Li Auto Suffers Loss as Hybrid Sales Slow, Shrinking Margins

By Jiahui Huang

Li Auto swung to a quarterly loss as the Chinese carmaker discounted older hybrid models and ramped up its push into the competitive market for battery-powered electric vehicles.

The Nasdaq-listed company has been struggling with slowing demand for the plug-in hybrid vehicles it specializes in. It has worked to pivot to battery EVs, but it faces an uphill battle to find its place in an industry characterized by price wars.

Li Auto's first-quarter net loss was 2.29 billion yuan, equivalent to $337.8 million, compared with net profit of 650.3 million yuan a year earlier. Analysts had expected a 2.4 billion yuan loss, according to a Visible Alpha consensus estimate.

Revenue fell 11% to 22.98 billion yuan, below the 23.25 billion yuan market expectation.

Once one of China's best-selling makers of extended-range hybrid vehicles, Li Auto has spent the quarter clearing inventory of its older L-series models, hurting profitability.

Purchase incentives, heavier discounting and rising battery costs also pressured margins.

In the first quarter, the company's vehicle margin stood at 6.1%, dragged by different product mix. Its gross margin was 7.9%, down from 20.5% a year earlier.

Li Auto's American depositary receipts fell 4.1% in premarket trading Thursday after the results.

Write to Jiahui Huang at jiahui.huang@wsj.com

(END) Dow Jones Newswires

May 28, 2026 05:16 ET (09:16 GMT)