Li Auto Reports Significant Q4 Earnings Decline
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Mar 12 2026
0mins
Source: Benzinga
Li Auto Inc's stock fell 5.23% as it crossed below the 5-day SMA amid broader market weakness, with the Nasdaq-100 down 0.94% and the S&P 500 down 1.04%.
The company's Q4 2025 earnings report revealed a 35% year-over-year decline in revenue to 28.8 billion yuan ($4.11 billion), significantly missing analyst expectations of 42.8 billion yuan. This decline was driven by reduced deliveries and weak market demand, leading to a gross margin contraction from 19.7% to 16.8%. Additionally, Li Auto reported an adjusted operating loss of 188.4 million yuan ($26.9 million), a stark contrast to a profit of 4.2 billion yuan in the previous year, indicating severe profitability challenges. The company anticipates Q1 2026 revenue to decline further, projecting between 20.4 billion and 21.6 billion yuan, reflecting ongoing market difficulties.
These results highlight the significant pressures Li Auto faces in a competitive electric vehicle market, raising concerns about its future performance and market share. Investors will need to monitor how the company adapts to these challenges and its strategies for recovery.
Trade with 70% Backtested Accuracy
Stop guessing "Should I Buy LI?" and start using high-conviction signals backed by rigorous historical data.
Sign up today to access powerful investing tools and make smarter, data-driven decisions.
Analyst Views on LI
Wall Street analysts forecast LI stock price to rise
12 Analyst Rating
2 Buy
9 Hold
1 Sell
Hold
Current: 15.540
Low
15.00
Averages
20.51
High
32.00
Current: 15.540
Low
15.00
Averages
20.51
High
32.00
About LI
Li Auto Inc is a holding company primarily engaged in the design, development, manufacturing, and sales of smart electric vehicles. The Company’s main products include the Li L9, Li L8, Li L7, Li L6, and Li MEGA, encompassing six-seat sport utility vehicles (SUVs), five-seat SUVs, and multi-purpose vehicles (MPVs). The Company is also engaged in research and development activities relating to intelligent vehicle technologies, the design, development and manufacturing of various components and systems for new energy vehicles, and the provision of value-added services such as charging, vehicle maintenance and repair. The Company mainly conducts its businesses within domestic market.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Li Auto's Annual Shareholder Meeting Approves Resolutions
- Shareholder Meeting Resolutions: Li Auto held its annual shareholder meeting on May 29, 2026, in Beijing, where all proposed resolutions were adopted, marking a significant step in enhancing corporate governance and boosting shareholder confidence in the company's future.
- Amendment of Articles: The existing memorandum and articles of association were entirely replaced with the seventh amended version, which will improve operational flexibility and transparency, thereby attracting more investor interest.
- Board Re-election: Directors Donghui Ma, Tie Li, and Hongqiang Zhao were re-elected, ensuring continuity in strategic decision-making and enhancing management stability, which is crucial for the company's long-term vision.
- Share Issuance and Buyback Mandate: The board was granted a general mandate to issue and repurchase additional Class A ordinary shares, providing the company with flexibility for future capital operations and potentially increasing shareholder value while boosting market confidence.
See More
Li Auto (LI) Q1 2026 Earnings Transcript
See More
Li Auto Q1 2026 Earnings Call Insights
- Delivery Growth Trend: In Q1 2026, Li Auto's deliveries entered a growth trajectory, reclaiming the top sales position among Chinese brands in the new energy vehicle market priced above RMB 200,000 from January to April, indicating a recovery in market demand and enhanced brand competitiveness.
- Strong New Model Orders: The all-new Li L9 was launched on May 15 and began deliveries on May 17, securing over 10,000 orders within just two weeks at transaction prices exceeding RMB 500,000, reflecting robust demand in the high-end market and the brand's appeal.
- Declining Financial Performance: Total revenues for Q1 were RMB 23 billion, down 11.4% year-over-year and 20.1% quarter-over-quarter, with gross margin dropping to 7.9%, highlighting the negative impact of cost pressures and intensified market competition on profitability.
- Positive Future Outlook: The company expects deliveries in Q2 2026 to range between 95,000 and 100,000 vehicles, with gross margin anticipated to recover to about 10%, indicating management's ongoing confidence in new products and technologies aimed at achieving a full-year sales growth target of 20%.
See More
XPeng Reports Margin Improvement While Li Auto Declines in Q1
- XPeng Margin Improvement: XPeng's gross margin increased to 20.6% in Q1 from 15.6% a year earlier, indicating significant progress in cost control and product mix optimization, thereby enhancing its competitive position in the market.
- Li Auto Margin Decline: In contrast, Li Auto's gross margin fell to 7.9% in Q1 from 20.5% a year ago, reflecting challenges in its product mix and market strategy, which could impact future profitability.
- Delivery Volume Changes: XPeng's deliveries plummeted by 33% in Q1 to 62,682 units, while Li Auto's deliveries rose by 2.5% to 95,142 units, suggesting a divergence that may affect market share and investor confidence for both companies.
- Financial Performance Comparison: XPeng reported a net loss of RMB 1.78 billion in Q1, while Li Auto swung to a loss of RMB 2.3 billion from a profit last year, although both exceeded Wall Street expectations, the deteriorating financial conditions may negatively impact stock prices.
See More
Li Auto Reports Q1 2026 Earnings Results
- Financial Performance: Li Auto reported a Q1 non-GAAP EPADS of -$0.30 with revenues of $3.3 billion, an 11.4% year-over-year decline, yet beating expectations by $110 million, indicating resilience amid market challenges.
- Delivery Data: The company delivered 95,142 vehicles in Q1 2026, a 2.5% year-over-year increase, although total vehicle sales amounted to RMB 21.5 billion ($3.1 billion), down 12.7% from the previous year, reflecting intensified market competition.
- Margin Decline: Vehicle margin fell to 6.1% in Q1, significantly lower than 19.8% in the same quarter last year and 16.8% in the previous quarter, suggesting increased cost pressures that could impact future profitability.
- Cash Flow Situation: Net cash used in operating activities was RMB 6.1 billion ($883 million) in Q1, with free cash flow at negative RMB 7.4 billion ($1.1 billion), worsening from negative RMB 2.5 billion a year ago, highlighting risks related to liquidity constraints.
See More
Li Auto Q4 Earnings Analysis and Outlook
- Earnings Performance: Li Auto reported a non-GAAP EPS of -$0.30 for Q4 2025, aligning with expectations, while its revenue of $3.3 billion exceeded market forecasts by $110 million, indicating resilience in revenue growth amidst challenging conditions.
- Market Outlook: The company's outlook for Q1 2026 has sparked interest, with specific figures yet to be disclosed; however, the market remains cautiously optimistic about its growth potential, particularly in the context of a broader sector recovery.
- Competitive Landscape: Amidst the overall recovery in the electric vehicle sector, Li Auto's performance raises questions about its competitiveness, prompting investors to monitor its ongoing efforts in technological innovation and market share expansion.
- Investment Value: Despite being perceived as undervalued, Li Auto's financial performance and future outlook may attract value investors, especially given the rapid growth of the electric vehicle market, making its long-term investment potential noteworthy.
See More
Li Auto's Annual Shareholder Meeting Approves Resolutions
- Shareholder Meeting Resolutions: Li Auto held its annual shareholder meeting on May 29, 2026, in Beijing, where all proposed resolutions were adopted, marking a significant step in enhancing corporate governance and boosting shareholder confidence in the company's future.
- Amendment of Articles: The existing memorandum and articles of association were entirely replaced with the seventh amended version, which will improve operational flexibility and transparency, thereby attracting more investor interest.
- Board Re-election: Directors Donghui Ma, Tie Li, and Hongqiang Zhao were re-elected, ensuring continuity in strategic decision-making and enhancing management stability, which is crucial for the company's long-term vision.
- Share Issuance and Buyback Mandate: The board was granted a general mandate to issue and repurchase additional Class A ordinary shares, providing the company with flexibility for future capital operations and potentially increasing shareholder value while boosting market confidence.
See More
Li Auto (LI) Q1 2026 Earnings Transcript
See More
Li Auto Q1 2026 Earnings Call Insights
- Delivery Growth Trend: In Q1 2026, Li Auto's deliveries entered a growth trajectory, reclaiming the top sales position among Chinese brands in the new energy vehicle market priced above RMB 200,000 from January to April, indicating a recovery in market demand and enhanced brand competitiveness.
- Strong New Model Orders: The all-new Li L9 was launched on May 15 and began deliveries on May 17, securing over 10,000 orders within just two weeks at transaction prices exceeding RMB 500,000, reflecting robust demand in the high-end market and the brand's appeal.
- Declining Financial Performance: Total revenues for Q1 were RMB 23 billion, down 11.4% year-over-year and 20.1% quarter-over-quarter, with gross margin dropping to 7.9%, highlighting the negative impact of cost pressures and intensified market competition on profitability.
- Positive Future Outlook: The company expects deliveries in Q2 2026 to range between 95,000 and 100,000 vehicles, with gross margin anticipated to recover to about 10%, indicating management's ongoing confidence in new products and technologies aimed at achieving a full-year sales growth target of 20%.
See More
XPeng Reports Margin Improvement While Li Auto Declines in Q1
- XPeng Margin Improvement: XPeng's gross margin increased to 20.6% in Q1 from 15.6% a year earlier, indicating significant progress in cost control and product mix optimization, thereby enhancing its competitive position in the market.
- Li Auto Margin Decline: In contrast, Li Auto's gross margin fell to 7.9% in Q1 from 20.5% a year ago, reflecting challenges in its product mix and market strategy, which could impact future profitability.
- Delivery Volume Changes: XPeng's deliveries plummeted by 33% in Q1 to 62,682 units, while Li Auto's deliveries rose by 2.5% to 95,142 units, suggesting a divergence that may affect market share and investor confidence for both companies.
- Financial Performance Comparison: XPeng reported a net loss of RMB 1.78 billion in Q1, while Li Auto swung to a loss of RMB 2.3 billion from a profit last year, although both exceeded Wall Street expectations, the deteriorating financial conditions may negatively impact stock prices.
See More
Li Auto Reports Q1 2026 Earnings Results
- Financial Performance: Li Auto reported a Q1 non-GAAP EPADS of -$0.30 with revenues of $3.3 billion, an 11.4% year-over-year decline, yet beating expectations by $110 million, indicating resilience amid market challenges.
- Delivery Data: The company delivered 95,142 vehicles in Q1 2026, a 2.5% year-over-year increase, although total vehicle sales amounted to RMB 21.5 billion ($3.1 billion), down 12.7% from the previous year, reflecting intensified market competition.
- Margin Decline: Vehicle margin fell to 6.1% in Q1, significantly lower than 19.8% in the same quarter last year and 16.8% in the previous quarter, suggesting increased cost pressures that could impact future profitability.
- Cash Flow Situation: Net cash used in operating activities was RMB 6.1 billion ($883 million) in Q1, with free cash flow at negative RMB 7.4 billion ($1.1 billion), worsening from negative RMB 2.5 billion a year ago, highlighting risks related to liquidity constraints.
See More
Li Auto Q4 Earnings Analysis and Outlook
- Earnings Performance: Li Auto reported a non-GAAP EPS of -$0.30 for Q4 2025, aligning with expectations, while its revenue of $3.3 billion exceeded market forecasts by $110 million, indicating resilience in revenue growth amidst challenging conditions.
- Market Outlook: The company's outlook for Q1 2026 has sparked interest, with specific figures yet to be disclosed; however, the market remains cautiously optimistic about its growth potential, particularly in the context of a broader sector recovery.
- Competitive Landscape: Amidst the overall recovery in the electric vehicle sector, Li Auto's performance raises questions about its competitiveness, prompting investors to monitor its ongoing efforts in technological innovation and market share expansion.
- Investment Value: Despite being perceived as undervalued, Li Auto's financial performance and future outlook may attract value investors, especially given the rapid growth of the electric vehicle market, making its long-term investment potential noteworthy.
See More
