Li Auto (LI) Q2 2025 earnings summary

Executive summary

• Delivered 111,074 vehicles in Q2 2025, with total revenues of RMB 30.2 billion and a 13.4% market share in the RMB 200,000+ NEV segment in China.

• Cumulative deliveries surpassed 1.36 million vehicles by end of July; Li Mega Home and Li i8 launches exceeded expectations, with Li Mega becoming the best-selling MPV above RMB 500,000.

• Gross margin improved to 20.1% from 19.5% a year ago, with vehicle margin at 19.4%.

• Operating margin rose to 2.7%, up from 1.5% year-over-year and 1.0% sequentially.

• Major organizational restructuring in sales and service to boost efficiency, frontline empowerment, and store expansion, especially in lower-tier cities.

Financial highlights

• Q2 2025 revenue was RMB 30.2 billion, down 4.5% year-over-year but up 16.7% quarter-over-quarter; vehicle sales contributed RMB 28.9 billion.

• Gross profit was RMB 6.1 billion, down 1.8% year-over-year, up 14.1% sequentially; gross margin at 20.1%.

• Operating income reached RMB 827 million, up 76.7% year-over-year and 204.4% quarter-over-quarter; net income was RMB 1.1 billion, nearly flat year-over-year, up 69.6% sequentially.

• Diluted net earnings per ADS were RMB 1.03, compared to RMB 1.05 last year and RMB 0.62 last quarter.

• Free cash flow was negative RMB 3.8 billion, with a robust cash position of RMB 106.9 billion as of June 30, 2025.

Outlook and guidance

• Q3 2025 deliveries expected between 90,000 and 95,000 vehicles; revenue guidance between RMB 24.8 billion and RMB 26.2 billion, both representing significant year-over-year declines.

• Gross margin expected to remain around 19% in Q3, consistent with Q2 and Q1.