Another electric vehicle (EV) producer is getting ready to ride the artificial intelligence (AI) wave. Li Auto (NASDAQ:LI) has announced a new partnership with Nvidia (NASDAQ:NVDA) to help usher in the next phase of autonomous driving. DRIVE Thor, a new centralized car computer from Nvidia, will power the Chinese automaker’s next fleet of EVs. After a difficult past few quarters, Li could certainly use a positive catalyst to kickstart the new year. Thankfully, joining forces with one of the world’s leading AI companies is a great way for LI stock to begin a turnaround and make up the ground it lost in 2023.
This isn’t Li’s first time working with Nvidia. It has previously used the company’s Drive Orin system-on-a-chip (SoC) in its vehicles, as have fellow Chinese EV producers Nio (NYSE:NIO) and XPeng (NYSE:XPEV). But now, the AI leader is working on an even more advanced system that stands to help push us toward a driverless future.
What’s Happening With LI Stock
So far, news of the Nvidia partnership hasn’t helped boost LI stock. As of this writing, shares are down 3% for the day and aren’t showing signs of an imminent rebound. However, that is due more to general market momentum than anything else. Many Chinese EV stocks are down today, including NIO and XPEV.
Last week, LI stock dropped on news that the company would be delaying a key EV launch. Li Auto needs to turn things around in 2024 if it wants to show investors that it is still worth betting on. Thankfully, this development is likely to accomplish exactly that. Described as the “next-generation centralized car computer,” Drive THOR will include many essential functions into a single AI computing platform. Nvidia vice president of automotive Xinzhou Wu recently addressed this revolutionary new product, stating:
“The transportation industry is embracing centralized compute for highly automated and autonomous driving. The AI car computer of choice for today’s intelligent fleets is NVIDIA DRIVE Orin, with automakers increasingly looking to the advanced capabilities and AI performance of its successor, NVIDIA DRIVE Thor, for their future vehicle roadmaps.”
This type of partnership comes at a time when LI stock is trading at low levels. Even after surging in late December 2023, it is still down more than 6% for the month. That could make for a tempting entry point for investors who don’t mind a little risk. Beaten-down EV stocks are due for a comeback as market conditions improve in 2024. Additionally, Li stands to benefit from the anticipation for its MEGA multi-purpose vehicle, scheduled for release in March.
When Li introduces Nvidia’s new technology to its vehicles, sales are likely to surge as consumers take advantage of these AI advances. All these factors put LI stock in an excellent position to keep rising in the coming year.
On the date of publication, Samuel O’Brient did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
