Produced by Leida Finance | Text by Ding Yu | Edited by Meng Shuai

Li Auto, which claimed the top sales spot among new energy vehicle startups in 2024, delivered a less-than-satisfactory performance in 2025.

According to Li Auto's latest financial report, the company achieved revenue of 112.3 billion yuan in 2025, down 22.3% year-on-year; net profit suffered a severe blow, declining 85.8% year-on-year to 1.139 billion yuan.

Looking ahead to 2026, Li Xiang revealed that the company's sales target is to achieve over 20% year-on-year growth (with sales exceeding 488,000 units).

However, in the first two months of the year, Li Auto's delivery performance was lackluster, with monthly delivery volumes decreasing by 7.5% and increasing slightly by 0.6% year-on-year, respectively.

In the capital markets, Li Auto's stock price on the Hong Kong Stock Exchange has generally trended downward since the second half of last year. As of the market close on March 13, the company's stock price stood at HK$67.9 per share, significantly down from its peak of HK$138.3 per share since last year.

Li Xiang, as the company's leader, has also seen his wealth affected. On the 2026 Hurun Global Rich List released in March this year, Li Xiang's net worth was listed at 27.5 billion yuan.

Compared to the 40 billion yuan recorded in the 2025 Hurun China Rich List released in October last year, Li Xiang's net worth has decreased by 12.5 billion yuan in less than six months, a decline of over 30%.

Declines in Revenue and Net Profit Put Pressure on Li Auto's Performance

During the financial report conference call, Li Xiang admitted, 'The past year has been an important period of strategic adjustment for Li Auto.'

The financial report shows that Li Auto's delivery performance in 2025 was unsatisfactory, with approximately 406,300 vehicles delivered, a decrease of 18.8% compared to the previous year.

A deeper analysis of the delivery data reveals that the decline in Li Auto's deliveries was concentrated in the second half of last year. The company delivered 93,200 and 109,200 vehicles in the third and fourth quarters of last year, respectively, down 39% and 31.2% year-on-year.

The significant decline in deliveries led to a 23% year-on-year decrease in Li Auto's full-year vehicle sales revenue to 106.7 billion yuan. Meanwhile, the company's automotive gross profit margin also declined by 1.9 percentage points to 17.9% last year.

The dual declines in vehicle sales revenue and vehicle gross profit margin, like dominoes, further impacted the company's overall performance.

In 2025, Li Auto achieved revenue of 112.3 billion yuan, down 22.3% year-on-year; net profit was 1.1 billion yuan, a sharp decline of 85.8% year-on-year.

More What's serious is (Note: ' severe ' is kept as a Chinese term for emphasis, but translated in context below), in 2025, Li Auto's operating profit even turned from profit to loss, shifting from a profit of 7 billion yuan in the previous year to a loss of 520 million yuan.

Focusing on a quarterly basis, Li Auto's situation was equally concerning. In the fourth quarter of last year, Li Auto's revenue decreased by 35% year-on-year to 28.8 billion yuan; net profit plummeted by 99.4% year-on-year to 20 million yuan.

Among them, Li Auto's vehicle sales revenue in the fourth quarter of last year decreased by 36.1% year-on-year to 27.3 billion yuan; the vehicle gross profit margin also fell to 16.8% from 19.7% in the same period last year.

However, facing such a severe situation, Li Xiang remained optimistic, stating, 'After the proactive strategic adjustments in 2025, we have begun to see positive changes in organizational efficiency, supply capabilities, and the sales system since the fourth quarter, including improved store efficiency, alleviated production capacity issues for the Li Auto i6, and a rebound in sales for the Li Auto i8.'

It is worth mentioning that in terms of last year's full-year performance, Li Auto's cost-reduction and efficiency-enhancement strategies were effectively implemented. In 2025, the company's operating expenses were 21.5 billion yuan, down 5% year-on-year.

Among them, selling, general, and administrative expenses were 10.7 billion yuan, down 12.8% year-on-year, mainly due to a reduction in employee compensation as a result of recognizing CEO performance-based share payment compensation expenses in 2024.

However, Li Auto did not cut its investment in research and development. The company's R&D expenses last year were 11.3 billion yuan, up 2.2% year-on-year.

Previously, some media outlets stated that Li Auto allocated 50% of its R&D expenses to AI-related fields last year.

In response, the company's CFO, Li Tie, said, 'We do not view the automotive business and AI business as separate sectors. Instead, we integrate AI capability development into the company's overall business model, and all R&D investments will serve the upgrade of the existing business system.'

Li Tie also revealed that in 2026, the company's R&D expenses are expected to remain at around 12 billion yuan, with AI-related investments still accounting for about 50%, mainly covering directions such as self-developed chips, computing infrastructure, and autonomous driving systems.

It is noteworthy that entering 2026, Li Auto's delivery performance still faces severe challenges. In January and February this year, Li Auto delivered 27,700 and 26,400 vehicles, respectively, down 7.5% and up slightly by 0.6% year-on-year.

Li Auto expects vehicle deliveries in the first quarter of this year to be between 85,000 and 90,000 units, down 8.5% to 3.1% year-on-year; total revenue is expected to be between 20.4 billion and 21.6 billion yuan, down 21.3% to 16.7% year-on-year.

Formulating the '3+2' Strategy and Introducing the Store Partner Mechanism

In the increasingly competitive new energy vehicle market, Li Auto is at a critical juncture in its development, and Li Xiang, as the company's leader, has presented his own solutions.

To achieve the goal of over 20% sales growth in 2026, Li Auto has formulated the core '3+2' strategy.

First are the three core pillar strategies: 1. Strengthen sales system management. In Li Auto's view, efficient management of the direct-sales system is key to building the company's long-term core competitiveness.

2. Promote the successful refresh of the L-series, with the L9 as the core. Every link, from product launch and production ramp-up to delivery services, must be executed properly.

3. Facilitate the stable increase in pure electric vehicle sales. Li Xiang vowed that whether it's the Li Auto L6, L8, Mega, or the pure electric flagship L9 to be launched in the second half of the year, past issues such as supply and product launches must be thoroughly resolved to establish Li Auto's pure electric products in the mid-to-high-end market.

Next are the two auxiliary strategies: 1. Transform investments in the intelligent field into differentiated product experiences. Over the past few years, Li Auto has continuously invested in the intelligent field, allocating significant resources to chips, models, and technology research.

This year, these investments will be transformed into tangible, differentiated product experiences that are proactive, high-frequency, and naturally integrated into users' daily driving scenarios.

2. Accelerate the pace of overseas market expansion. Li Xiang believes that this year marks the inaugural year of Li Auto's formal overseas layout, which is also a crucial long-term growth opportunity for the company.

At the sales level, Li Auto's president, Ma Donghui, pointed out that the core idea of Li Auto's channel layout in 2026 is 'quality over quantity.'

According to him, the company will still open new stores this year, and these new stores will be prioritized in prime locations such as top-tier shopping malls and high-quality auto cities to enhance brand influence and attract high-quality customer traffic.

In terms of city layout, Li Auto's channel network in lower-tier cities is already relatively complete. Subsequently, the company will focus on densifying its layout in higher-tier cities in line with the increase in pure electric vehicle sales.

At the same time, Li Auto will continue to enhance the delivery experience, covering the entire process from store reception and test drives to deliveries, as well as dedicated staffing at highway supercharging stations during holidays.

It is worth noting that Ma Donghui also specifically mentioned that the company officially launched the 'Store Partner Mechanism' in early March. The core of this mechanism is to treat stores as basic business units and create a direct-sales model with Li Auto's unique characteristics.

Specifically, Li Auto will adhere to the direct-sales model to ensure unified service experiences and pricing policies nationwide.

At the same time, by delegating operational decision-making power and profit-sharing rights to store managers, the company aims to stimulate the team's business awareness and vitality, with operational decision-making power including customer acquisition autonomy, operational autonomy, and team management autonomy.

It is reported that Li Auto's assessment method for store managers will also change, shifting from the previous single sales volume assessment to an assessment of the store's overall business results.

'We hope store managers will treat the store as their own business,' Ma Donghui believes that this mechanism can fundamentally address past issues such as blind store openings and blind expansion of store exhibitions; for future new store locations, store managers will be fully involved in the assessment process, with assessment responsibilities directly tied to individuals, thereby improving store operating quality from the source.

It is worth mentioning that during the financial report conference call, Ma Donghui also responded to rumors circulating online that Li Auto would close 100 stores, stating, 'The rumor of closing 100 stores is not true.'

However, Ma Donghui also emphasized, 'We have always been closing and replacing a small number of inefficient stores that fail to meet sales targets,' adding that 'this is part of normal business optimization.'

According to the information disclosed in the financial report, as of February 28 this year, Li Auto had 539 retail centers in 160 cities across the country and operated 548 after-sales service centers and authorized service centers in 223 cities.

In comparison, as of the end of 2025, Li Auto had 548 retail centers in 159 cities across the country and operated 561 after-sales service centers and Li Auto authorized body and paint centers in 224 cities.

Continuing to Advance Self-Research Strategies to Address Cost Challenges

Leida Finance noticed that during the financial report conference call, the term 'self-research' became a frequent buzzword among Li Auto's executives, run through (Note: ' run through ' is kept as a Chinese term for emphasis, but translated in context below) in their explanations of various key issues.

Currently, the rising prices of core components such as batteries and memory chips have imposed significant cost pressures on automotive companies. Facing this challenge, Li Auto is attempting to respond through a series of self-research initiatives.

Ma Donghui pointed out that the company's self-developed and self-manufactured range extenders, electric drive power modules, self-developed and contract-manufactured domain controllers, silicon carbide power chips, as well as the Mach 100 intelligent driving chip and customized in-vehicle Pad, have played a crucial role in cost control.

Li Auto's Chief Technology Officer, Xie Yan, revealed that the Mach 100 chip has successfully achieved mass production and will be delivered to the market alongside the new generation of Li Auto L9 series.

Li Xiang also praised the new generation of Li Auto L9 equipped with the Mach 100 chip, stating, 'The reason this model is defined as an embodied intelligent product is that we have completed the reconstruction of the entire technical system from three dimensions: perception, brain, and body.'

Xie Yan further elaborated on the three significant values brought by the Mach 100 chip in terms of cost reduction and efficiency enhancement.

1. The material cost of a single chip is significantly lower than externally sourced solutions.

2. By replacing the MCU controllers of the previous platform with the Mach 100 chip, combined with Li Auto's in-vehicle operating system virtualization technology, each vehicle can save over 1,000 yuan in costs.

3. Relying on a dataflow architecture and joint design of the chip and model, the chip's operating efficiency has been significantly improved, and ample space has been reserved for future performance upgrades.

In addition to core components such as chips, Li Auto also emphasized its automotive battery strategy, stating that it will always adhere to the principle of open cooperation and work hand in hand with industry-leading partners while firmly grasping the initiative.

Ma Donghui revealed that in 2026, all Li Auto models will be equipped with batteries from the Li Auto brand and the CATL brand. Based on full-stack self-research technology, a stringent quality control system, and long-held values, Li Auto will provide reliable guarantees for users.

Leida Finance noticed that in an official Q&A released in July last year, Li Auto stated that the battery showcased at the Li Auto i8 launch event, which had undergone rigorous testing, was a 90.1-degree 5C ternary lithium battery produced by Sunwoda for Li Auto using a self-developed and contract-manufacturing model.

It is worth mentioning that in February this year, Zeekr recalled over 38,000 vehicles due to alleged battery safety hazards, which may be related to a lawsuit filed by Geely (Geely)'s VREX Electric against a subsidiary of Sunwoda over alleged quality issues with the delivered battery cells.

However, Ma Donghui emphasized, 'Regardless of the battery supplier, the performance, quality, and safety of their products must meet Li Auto's unified standards to ensure a completely consistent user driving experience.'

As 2026 unfolds, whether Li Xiang can lead Li Auto to achieve its sales targets and reverse its performance downturn remains to be seen. Leida Finance will continue to monitor the situation.