- Total Revenue: RMB28.8 billion, down 35% year-over-year, up 5.2% quarter-over-quarter.
- Vehicle Sales Revenue: RMB27.3 billion, down 36.1% year-over-year, up 4% quarter-over-quarter.
- Cost of Sales: RMB23.6 billion, down 33% year-over-year, up 3.3% quarter-over-quarter.
- Gross Profit: RMB5.1 billion, down 42.8% year-over-year, up 14.8% quarter-over-quarter.
- Vehicle Margin: 16.8%, compared to 19.7% last year and 15.5% in the prior quarter.
- Gross Margin: 17.8%, compared to 20.3% last year and 16.3% in the prior quarter.
- Operating Expenses: RMB5.6 billion, up 5.8% year-over-year, down 1.3% quarter-over-quarter.
- R&D Expenses: RMB3 billion, up 25.3% year-over-year, up 1.4% quarter-over-quarter.
- SG&A Expenses: RMB2.6 billion, down 14% year-over-year, down 4.4% quarter-over-quarter.
- Loss from Operations: RMB442.6 million, compared to RMB3.7 billion income last year and RMB1.2 billion loss in the prior quarter.
- Operating Margin: Negative 1.5%, compared to 8.4% last year and negative 4.3% in the prior quarter.
- Net Income: RMB20.2 million, compared to RMB3.5 billion last year and RMB624.4 million net loss in the prior quarter.
- Diluted Net Earnings per ADS: RMB0.01, compared to RMB3.31 last year and RMB0.62 net loss in the prior quarter.
- Cash Position: RMB101.2 billion at year-end.
- Net Cash from Operating Activities: RMB3.5 billion, compared to RMB8.7 billion last year and RMB7.4 billion in the prior quarter.
- Free Cash Flow: RMB2.5 billion, compared to RMB6.1 billion last year and negative RMB8.9 billion in the prior quarter.
- Employee Count: 30,728 at the end of 2025.
- Q1 2026 Vehicle Deliveries Outlook: Between 85,000 and 90,000 vehicles.
- Q1 2026 Revenue Outlook: Between RMB20.4 billion and RMB21.6 billion.
Release Date: March 12, 2026
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Li Auto Inc LI has optimized its sales network by closing underperforming locations and moving sales teams to higher potential areas, improving store productivity and sales per head.
- The company launched a store partner program, giving store managers decision-making power and profit-sharing, which is expected to enhance sales and operational efficiency.
- Li Auto Inc (LI) plans to launch the all-new L9 lineup with advanced features like 800-volt architecture and AI-powered engine oil maintenance, aiming to regain leadership in the flagship SUV segment.
- The company has seen a significant increase in orders for the Li i8, with a 33% rise in March compared to February, indicating strong market demand.
- Li Auto Inc (LI) is investing heavily in AI, with 50% of its R&D spending allocated to AI-related initiatives, positioning the company for future technological advancements.
Negative Points
- Total revenues in the fourth quarter were down 35% year-over-year, primarily due to lower vehicle deliveries.
- The vehicle margin decreased to 16.8% in the fourth quarter from 19.7% in the same period last year, affected by different product mix and lower average selling prices.
- Li Auto Inc (LI) reported a loss from operations of RMB442.6 million in the fourth quarter, compared to RMB3.7 billion income from operations in the same period last year.
- The company faces cost pressures from raw material inflation, particularly in batteries and memory chips, impacting unit vehicle costs.
- Li Auto Inc (LI) is operating in an increasingly competitive market, with more cars being released in the RMB200,000 and above segment than in previous years combined.
Q & A Highlights
Q: Can you clarify the rumors about Li Auto closing 100 stores and explain the store partner mechanism?
A: Xiang Li, Chairman and CEO, clarified that the rumor about closing 100 stores is false. Li Auto conducts routine optimization by phasing out underperforming stores. The core strategy is quality over quantity, focusing on top-tier shopping malls and premium auto parks. The new store partner program, launched on March 1, treats each store as a core business unit, delegating decision-making power and profit-sharing with store managers to motivate them as business operators. Significant improvements are expected by Q3.
Q: What is the launch timeline and pricing strategy for the new L9 and L9 Livis?
A: Xiang Li, Chairman and CEO, stated that the new L9 Livis will launch in Q2, equipped with in-house developed MAC 100 chips. The L9 features a fully revamped technical stack, including autonomous driving and a drive-by-wire system. The focus is on understanding the physical world through advanced AI models, providing a significant technological shift in autonomous driving and vehicle agility.
Q: How does Li Auto plan to balance sales volume and market share with margins in 2026?
A: Xiang Li, Chairman and CEO, emphasized a 20% year-on-year growth target despite a competitive market. The strategy includes a direct sales model, the launch of the L Series, and ramping up i6, i8, and i9 models. AI-related investments and overseas expansion are also key, with AI investments expected to enhance product differentiation and user experience.
Q: How is Li Auto addressing raw material cost inflation, particularly for batteries and memory chips?
A: Xiang Li, Chairman and CEO, explained that Li Auto is stabilizing pricing through long-term agreements with suppliers, optimizing costs across the value chain, and leveraging economies of scale. The company aims to absorb external cost pressures internally and maintain stable gross margins through proprietary technologies and rational pricing strategies.
Q: What is the strategic plan for embodied AI, and how does it relate to EVs, robotaxis, and humanoid robots?
A: Xiang Li, Chairman and CEO, stated that Li Auto is investing heavily in shared technological and product fronts, including inference chips and foundation models. The commercial approach will be cautious, adopting a startup model for new initiatives like AI glasses and robots, focusing on verified directions and gradual exploration.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
This stock alert was generated using automated technology and GuruFocus financial data to provide readers with timely and accurate market reporting. This content was reviewed by GuruFocus editorial team prior to publication. Please send any questions or comments about this story to [email protected].
