Li Auto Q2 2026 Earnings Show Narrower Loss and Revenue Recovery

Li Auto Q2 2026 Earnings Show Improved Quarterly Performance

Li Auto Q2 2026 earnings showed that the company remained unprofitable in the second quarter, although its financial performance improved sequentially from the first quarter. The company reported a net loss of 1.7 billion yuan ($251 million), compared with net income of 1.1 billion yuan a year earlier. The loss narrowed about 26% from 2.3 billion yuan in the first quarter. Second-quarter revenue reached 25.7 billion yuan, down 15.1% year-over-year but up 11.7% from the previous quarter, while vehicle sales revenue declined 16.7% year-over-year to 24.1 billion yuan.

Vehicle Deliveries Decline Year-Over-Year

Li Auto delivered 98,330 vehicles during the second quarter, representing an 11.5% year-over-year decline but a 3.4% increase from the first quarter. The delivery result landed in the upper half of the company's guidance range of 95,000 to 100,000 vehicles. The company attributed lower vehicle sales revenue to reduced deliveries and lower average selling prices resulting from changes in its product mix. The quarterly delivery trend also shows that 2026 second-quarter deliveries remained below the 111,074 vehicles reported during the same quarter of 2025.

Li Auto Quarterly Deliveries, 2024-2026

The quarterly delivery data highlights the change in Li Auto's sales trajectory across 2024, 2025, and 2026. Deliveries increased from 80,400 vehicles in the first quarter of 2024 to 108,581 in the second quarter before reaching 152,831 and 158,696 in the third and fourth quarters. In 2025, deliveries were 92,864 in the first quarter and 111,074 in the second quarter, followed by 93,211 and 109,194 in the final two quarters. The 2026 first-quarter and second-quarter figures were 95,142 and 98,330 vehicles, respectively.

Margins Recover but Remain Below Prior-Year Levels

Li Auto's profitability metrics improved from the first quarter but remained significantly weaker than the year-earlier period. Vehicle margin recovered to 9.4% from 6.1% in the first quarter, although it was still well below the 19.4% recorded a year earlier. Overall gross margin increased to 11.0% from 7.9% sequentially, compared with 20.1% in the second quarter of the prior year. Second-quarter gross profit declined 53.3% year-over-year to 2.8 billion yuan, but increased 56.9% from the first quarter as the company benefited from improvements associated with newer products.

Operating Loss Persists Despite Lower Expenses

New products helped improve sequential profitability, but the benefit was not sufficient to offset continued pressure from sales volumes and vehicle pricing. Operating expenses declined 2.0% year-over-year to 5.1 billion yuan, yet Li Auto still reported an operating loss of 2.3 billion yuan. That compared with operating income of 827 million yuan a year earlier. The results indicate that lower expenses alone have not been enough to restore profitability, leaving higher vehicle volumes, stronger pricing, and an improved product mix as important factors for margin recovery.

Cash Flow Improves as Cash Reserves Decline

Cash flow performance improved sharply during the second quarter. Operating cash flow turned to a net inflow of 15 million yuan, compared with a net outflow of 6.1 billion yuan in the first quarter. Free cash flow remained negative at 1.3 billion yuan, but improved substantially from negative 7.4 billion yuan in the previous quarter. At the end of June, Li Auto held 87.5 billion yuan in cash reserves, down 6.8 billion yuan from the end of March. The company also continued returning capital through share repurchases.

Share Repurchases Continue During the Quarter

During the second quarter, the company spent HK$2.1 billion and $150.9 million on share repurchases in Hong Kong and the United States, respectively. As of the earnings release date, approximately $631.5 million of its $1 billion share buyback program had been used. The repurchases occurred while the company was still reporting a quarterly net loss and negative free cash flow, although operating cash flow had returned to a small positive amount. The scale of the repurchases therefore remains an important part of the company's capital allocation activity alongside investments in products and future growth.

Third-Quarter Guidance Points to Limited Growth

For the third quarter, the company guided for vehicle deliveries of 95,000 to 100,000 units, representing year-over-year growth of 1.9% to 7.3%. Revenue guidance was set at 26.6 billion yuan to 28.0 billion yuan, corresponding to a year-over-year change ranging from a decline of 2.8% to growth of 2.3%. The midpoint of the delivery guidance implies that quarterly volumes will remain broadly flat compared with the second quarter. The guidance therefore points to a gradual recovery rather than a rapid return to the higher delivery levels seen during earlier periods.

New Models Are Central to the Margin Recovery Strategy

The company is counting on refreshed battery electric vehicle models, the Li L6, and the upcoming Li i9 to improve its product mix and support future performance. CFO Tie Li expects margins to expand further during the second half as higher-priced Livis variants contribute a larger share of sales, while refreshed battery electric vehicle models and the Li i9 enter the market. The strategy depends on new and updated products generating stronger pricing and mix benefits while also helping stabilize deliveries. Whether those products can materially improve profitability will depend on customer demand and execution.

Full-Year Delivery Target Creates Fourth-Quarter Pressure

If Li Auto maintains its full-year delivery target of approximately 490,000 vehicles, the company would need to deliver about 196,500 to 201,500 vehicles in the fourth quarter. That requirement would represent a substantial increase compared with the quarterly volumes expected in the third quarter and would leave significant sales pressure concentrated at the end of the year. The ability of refreshed battery electric vehicles, the Li L6, the Li i9, and higher-priced Livis variants to strengthen demand will therefore be critical to closing the gap between current deliveries and the full-year objective.

Frequently Asked Questions

What did Li Auto report for the second quarter?
Li Auto reported a second-quarter net loss of 1.7 billion yuan, while revenue reached 25.7 billion yuan. Vehicle deliveries totaled 98,330 units, down 11.5% year-over-year but up 3.4% from the first quarter. Vehicle margin improved to 9.4% from 6.1% sequentially, while overall gross margin increased to 11.0% from 7.9%. Operating cash flow also improved, turning into a 15 million yuan inflow compared with a 6.1 billion yuan outflow in the first quarter, although free cash flow remained negative.