Li Auto (理想汽车) Has Lost Its Sense of Rhythm

Results: worst showing since 2023

Li Auto (理想汽车) disclosed after the market close that 2025 was a shock year: full‑year deliveries fell to 406,343 vehicles, down 18.8% year‑on‑year, and the company reported total revenue of RMB 112.3 billion (1123亿元), a 22.3% decline. Net profit plunged to RMB 1.1 billion (11亿元), an 85.8% collapse from 2024. It has been reported that Q3 posted a RMB 624 million loss that ended an 11‑quarter profit streak, and although Q4 saw a modest rebound — 109,194 deliveries and a near‑break‑even net profit of RMB 20.2 million — the quarter still trailed prior‑year results steeply.

Why the stumble?

Two trends collided. The market shift away from range‑extender (增程) models — once Li Auto’s core advantage — accelerated in 2025 as pure‑electric vehicles (BEVs) captured the bulk of growth; domestic BEV sales rose 24.4% while range‑extender sales grew only 6.0%. Li’s flagship L‑series saw steep declines (L9 deliveries roughly halved to about 45,000, L8 and L7 down by roughly a third and >30% respectively) as rivals including Leapmotor (零跑), Xpeng (小鹏汽车) and Xiaomi (小米) ramped up. Meanwhile the company’s first pure‑electric flagship MEGA suffered from design and pricing controversy plus a 11,400‑unit recall, and MEGA deliveries missed targets badly — reportedly only 18,500 delivered against an 80,000 goal.

The counterpunch: tech and cash

Li Auto’s response is to double down on electrification and infrastructure. It has been reported that the company has accelerated in‑house "three‑electric" (motor, inverter, battery) development and by end‑2025 had built 3,907 fast‑charging stations with 21,651 chargers and deployed 5C ultra‑fast charge capability. Crucially, Li sits on a deep cash buffer — about RMB 101.2 billion (1012亿元) at year‑end — which management will likely use to fund R&D, product refreshes and marketing while it tries to scale BEV production and absorb recall and transition costs.

Outlook: tough fight ahead

The strategic pivot will be costly and slow. Li’s brand remains strongly associated with range‑extenders and large‑space comfort — useful assets but now less differentiating as rivals copy features and compete fiercely in the RMB 250–500k price band. Add in broader geopolitical pressures — U.S. export controls on advanced semiconductors and components that have pushed many Chinese automakers to accelerate self‑reliance — and the path to BEV competitiveness is more complex. Can Li Auto regain its rhythm and convert cash and charging footprint into sustained market share? The next two years will decide whether it can or whether the pure‑electric red sea of competitors will leave it trailing.