Here's a classic move from the corporate playbook: when your stock price has been taking a beating, buy some of it back. That's exactly what Chinese electric vehicle maker Li Auto Inc. (LI) is doing, announcing on Tuesday that its board has approved a share repurchase program worth up to $1 billion.
The company will be buying back its own Class A ordinary shares and/or American depositary shares through March 31, 2027. In the official corporate-speak, this is about "reinforcing investor confidence and supporting shareholder returns." In plain English, it's the company saying, "We think our stock is cheap, and we're putting our money where our mouth is."
Chairman and CEO Xiang Li put it this way: "The share repurchase program reflects our strong confidence in Li Auto's strategic roadmap and future value creation, and will ultimately benefit the company and create value for our shareholders."
How the Buyback Will Work
So how does a company actually go about spending a billion dollars on its own stock? Li Auto says the repurchases will happen periodically through open market transactions at prevailing prices, block trades, or other legally permitted methods. The timing and size will depend on market conditions, and everything will be done by the book, complying with SEC rules.
The board plans to review the program regularly and can adjust, suspend, or terminate it as needed. The company expects to fund all this buying using its existing cash reserves—no borrowing needed.
Importantly, the company already has the green light from shareholders. At its annual general meeting back in May 2025, shareholders approved a general mandate allowing the board to repurchase shares. That mandate will remain in effect until the next AGM. After that, Li Auto will need to go back to shareholders for renewed approval to keep the buyback program going.
The Stock's Rough Ride
Now, here's why this buyback announcement matters: Li Auto's stock has had a tough year. Shares were up about 4.9% to $17.97 on Tuesday when the news broke, but that's after falling 31.4% over the past 12 months. The stock is trading much closer to its 52-week low of $15.71 than its high of $32.02.
From a technical analysis perspective, things look mixed. The stock is trading slightly above its 20-day and 100-day simple moving averages, which suggests some improvement in the short-to-intermediate trend. But the Relative Strength Index sits at 45.68—firmly in neutral territory—while the MACD indicator remains in bearish territory. Analysts watching the charts point to $19.00 as key resistance and $17.00 as key support.
