(Bloomberg) -- Li Auto Inc.’s first-quarter vehicle sales missed analyst estimates as deliveries of its first all-electric car fell short of its own targets. 

The Chinese automaker reported vehicle sales of 24.25 billion yuan ($3.4 billion) for the three months ended March 31, up 32% year-on-year but short of the 26.71 billion yuan analysts were looking for.

The company’s first-quarter net income was 1.3 billion yuan, Beijing-based Li Auto said in a statement Monday. Analyst expectations were for a 1.6 billion yuan profit, according to data compiled by Bloomberg.

Li Auto delivered 80,400 vehicles last quarter, including the first shipments of its first battery-electric model — the seven-seat MEGA van. Tepid demand for the van, which starts at 559,800 yuan, forced Li Auto to cut its quarterly delivery target to between 76,000 and 78,000 vehicles, from an earlier goal of 100,000 to 130,000 units. Before the release of the MEGA, Li Auto’s range consisted of extended-range EVs with a gasoline motor to charge the batteries. 

The automaker’s first-quarter gross margin came in at 20.6%, broadly in line with what it was 12 months ago. The company also said Monday that it now expects second-quarter revenue of between 29.9 billion yuan to 31.4 billion yuan, well down on the 38.6 billion yuan analysts had forecast.

Second-quarter vehicle deliveries are expected at 105,000 to 110,000 units versus the market’s expectation of some 130,692 units.

As well as disappointing sales of its new van, Li Auto is facing increased competition from new entrants into China’s EV market such as Huawei Technologies Co. and Xiaomi Corp., and a bruising price war as automakers seek to protect market share as the overall market slows. 

Read More: Tesla’s Price Cuts Trigger New Round in China EV Price War

Local media reported earlier this month that Li Auto has initiated job cuts impacting almost 20% of its workforce — which may amount to over 5,000 employees — mostly in sales, human resources and assisted driving. Those reported employee reductions follow rival Nio Inc., which cut 10% of its staff last year.

Li Auto’s US-listed shares fell 14% at 10:21 a.m. in New York. The stock was down 34% this year through May 17.

(Updates with share trading in final paragraph)

©2024 Bloomberg L.P.