(Bloomberg) -- Li Auto Inc. swung to a profit last year after deep discounting to fend off rising competition in the Chinese electric vehicle market spurred better-than-expected sales during the fourth quarter.

The automaker reported net income of 11.8 billion yuan ($1.6 billion) last year, making it the first of the three major Chinese EV upstarts — ahead of Xpeng Inc. and Nio Inc. — to post an annual profit after vehicle shipments more than doubled.

Despite Li Auto’s better-than-expected performance, it’s still too early to say which carmakers will emerge as winners in China’s hyper-competitive market. The Beijing-based company’s models are mostly extended-range EVs — battery-powered vehicles with a gasoline engine that kicks in to recharge the cell when it’s out of juice. Tesla and Nio make fully electric cars only.

Li Auto’s revenue more than doubled to 41.7 billion yuan in the fourth quarter — better than analysts had expected. It also delivered a record number of vehicles during the period and generated a gross margin of 23.5%. By comparison, Tesla’s gross margin was 17.6% last quarter.

The company’s ADRs jumped as much as 8.9% in US premarket trading on Monday. Shares in US-listed Li Auto are down 7% this year after rising around 84% last year.

But Li Auto’s forecast for revenue in the current quarter is slightly below analyst projections. Compared to the final three months of last year, vehicle deliveries are expected to shrink to as many as 103,000 units.

China’s new-energy vehicle sales more broadly are off to a sluggish start this year, hampered by weaker economic growth and lukewarm consumer sentiment. February sales of plug-in hybrids and fully electric cars probably slumped 43% month-on-month, China’s Passenger Car Association said last week.

The manufacturer plans to deliver its first battery-electric model — a seven-seater multipurpose vehicle — in March and targets having a lineup of 11 models by 2025.

Eight of them will be ready by the end of this year, Chief Executive Officer Li Xiang said during an earnings call. He reiterated a goal to sell 800,000 vehicles this year and said Li Auto will not launch any model below 200,000 yuan in the next five years.

(Updates with performance of Li’s ADRs in fifth paragraph.)

©2024 Bloomberg L.P.