Li Auto Q2 2026 Earnings Call Summary

1Key Financial Results and Metrics

Total Revenues: RMB 25.7 billion, down 15.1% year-over-year but up 11.7% quarter-over-quarter.

Vehicle Sales: RMB 24.1 billion, down 16.7% year-over-year, up 11.8% quarter-over-quarter.

Gross Profit: RMB 2.8 billion, down 53.3% year-over-year, up 56.9% quarter-over-quarter.

Vehicle Margin: 9.4%, down from 19.4% year-over-year.

Net Loss: RMB 1.7 billion, compared to a net income of RMB 1.1 billion in Q2 2025.

Cash Position: RMB 87.5 billion, providing flexibility for investments and share repurchases.

Free Cash Flow: Negative RMB 1.3 billion, improved from negative RMB 3.8 billion year-over-year.

2Strategic Updates and Business Highlights

Product Refresh: Completed updates to the L-Series, incorporating advanced technologies like the MACH M100 chip and 5C supercharging.

Sales Performance: The Li i6 has been a top seller in its segment for six consecutive months. The new Li MEGA and Li i9 are set to launch soon, expanding the BEV lineup.

Technology Development: Continued focus on in-house development of batteries and chips, with plans to equip all models with proprietary batteries in the coming months.

ADAS Progress: The MACH M100 chip has been deployed across multiple models, enhancing autonomous driving capabilities.

3Forward Guidance and Outlook

Q3 2026 Deliveries: Expected to be between 95,000 and 100,000 vehicles.

Q3 2026 Revenue Forecast: Anticipated to be between RMB 26.6 billion and RMB 28.0 billion.

Long-term Strategy: Focus on maintaining a top 3 position in the RMB 200,000+ passenger vehicle market, with an increasing share of BEV sales.

4Bad News, Challenges, or Points of Concern

Year-over-Year Declines: Significant decreases in revenue and net income compared to Q2 2025, raising concerns about market competitiveness.

Margin Pressure: Gross margin fell to 11.0% from 20.1% year-over-year, attributed to a less favorable product mix and rising commodity costs.

Operational Headwinds: Temporary disruptions due to model refresh cycles, including inventory clearance and sales policy transitions.

Commodity Cost Inflation: Rising costs of raw materials and components, particularly batteries and semiconductors, pose ongoing challenges.

5Notable Q&A Insights

Market Performance of L-Series: The refreshed L-Series has exceeded sales expectations, with high demand for the L9 model.

Response to Commodity Costs: Management is focused on operational efficiencies and leveraging in-house technology to mitigate cost pressures without passing increases to customers.

International Expansion: Steady progress in overseas markets, with plans to launch in the Middle East and Europe, while navigating geopolitical and regulatory challenges.

Investment in R&D: Commitment to ongoing investment in in-house chip and battery development to strengthen competitive advantages in the evolving market landscape. This summary encapsulates the key aspects of Li Auto's Q2 2026 earnings call, highlighting both the achievements and challenges faced by the company as it navigates a competitive landscape.