Li Auto, the Chinese electric vehicle maker, saw its stock surge over 6% in pre-market trading on Monday after China announced a major shift in its monetary policy stance for the first time in nearly 14 years.
China's top leaders led by President Xi Jinping have signaled a move towards a "moderately loose" monetary policy for 2025, marking a significant departure from the "prudent" approach the country has maintained since 2011. This policy shift is expected to usher in greater economic stimulus measures, including lower interest rates and easier lending conditions.
As an EV maker, Li Auto is poised to benefit from this policy shift. Improved access to credit can facilitate business expansion, while more affordable financing options can stimulate consumer demand for electric vehicles. The market reacted positively to this news, with Li Auto and other Chinese EV stocks rallying in anticipation of favorable conditions.
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