Li Xiangthe tycoon behind Li Autoexperienced a unexpected fall in fortune, what he did to her lose almost half of his $10 billion wealth in just one month. The cause of this event is linked to fierce competition and business decisions that failed to attract investors.
The founder of the Chinese electric vehicle giant faces the difficult situation of a highly competitive market, a price war and the failure of his latest model. Below, we tell you how these factors took away much of his fortune in a surprisingly short time.
Who is Li Xiang
The billionaire is the founder and CEO of Li Autoan important Chinese electric vehicle manufacturer (VE), known for its focus on producing high-end hybrid and electric cars. His company has stood out in the sector for its ability to innovate and compete in a market dominated by big names like Tesla. The company was founded in 2015 with the aim of changing the landscape of electric mobility in Chinaand quickly grew, listing on the Nasdaq and gaining interest from investors around the world.
Li Xiang He began his career in the field of electric vehicles with a clear vision: create cars that combine luxury, advanced technology and energy efficiency. Under his leadership, his firm achieved the status of one of the most promising startups in the sector. However, in the last month, a series of unfortunate events have put both his fortune and the stability of his company at risk.
How Li Xiang lost half his wealth
The businessman experienced an almost immediate loss of his fortune due to a combination of unforeseen factors. First, fierce competition in the electric vehicle sector, especially following Tesla’s price cuts in China, caused a price war that seriously affected his company. To stay competitive, Li Auto was forced to lower the price of its older models by up to 5%which affected their profit margins.
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Furthermore, the launch of Its most anticipated model, the Li Mega, did not meet market expectations. Despite being a seven-seat minivan, its design and high starting price of $78,000 failed to attract consumers, reducing the company’s sales projections. This led the industry to adjust your vehicle delivery targets for the first quarterwith a significant reduction compared to previous estimates.
Added to these factors was a complicated economic contextwhere the increase in geopolitical tensionsespecially in the Middle East, affected global marketscausing investors to become more cautious and withdraw funds from riskier assets, such as stocks of technology companies and electric vehicles.
This complicated scenario resulted in a drastic drop in Li Auto shareswith a decline of more than 40% on the Nasdaq and 45% on the Hang Seng in Hong Kong. As analysts adjusted their expectations for the company, Li Xiang’s fortune plummeted, marking one of the most notable cases of financial losses in the technology sector in recent times.
Source: Ambito
