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    LI
    Earnings call· Mar 2026(Q1 FY26)

    Li Auto Q1 FY26 earnings call LI

    May 28, 2026 Source

    Executive summary

    Li Auto Q1 FY26 — L9 Launch and AI Chip Deployment Drive Growth

    Li Auto navigated a challenging Q1 FY26 marked by product mix shifts and seasonal factors, impacting revenues and margins. However, the company demonstrated strong product momentum with the successful launch of the all-new Li L9, securing significant orders and deploying its proprietary AI chip and model. Management remains focused on completing its model refresh cycle, optimizing production ramp-up, and expanding its international footprint while targeting a full-year sales growth of 20%.

    Highlights

    5

    • Li Auto returned to the top sales position among Chinese brands in the NEV market priced at RMB 200,000 and above from January to April.

    • Monthly sales of the BEV model, Li i6, stabilized at 20,000 units per month, ranking top 3 among all BEV SUVs.

    • The all-new Li L9 Livis secured over 10,000 orders with transaction prices over RMB 500,000 within just two weeks of its launch.

    • Successfully deployed proprietary Maho M100 chip and MINDVLA model, establishing a long-term technological moat.

    • Maintained a strong cash position of RMB 94.3 billion at quarter-end.

    Concerns

    5

    • Total revenues in Q1 were RMB 23 billion, down 11.4% year-over-year and 20.1% quarter-on-quarter, mainly due to lower average selling price from product mix and seasonal factors.

    • Gross profit in Q1 was RMB 1.8 billion, down 66% year-over-year and 54.8% quarter-on-quarter.

    • Gross margin decreased to 7.9% in Q1, compared to 20.5% in the same period last year and 17.8% in the prior quarter, primarily due to product mix.

    • Reported a net loss of RMB 2.3 billion in Q1, compared to net income in the same period last year and the prior quarter.

    • Net cash used in operating activities was RMB 6.1 billion and free cash flow was negative RMB 7.4 billion in Q1.

    Guidance & targets

    14
    CategoryTargetConfidence
    Full year sales growth
    20%
    high materiality
    High
    Vehicle deliveries
    95,000 and 100,000 vehicles
    high materiality
    High
    Total revenues
    RMB 24.1 billion and RMB 25.4 billion
    high materiality
    High
    Gross margin
    about 10%
    high materiality
    Medium
    L9 deliveries
    around 8,000 units
    medium materiality
    Medium
    L9 deliveries
    reach delivery level over the previous generation outline
    medium materiality
    High
    L9 Livis market share
    over 20%
    medium materiality
    High
    L9 Ultra market share
    20%
    medium materiality
    Medium
    Humanoid robots full-scale commercialization
    more than 3 years
    low materiality
    Medium
    International market entry (Middle East and Central Asia)
    entering in Q3
    medium materiality
    High
    International market entry (Southeast Asia)
    gradually entering markets like China, Cambodia, Lao and Myanmar
    medium materiality
    High
    All-electric VI6 introduction
    in Europe
    medium materiality
    High
    Right-hand drive Li Mega launch
    in key Asia Pacific markets, including Hong Kong, Mainland China -- Hong Kong, China and Singapore
    medium materiality
    High
    Autonomous driving performance
    match the performance of Tesla's FSDB 14
    high materiality
    Medium

    Operational metrics

    22
    Total revenues
    RMB 23 billiondown 11.4% year-over-year and 20.1% quarter-on-quarter
    Q1 FY26

    Mainly driven by lower average selling price due to different product mix and seasonal factors.

    Vehicle sales
    RMB 21.5 billiondown 12.7% year-over-year and 21% quarter-over-quarter
    Q1 FY26

    Year-over-year decrease due to lower average selling price from product mix; sequential decrease due to reduced vehicle deliveries from seasonal factors and lower average selling price.

    Cost of sales
    RMB 21.2 billionup 2.7% year-over-year and down 10.4% quarter-over-quarter
    Q1 FY26
    Gross profit
    RMB 1.8 billiondown 66% year-over-year and 54.8% quarter-over-quarter
    Q1 FY26
    Vehicle gross margin
    6.1%versus 19.8% in the same period last year and 15.8% in the prior quarter
    Q1 FY26

    Year-over-year and sequential decrease mainly due to different product mix.

    Gross margin
    7.9%versus 20.5% in the same period last year and 17.8% in the prior quarter
    Q1 FY26
    Operating expenses
    RMB 4.8 billiondown 4.8% year-over-year and 13.8% quarter-over-quarter
    Q1 FY26
    R&D expenses
    RMB 2.7 billionup 8.3% year-over-year and down 9.8% quarter-over-quarter
    Q1 FY26
    SG&A expenses
    RMB 2 billiondown 19% year-over-year and 22.6% quarter-over-quarter
    Q1 FY26

    Year-over-year and sequential decrease mainly due to decreased employee compensation and reduced marketing/promotion activities.

    Loss from operations
    RMB 3 billionversus RMB 271.7 million income from operations in the same period last year and RMB 442.6 million loss from operations in the prior quarter
    Q1 FY26
    Operating margin
    -13%versus 1% in the same period last year and -1.5% in the prior quarter
    Q1 FY26
    Net loss
    RMB 2.3 billionversus RMB 646.6 million net income in the same period last year and RMB 20.2 million net income in the prior quarter
    Q1 FY26
    Diluted net loss per ADS attributable to ordinary shareholders
    RMB 2.26versus diluted net earnings of RMB 0.62 in the same period last year and RMB 0.01 in the prior quarter
    Q1 FY26

    The transcript stated '2.26%', which is corrected to RMB 2.26 based on context of prior period values.

    Net cash used in operating activities
    RMB 6.1 billionversus RMB 1.7 billion used in the same period last year and RMB 3.5 billion provided in the prior quarter
    Q1 FY26
    Cash position
    RMB 94.3 billion
    Q1 FY26

    Quarter-end balance.

    Share repurchase program authorization
    USD 1 billion
    announced March

    Total authorization for share repurchase program.

    Shares repurchased
    17.5 million
    to date

    Total shares repurchased under the program.

    Consideration for shares repurchased
    USD 148.4 million
    to date

    Total consideration for shares repurchased under the program.

    Maho M100 chip computing power effect
    3x
    current

    Compared to the previous generation platform.

    Maho M100 chip effective computing power
    6x
    current

    Compared to the previous generation platform.

    MINDVLA model parameters increase
    tenfold
    current

    Compared to the previous version of the model.

    Maho M100 chip development time
    4 years
    program start to vehicle production

    Time taken to bring the in-house developed chip to vehicle production.

    Industry KPIs

    6
    MetricValueDetails
    Order book backlogover 10,000orders
    Average transaction price—
    Autonomous robotaxi metricsmatch Tesla's FSDB 14
    Vehicle deliveries wholesales95,000 to 100,000units
    Energy storage battery capacity72.7kilowatt hour
    Ev unit volumes mix segment economics20,000units

    Product announcements

    4
    ProductTypeDetails
    All-new Li L9 (Livis and Ultra versions)launch
    All-new Li L8launch
    All-electric VI6expansion
    Right-hand drive Li Megalaunch

    Deals & partnerships

    1
    Saudi Arabia and UAE distributorsDistribution partnership

    Officially signed contracts. In the Middle East and Central Asia market, the L Series (range extender product line) will be the main product offer. The first product will be an overseas dedicated all-new Li L9, optimized for local conditions.

    Risks & headwinds

    2
    Supply constraints for L9 componentsMay and June (ramp-up period)

    Two-tone body color and some unique parts are slightly supply constrained.

    Mitigation: Working around the clock with core suppliers to come up with solutions to ensure timely delivery.

    Impact of model refresh cycle and product mix on profitabilityQ1 FY26

    Q1 gross margin was 7.9%, down from 20.5% YoY and 17.8% QoQ. Vehicle gross margin was 6.1%, down from 19.8% YoY and 15.8% QoQ. Total revenues down 11.4% YoY and 20.1% QoQ.

    Mitigation: Launch and delivery of all-new L9 expected to recover gross margin to about 10% in Q2. Full-year expects continued improvement as model refresh cycle completes and production ramps up.

    Q&A highlights

    8

    Inquiring about the L9's order performance, production ramp-up, and its expected contribution to Q2 deliveries.

    The L9 Livis accounts for over 90% of orders, demonstrating strong demand above RMB 500k. Production capacity for L9/L8 is flexible, with May/June ramp-up to 4,000-5,000 units/month. Supply constraints exist for two-tone body color and unique parts. Expects ~8,000 L9 deliveries in Q2, with Q3 reaching previous generation levels.

    “The top-selling lived version accounts for over 90% of all orders and the already fully loaded Ultra version accounts for the other less than 10%, which reflects the customer recognition of our latest advanced technology and the willingness to pay for features and performance and which also showcased our steady foothold in the market above RMB 500,000, which is a very positive trend for the brand.”

    asked by Tim Hsiao · answered by Xiang Li

    2 min read6 chapters

    Detailed Narrative

    01

    Product Portfolio Refresh and Market Positioning

    Li Auto is undergoing a significant product refresh, starting with the all-new Li L9, which aims to secure a flagship position in the NEV SUV market above RMB 400,000. The L9 Livis has already captured over 10,000 orders in two weeks, demonstrating strong demand for its advanced technology. The upcoming all-new Li L8, a 5-seater flagship SUV, is designed to complement the L9 and further strengthen the company's high-end market presence, with its launch planned for late June 2026.

    02

    Proprietary AI Hardware and Software Deployment

    A key milestone for Li Auto is the mass production deployment of its proprietary Maho M100 chip and MINDVLA model. This full-stack hardware-software solution, built on a 5-nanometer automotive-grade AI inference chip, provides a significant technological moat with 3x the effective computing power per unit cost. The company plans a dedicated event in June to showcase advancements in software and embodied AI, including in-cabin interaction and autonomous driving.

    03

    Autonomous Driving System Advancements

    The new ADAS 9.0 version, powered by the M100 chip, offers significant improvements in complex scenarios with more human-like control and smoother driving. The platform enables higher precision data collection and larger algorithms, driving faster leaps in autonomous driving capabilities. The company aims to match Tesla's FSDB 14 performance in the US by the second half of the year, leveraging its integrated hardware and software design.

    04

    Impact of Store Partner Program

    The rollout of the store partner program has empowered store managers with decision-making authority and profit-sharing rights, shifting their mindset to business operators focused on ROI and long-term user cultivation. Despite Q1 being a low season, pilot stores have beaten monthly sales targets, cleared previous generation L Series inventory, and increased user satisfaction, indicating positive early results for operational efficiency and core management team stability.

    05

    International Expansion Strategy

    Li Auto is pursuing a paced internationalization strategy, adapting its market entry model (subsidiaries, local dealerships, sole distributors) based on local conditions. The company has signed contracts with distributors in Saudi Arabia and UAE, planning to enter the Middle East and Central Asia with the L Series in Q3. Southeast Asian markets will also see gradual entry, and the all-electric VI6 is slated for Europe in H2, with right-hand drive Li Mega versions for key Asia Pacific markets by year-end.

    06

    Competitive Landscape in AI and Robotics

    Management views competition in the mid-to-high-end car segment as a 'body AI' competition, with deeply integrated chips and large foundational models as core differentiators. The in-house developed chips create a significant technological barrier, making replication difficult due to vertical integration. While humanoid robots are seen as a future standardized labor force for any company, full-scale commercialization is still more than three years away due to unresolved technological challenges.

    AI-generated summary of the company’s earnings call. Not investment advice.