On March 12, Li Auto released its unaudited financial results for the fourth quarter and full year of 2025. The data indicates that the company faced severe operational challenges in 2025, with profitability experiencing a steep decline in the fourth quarter and key annual financial metrics showing significant contraction, impacted by factors including shrinking deliveries and changes in product mix.
Notably, the weak performance has exerted substantial pressure on the company's stock price in the capital markets. Over just one year, the share price of Li Auto-W on the Hong Kong stock exchange has nearly halved.
Delivery Decline Drives Revenue Contraction, Profitability Under Strain According to the financial report, Li Auto's total vehicle deliveries for full-year 2025 were 406,300 units, a decrease of over 18% compared to 500,500 units delivered in 2024. This directly led to a full-year total revenue of RMB 112.3 billion, down 22.3% year-over-year.
Regarding profitability, the company reported a full-year net profit of RMB 1.14 billion, a sharp decline of 85.8% compared to RMB 8.05 billion in 2024. Even after adjusting for non-recurring items, the full-year non-GAAP net profit was RMB 2.4 billion, still down 77.5% year-over-year.
The company's performance was particularly weak in the fourth quarter. Quarterly revenue was RMB 28.78 billion, plunging 35% year-over-year, roughly in line with market expectations. For net profit, Q4 saw only RMB 20.2 million, a dramatic decrease of 99.4% compared to RMB 3.5 billion in the same period last year. Adjusted earnings per ADS fell sharply to RMB 0.25 from RMB 3.79 a year earlier.
Despite the performance pressures, the company's cash reserves remain substantial. As of the end of 2025, Li Auto's total cash and cash equivalents reached RMB 101.2 billion, providing a solid financial buffer during the industry's adjustment period.
Revenue Follows Deliveries Down, Gross Margin Shows Quarterly Resilience Specifically for the fourth quarter of 2025, Li Auto's key operational data showed the following characteristics:
Deliveries and Revenue: Total quarterly deliveries were 109,000 units, a decrease of 31.2% year-over-year. Vehicle sales revenue consequently declined to RMB 27.3 billion, down 36.1% year-over-year, but showed a slight increase of 5.4% compared to the third quarter of 2025.
Profitability: Pressure on the top line directly impacted the income statement. The company recorded an operating loss of RMB 443 million in Q4, compared to an operating profit of RMB 3.7 billion in the prior-year period. Net profit was a mere RMB 20.2 million, indicating an extremely thin profit margin. Even on a non-GAAP basis, net profit was only RMB 274 million, far below the RMB 4.0 billion recorded a year ago.
Gross Margin Observation: As a key metric watched by the market, the company's vehicle gross margin in the fourth quarter was 16.8%, lower than the 19.7% in Q4 2024. The company attributed the year-over-year decline primarily to changes in product mix, particularly the increased delivery proportion of the lower-priced Li L6 model, which reduced the average selling price. However, this figure improved from 15.5% in the third quarter of 2025, demonstrating some sequential resilience. The overall gross margin for the quarter was 17.8%.
Cash Flow: Despite weak profitability, net cash provided by operating activities in Q4 was RMB 3.5 billion, and free cash flow turned positive, reaching RMB 2.47 billion, indicating the company maintained a positive cycle in working capital management.
Cautious Outlook Amid New Product Cycle and Diversification Efforts For 2026, Li Auto provided a relatively conservative outlook. The company expects first-quarter vehicle deliveries to be between 85,000 and 90,000 units, representing a year-over-year decrease of 3.1% to 8.5%. Revenue is projected to be between RMB 20.4 billion and RMB 21.6 billion, a reduction of 16.7% to 21.3% year-over-year. Compared to the Bloomberg consensus estimate of RMB 24.01 billion for Q1 revenue, this suggests the company anticipates continued growth pressure at the start of the new year.
To address near-term challenges and seek long-term breakthroughs, Li Auto is shifting its strategic focus towards a new product cycle and the expansion of its technology ecosystem:
Product Refresh: CEO Li Xiang revealed that the newly upgraded Li L9 is scheduled for launch in the second quarter of 2026, with expected upgrades to the powertrain, intelligent driving, and chassis technology, aiming to boost sales.
Ecosystem Expansion: Beyond its core automotive business, the company launched the AI glasses 'Livis' at the end of 2025, intended to deepen the vehicle-device connectivity experience and explore new smart scenarios.
Global Expansion: The company is accelerating its global footprint, having officially entered overseas markets such as Egypt, Kazakhstan, and Azerbaijan in December 2025, seeking new growth avenues.
Despite the declines in both revenue and profit for 2025, Li Auto emphasized that it has completed its strategic repositioning from an automotive company to an embodied AI enterprise. The company's R&D expenditure reached a record high of RMB 11.3 billion in 2025, with AI-related investments accounting for 50% of the total. CFO Li Tie stated that the cash reserves exceeding RMB 100 billion will provide ample momentum for the company's exploration in the field of embodied AI and its global expansion.
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