A Chinese electric vehicle (EV) maker has stood out from the crowd. It has grown by selling extended-range electric vehicles (EREVs), which use a small onboard gasoline engine to extend the vehicle’s range. But Li Car (LI -16.12%) At the beginning of the year, the company also launched its first purely electric model.

Investors had hoped that the all-electric Li Mega would boost sales starting in the second quarter. But Li’s second-quarter earnings report showed vehicle sales only rose 8.4% year over year. This and other factors caused the stock to plunge following the quarterly report. Li Auto shares were down 15.9% as of 12:45 p.m. ET on Wednesday.

Li Auto is a profitable manufacturer of electric vehicles

The electric car manufacturer reported better-than-expected results for the second quarter. It earned about $0.10 per share, slightly above analysts’ expectations. Sales of about $4.4 billion were in line with estimates, according to FactSet ResearchThis makes Li one of the few profitable global manufacturers of electric vehicles.

But investors are reacting today to the headwinds that still exist. The vehicle margin has declined both year-on-year and in the previous quarter. This is a result of lower vehicle prices. In their press release, both CEO Xiang Li and CFO Tie Li spoke of “intense” market competition.

The company recently expanded its EREV lineup with its first all-electric vehicle, the Mega, a seven-seat multi-purpose vehicle, launched in March. But investors are somewhat disappointed with the launch, given the stiff competition in a market that is growing more slowly than many expected.

Management expects higher vehicle deliveries and higher sales in the third quarter. But for now, investors are staying away from Li Auto shares, probably until the situation improves.