Li Auto Faces Significant Decline in Q3 Earnings Amidst Competitive Pressures
Shenzhen, Jan. 9, 2026 (GLOBE NEWSWIRE) – In the third quarter of 2025, Li Auto (NYSE: LI; HKEX: 2015) reported a staggering net loss of RMB 625 million (approximately USD 89.3 million), marking an end to its 11 quarters of profitability. This dramatic downturn was predominantly driven by a recall of 11,400 Li Auto MEGA vehicles announced on October 1, 2025.
Financial Overview: Q3 Results and Future Forecasts
Li Auto's vehicle sales revenue fell to RMB 25.9 billion (around USD 3.7 billion), a sharp decline of 37.4% compared to RMB 41.3 billion (approximately USD 5.9 billion) from Q3 2024. Total deliveries dropped to 93,211 units, down 39.0% year-over-year (YoY).
The total revenue for the quarter was recorded at RMB 27.4 billion (approximately USD 3.914 billion), representing a 36.2% decrease from RMB 42.9 billion (around USD 6.129 billion) in Q3 2024, and down 9.5% quarter-over-quarter (QoQ) from RMB 30.2 billion (about USD 4.314 billion) in Q2 2025. The reported net loss was RMB 624.4 million (USD 87.7 million).
Li Auto is projected to face continued difficulties, with expected deliveries in Q4 2025 ranging from 100,000 to 110,000 units, indicating a troubling YoY decline of 37.0% to 30.7%.
Challenges in the Competitive Landscape
The ongoing transition to battery electric vehicles (BEVs) poses a significant challenge for Li Auto. Increased competition from established brands, including Tesla and NIO, has intensified market pressures, compromising Li Auto's previous advantages. To remain viable, Li Auto must hasten its BEV development and broaden its delivery timelines while managing production capabilities effectively.
While Li Auto retains its competitive edge in Extended-Range Electric Vehicles (EREVs), the need for swift delivery improvements of its BEV models is critical. However, the company is grappling with significant supply chain challenges, as evidenced by only 18% of total deliveries in Q3 consisting of the newly launched models i6 and i8. Li Auto aims to escalate the i6's production capacity to 20,000 units per month by early 2026, but the ongoing supply chain instability remains a pressing concern.
Diversification Efforts Amidst Financial Headwinds
In an effort to pivot beyond its core automotive business, Li Auto has launched several initiatives, including new divisions focused on "Space Robotics" and "Wearable Robotics." The recent introduction of its AI smart glasses, named Livis, priced at RMB 1,999 (approximately USD 285.57), encountered a tepid response in a crowded market dominated by competitors such as RayNeo, Xiaomi, and Huawei.
The AI smart glasses market is highly competitive, making differentiation and consumer engagement critical for Li Auto’s new products. The lukewarm market acceptance of Livis exposes the challenges the company faces in entering new sectors.
Future Projections and Strategic Directions
According to Aurora Mobile - MoonFox, Li Auto's current market conditions indicate a sustained competitive environment where immediate improvements in model lineup and production capacity are unlikely. For Q4 2025, the anticipated revenue is projected at RMB 26.5 billion (approximately USD 3.786 billion), reflecting a 40% YoY decline.
Despite the challenges, Li Auto's core user engagement, as indicated by high app usage metrics, presents an opportunity for the company to leverage its loyal consumer base, emphasizing the importance of strengthening product competitiveness in its primary auto manufacturing business.