Li Auto reported a second-quarter net loss of 1.71 billion yuan ($251.3 million) on Wednesday, its second consecutive quarterly loss, as revenue fell 15.1% from a year earlier to 25.67 billion yuan.
The loss narrowed 25.1% from the first quarter, and follows a fourth quarter of 2025 in which the company scraped a net profit of 20.2 million yuan.
The Beijing-based maker of extended-range and battery-electric SUVs delivered 98,330 vehicles in the quarter, down 11.5% year over year and up 3.4% from the first quarter.
Guidance for the current quarter is where the report gets interesting.
Li Auto expects third-quarter deliveries of 95,000 to 100,000 vehicles, growth of 1.9% to 7.3% against the 93,211 it delivered a year earlier.
Deliveries in the first half ran 5.1% below the same period of 2025, at 193,472 against 203,938, so the guided range would mark a turn.
Revenue for the same quarter is guided at 26.6 billion to 28.0 billion yuan, a year-over-year change of negative 2.8% to positive 2.3%.
More cars, in other words, and possibly less money.
The Guidance Arithmetic
The two bands are not independent, and the way they are constructed is unusually explicit.
Divide the low end of the revenue band by the low end of the delivery band and the result is 280,000 yuan per vehicle.
Divide the high end by the high end and the result is 280,000 yuan per vehicle again, to the yuan.
In the second quarter just reported, Li Auto generated 261,000 yuan of total revenue per delivered vehicle, by EV‘s calculation from the release.
In the third quarter of 2025, the comparable figure was about 293,600 yuan.
The Quarter
Vehicle sales fell 16.7% year over year to 24.07 billion yuan, a steeper decline than deliveries, which is the same per-unit story in the reported numbers rather than the guided ones.
Average selling price, calculated as vehicle sales divided by deliveries, was about 244,800 yuan in the second quarter against 260,100 yuan a year earlier and 226,300 yuan in the first — down 5.9% year over year, up 8.1% sequentially.
Vehicle margin was 9.4%, against 19.4% in the second quarter of 2025 and 6.1% in the first quarter of 2026.
Gross margin was 11.0%, and the company attributed the change in both measures to product mix.
Operating expenses barely moved, falling 2.0% year over year to 5.14 billion yuan while revenue fell 15.1%, and research and development spending was flat at 2.78 billion yuan.
Held against a shrinking top line, that flat R&D line rose to 10.8% of revenue from 9.3% a year earlier.
Selling, general and administrative expenses fell 16.2% year over year on lower employee compensation, and rose 11.2% sequentially on marketing and promotion.
Loss from operations was 2.30 billion yuan against income of 827.0 million yuan a year earlier, an operating margin of negative 9.0% against positive 2.7%.
An income tax benefit of 243.6 million yuan narrowed the net loss to below the operating loss.
The Margin Question
Chief Financial Officer Tie Li told investors the company anticipates “further margin expansion for the second half of the year as our product mix optimizes, with a higher sales contribution from the Livis trim and the launch of refreshed BEV models and Li i9.”
The mix argument runs into the product calendar.
Livis is the upper trim of the refreshed L-series, priced at 429,800 yuan on the new L8 against 369,800 yuan for the Ultra version, and a heavier Livis mix would indeed lift the per-unit figures.
The model expected to carry second-half volume, though, is the new L6, launched in July at 249,800 yuan — the cheapest vehicle in the lineup and the one Deutsche Bank singled out as the larger volume driver among the refreshed models, as reported by EV in July.
That price is unchanged from the outgoing L6, and it held despite a report by local outlet Leiphone, covered by EV last month, that the next-generation model’s per-vehicle cost had risen by more than 14,000 yuan on memory chip and lithium carbonate prices.
Li Auto has not confirmed that cost figure, and a company absorbing a cost increase without a price increase on its volume model is not obviously the same company delivering mix-led margin expansion.
Pulling the other way is September, which Li Auto said Wednesday will bring a concentrated product rollout: the next-generation MEGA and the all-new Li i9 launching in China, and the next-generation Li L9 launching in Dubai.
All three land inside the guided quarter, and all three sit at the top of the range rather than the bottom.
The i9 measures 5,225 millimetres and would be the largest SUV Li Auto has built, positioned above the i8.
The MEGA is the company’s flagship MPV, with the next-generation version appearing in Chinese regulatory filings at 5,355 millimetres and a launch date reported as September 2; the L9 in China carries a starting price of 459,800 yuan, with the Livis version at 559,800 yuan.
Prices and volume expectations for the new models have not been disclosed, and launches falling in September contribute a fraction of a quarter’s deliveries, so the rollout enters the outlook as an upward force on revenue per vehicle of unstated size against the L6’s downward one.
The Dubai launch is also the first time the refreshed L9 reaches a Gulf showroom, following the company’s May statement that an overseas-specific version would arrive in Central Asia and the Middle East in the third quarter.
Chairman and chief executive Xiang Li said the new L6 “generated robust order flow,” without attaching a number to it.
The chief executive said the company has completed the upgrade of the L series, but refreshed versions have been launched only of the L9, in May, the L8, in June, and the L6, in July.
The Cash Line
Net cash provided by operating activities was 15.0 million yuan in the second quarter, against 3.04 billion yuan used a year earlier and 6.09 billion yuan used in the first quarter.
The swing to positive is real and the magnitude is not: 15.0 million yuan against 25.67 billion yuan of revenue is less than one-tenth of one percent, and the company attributed the change to timing differences between customer receipts and inventory payments rather than to anything structural.
Free cash flow remained negative at 1.30 billion yuan, an improvement on negative 3.84 billion a year earlier and negative 7.39 billion in the first quarter, with capital expenditure of 1.32 billion yuan.
Cash position was 87.5 billion yuan ($12.9 billion) at June 30, on a company definition that includes time deposits, short-term investments and certain long-term instruments.
On that same measure the figure stood at 101.2 billion yuan at the end of December, making the decline over six months 13.7 billion yuan, or 13.5%.
Within it, cash and cash equivalents alone fell to 40.12 billion yuan from 56.69 billion, while short-term borrowings were cut to 286.2 million yuan from 6.22 billion and long-term borrowings roughly doubled to 6.86 billion.
Total shareholders’ equity declined to 66.0 billion yuan from 73.1 billion over the same six months.
Under a one billion US dollar buyback announced on March 24, the company repurchased 41,232,100 Class A ordinary shares for 2.1 billion Hong Kong dollars on the HKEX and 9,487,026 ADSs for 150.9 million US dollars on Nasdaq during the quarter, bringing cumulative spending to approximately 631.5 million US dollars.
The July Start
Li Auto delivered 30,468 vehicles in July. Hitting the guided range requires 64,532 to 69,532 vehicles across August and September, a monthly pace of 32,266 to 34,766 — between 5.9% and 14.1% above July.
Product Line Head Li Xinyang said on Weibo that production of the fully electric i6 was cut by roughly 4,000 units against plan in mid-to-late July because of temporary fluctuations in headlight supply.
The i6 took 69.4% of June deliveries at 21,453 units, so a four-figure production shortfall on that model is not a marginal event.
Whether that constraint has cleared is not addressed in the release, and a supply problem resolved in August would make the required pace considerably easier than the arithmetic suggests.
The retail footprint contracted slightly over the same month, to 490 stores in 159 cities at July 31 from 495 in 160 cities at June 30, while the charging network grew to 4,141 stations from 4,097.
The Annual Target
Li Auto set a 20% growth target for 2026 earlier in the year, implying roughly 490,000 deliveries against the 406,343 it managed in 2025, as EV reported in May.
First-half deliveries of 193,472, plus the top of the third-quarter range, would leave 194,140 vehicles to be delivered in the fourth quarter.
That is 77.8% above the 109,194 of the fourth quarter of 2025 and 22.3% above the 158,696 of the fourth quarter of 2024, the best quarter in the company’s history.
Wednesday’s release does not repeat the 20% target, mention an annual figure, or withdraw one.
The overseas business is the stated route to volume growth, with the next-generation L9 due in Dubai in September, the i6 due in Europe through the Benelux region in the second half and a Paris Motor Show debut in October, an expansion EV traced to a Netherlands job posting in June.
