Li Auto (LI) Q1 2026 Earnings Transcript
Li Auto reported a Q1 2026 net loss of RMB 2.3 billion, with revenues dropping 11.4% YoY to RMB 23 billion due to lower vehicle deliveries and model mix shifts. The company launched its new Li L9 SUV, securing over 10,000 pre-orders in two weeks, while guiding Q2 deliveries at 95,000–100,000 units and revenue between RMB 24.1–25.4 billion.
Li Auto released its Q1 2026 earnings, showing a net loss of RMB 2.3 billion, a reversal from the RMB 646.6 million net income recorded in the same period last year. Total revenues fell 11.4% year-over-year to RMB 23 billion, driven by an 11.4% decline in vehicle deliveries and a lower average selling price. Vehicle sales revenue dropped 12.7% YoY to RMB 21.5 billion, while gross profit plummeted 66% YoY to RMB 1.8 billion, reflecting margin compression from a shift toward lower-margin models. The company reported an operating loss of RMB 3 billion, down from a RMB 271.7 million profit in Q1 2025, with an operating margin of negative 13%. Operating expenses decreased 4.8% YoY to RMB 4.8 billion, primarily due to reduced employee compensation and marketing spend. However, R&D expenses rose 8.3% YoY to RMB 2.7 billion, while SG&A expenses declined 19% YoY to RMB 2 billion. Free cash flow turned negative at RMB 7.4 billion, compared to a positive RMB 2.5 billion in Q4 2025, as operating cash flow reversed to a RMB 6.1 billion outflow. Despite financial challenges, Li Auto maintained its top position in China’s NEV market for vehicles priced above RMB 200,000, with BEV Li i6 sales stabilizing at 20,000 units per month. The company launched its new Li L9 SUV on May 15, securing over 10,000 pre-orders for the Livis trim within two weeks. The L9, priced above RMB 500,000, is expected to sustain over 20% market share in the RMB 500,000+ NEV SUV segment. Production is ramping up at the Changzhou base, with combined monthly output for the L9 and L8 targeting 4,000–5,000 units by May–June. Li Auto also introduced its in-house MAHE M100 AI inference chip, the first mass-produced 5nm chip in China, integrated into the L9. The chip enables a tenfold increase in model parameters for the MindVLA large model and claims to triple effective computing power per unit cost. The company repurchased 17.5 million Class A shares for USD 148.1 million under a USD 1 billion program initiated in March, maintaining a cash position of RMB 94.3 billion. For Q2 2026, Li Auto guided deliveries between 95,000–100,000 vehicles and total revenue between RMB 24.1–25.4 billion. The company also implemented a Store Partner Program, granting store managers decision-making and profit-sharing rights to improve operational stability. The CFO, Tie Li, indicated expectations for gross margin recovery in Q2, though no specific targets were provided.
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