year.
The recall affects 10,469 cars
The EV manufacturer indicated in a statement that it will begin replacing for free “the control arm ball joint of the front suspension” of 10,469 Li One SUVs. The replacement commences on November 7, 2020, and will affect SUVs manufactured on or before June 1, 2020. According to the Beijing-based EV startup, they expect to finalize the replacement within the next three months. Li Auto started mass manufacturing of the Li One SUVs in November last year and delivered 21,852 cars to date.
The company said that the recall as per the Chinese State Administration for Market Regulation’s (SAMR) requirements. After June 1, 2020, the Li Ones manufactured are equipped with the latest control arm ball joint of the front suspension version. The move to recall previous models is a voluntary recall, which is part of the company following the SAMR regulations. It is similar to the vehicle upgrade plane announced and proactively initiated at the beginning of this month.
Li Auto concerned about the safety of its customers
Since Li Auto is a user-driven automotive and tech enterprise, the company considers its users a priority. As a result, Li Auto will continue putting more efforts to offer users more convenient, safer, and value added products.
Although the company said that it is an upgrade it will be making on the cars, the move has been criticized and received a lot of backlash. However, the company says that accepting and facing a problem to offer an efficient solution is the path the automaker is ready to take.
Following the announcement, Li Auto shares retreated, but Citi analysts are still bullish about Chinese electric car manufacturing stocks. They initiated coverage of Li Auto and expect the company to break even by 2022.