In response to Shanghai's announcement that it will no longer issue free license plates for plug-in hybrid electric vehicles (PHEVs) starting in 2023, Li Auto said on February 25 that it is within the company's expectations and will have little impact on it.

The Shanghai government recently announced that it will no longer issue dedicated license quotas for PHEVs and extended-range electric vehicles (EREVs) starting January 1, 2023.

Li Auto co-founder and president Shen Yanan said in an earnings call on Thursday, "The introduction of the policy in Shanghai was within our expectation and was implemented even later than we anticipated."

As a result of the policy, more people will choose to buy electric vehicles (EVs), PHEVs, and EREVs by 2023, so LiAuto sees sales growth in 2022.

Deliveries in Shanghai are a very small percentage of its 2020 deliveries, so the impact of this policy is also relatively small, Shen said.

Cities in China without license restrictions will reach 55 percent of cumulative deliveries by 2022, Shen said, adding that Li Auto's battery electric vehicle (BEV) will be available in 2023.

Li Auto has recently launched its EV program, with the first product scheduled for release in 2023, Chinese media outlet LatePost reported Wednesday.

Li Auto's new model will still use extended-range technology until the electric vehicle is launched, the report said, adding that the company will launch a new version of the Li ONE within the year.

Li Auto's IPO prospectus indicates that it will launch a second production vehicle in 2022, which will be a full-size SUV with extended-range technology.

Shanghai will no longer issue free license plates for plug-in hybrid vehicles starting in 2023

(Source: Li Auto)