Q2 2026 Li Auto Inc. Earnings Call Transcript
Key Points
- Li Auto Inc (LI) maintained its position as the top-selling Chinese automotive brand in the RMB200,000 and above NEV market, with a balanced product mix of 50% EREV and 50% BEV.
- The company successfully completed a full refresh of its L series, with high-end models like the L9 Ultra exceeding expectations, accounting for over 85% of L9 sales.
- Li Auto Inc (LI) is making significant progress in its overseas expansion, with plans to launch in Dubai, Europe, and right-hand drive markets, and has formed a strategic partnership for local assembly in Kazakhstan.
- The company's in-house MACH M100 chip has shipped over 50,000 units, and its ADAS system, MACH VLA, has shown a 20% performance improvement and nearly doubled mileage penetration in urban scenarios.
- Li Auto Inc (LI) maintains a robust cash position of RMB87.5 billion, providing flexibility for investments in technology and shareholder returns through share repurchases.
- The upcoming launches of the new Li MEGA and Li i9 are expected to enrich the BEV lineup and drive further growth, with BEV models anticipated to account for a larger share of sales.
- Li Auto Inc (LI) experienced a significant decline in vehicle margin to 9.4% in Q2 2026, down from 19.4% year-over-year, due to product mix and cost pressures.
- The company reported a net loss of RMB1.7 billion in Q2 2026, a sharp reversal from a net income of RMB1.1 billion in the same period last year.
- Rising costs for raw materials, including lithium carbonate, memory chips, and PCBs, have created temporary cost pressures, impacting gross margins.
- The model refresh cycle caused temporary operational headwinds, including clearing old inventory and ramping up new models, which disrupted sales.
- Free cash flow remained negative at RMB1.3 billion in Q2 2026, and the company's ability to achieve positive free cash flow for the full year depends on Q4 delivery performance.
- The company faces uncertainties in overseas markets due to geopolitical risks and regulatory challenges, which could impact its expansion plans.
Hello, ladies and gentlemen. Thank you for standing by for Li Auto's second-quarter 2026 earnings conference call. At this time, all participants are in listen-only mode. Today's conference call is being recorded. I will now turn the call over to your host, Ms. Janet Zhang, Investor Relations Director of Li Auto. Please go ahead, Janet.
Thank you, operator. Good evening and good morning, everyone. Welcome to Li Auto's second-quarter 2026 earnings conference call. The company's financial and operating results were published in a press release earlier today and were posted on the company's IR website.
On today's call, we will have our Chairman and CEO, Mr. Xiang Li, and our CFO, Mr. Johnny T. Lee, to begin with prepared remarks. Our President, Mr. Dong Hui Ma, and CTO, Mr. Yan Xie, will join for the Q&A discussion. Before we continue, please be reminded that today's discussion will contain forward-looking statements made under the Safe Harbor provision of the US Private Securities Litigation
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