A Li L9 Livis on display at the Beijing Auto Show in April 2026. Credit: CnEVPost
- Li Auto’s first-quarter net loss reached 2.3 billion yuan ($330 million), ending its previous streak of profitability.
- The company expects second-quarter deliveries of up to 100,000 vehicles, trailing the guidance of rivals Nio and Xpeng.
Li Auto (NASDAQ: LI) reported disappointing first-quarter financial results, with the company unexpectedly posting a massive loss in the first three months of 2026.
In the first quarter, Li Auto’s net loss reached 2.3 billion yuan ($330 million), according to unaudited financial results released on Thursday. By comparison, the company achieved a net income of 647 million yuan in the same period of 2025.
Li Auto’s first-quarter revenue fell 11.4% year-on-year to 23 billion yuan.
In the first quarter, Li Auto delivered a total of 95,142 vehicles, exceeding the upper end of its previous quarterly delivery guidance of 85,000 to 90,000 units.
The delivery volume represented a 2.45% year-on-year increase, but a 12.87% decline from the fourth quarter of 2025.
Li Auto Quarterly Deliveries 2024-2026
Quarter
2024
2025
2026
Q1
80,400
92,864
95,142
Q2
108,581
111,074
Q3
152,831
93,211
Q4
158,696
109,194
Li Auto quarterly deliveries
2024
2025
2026
The sharp deterioration in profitability was primarily attributed to a massive contraction in vehicle margins.
Li Auto’s gross margin plummeted to 7.9% in the first quarter from 20.5% a year earlier. This reflected a lower average selling price due to a different product mix, as well as an intense market price war.
The company’s cash flow was also directly hit by the sales slowdown. Li Auto’s operating cash flow in the first quarter was a negative 6.09 billion yuan. Meanwhile, its free cash flow dropped to a negative 7.39 billion yuan, highlighting short-term liquidity pressures.
Li Auto’s outlook for the second quarter appeared relatively conservative, expecting vehicle deliveries to be between 95,000 and 100,000 units, representing a year-on-year decrease of 10.0% to 14.5%.
The company projected second-quarter revenue to be between 24.1 billion yuan and 25.4 billion yuan, representing a year-on-year decline of 20.2% to 16.0%.
The guidance implies that Li Auto currently expects combined deliveries for May and June to be between 60,915 and 65,915 vehicles.
This weak guidance stands in stark contrast to its local rivals. Nio Inc (NYSE: NIO) expects its second-quarter deliveries to reach up to 115,000 vehicles and maintained an adjusted operating profit in the first quarter.
Xpeng (NYSE: XPEV) also forecast a strong rebound in its second-quarter deliveries to a maximum of 106,000 units, despite a widened net loss in the first quarter.
To reverse the current downturn and regain market share, Li Auto is accelerating the pace of new product launches.
The company officially launched the updated Li L9 extended-range SUV (sport utility vehicle) in mid-May, and management hopes this new model will boost sales in the second half of the year.
Li Xiang, founder, chairman, and CEO of Li Auto, said the company’s organizational and supply chain optimizations delivered concrete results in the first quarter. He said that the launch of the all-new Li L9 will consolidate the company’s benchmark position in the flagship SUV market.
As of the end of the first quarter, the company’s cash reserves stood at 94.3 billion yuan, providing a buffer to weather industry headwinds.
Nio reported an adjusted operating profit (non-GAAP) of RMB 66.8 million ($9.7 million) for the first quarter of 2026.
