Li Auto Reports Q4 Core Business Loss, Net Profit Plummets 99%

Li Auto released its fourth-quarter 2025 financial results, reporting a 36% year-over-year decline in automotive revenue, an operating loss of RMB 440 million, and net profit of just RMB 200 million—a staggering 99% drop compared to the same period last year. Excluding approximately RMB 4.3 billion in cash interest income, the company would have posted a net loss. The vehicle gross margin for the quarter fell to 16.8%, breaching the 20% threshold considered healthy, primarily due to a higher proportion of lower-priced Li Auto i6 models, a sharp decline in sales of the premium MEGA model, and significant price cuts on the L-series vehicles. Despite offering discounts of up to RMB 45,000 on the L-series, their sales still plummeted by 60% year-over-year. On a positive note, Li Auto generated RMB 25 billion in free cash flow during the quarter, bringing its total cash reserves to over RMB 100 billion—the highest among China’s new-energy vehicle startups. The company also set a record with RMB 11.3 billion in R&D investment for the full year, with half allocated to AI-related initiatives. Its self-developed chips are scheduled to enter mass production in 2026. As rivals like NIO have recently turned profitable, Li Auto is betting on intelligent technology and new models to regain momentum.