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Research Alert: Li Auto's Q1 2026: Steep Margin Decline And Net Loss Amid Model Refresh Cycle

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CFRA, an independent research provider, has providedwith the following research alert. Analysts at CFRA have summarized their opinion as follows:

Li Auto reported challenging Q1 2026 results with revenues declining 11.4% to CNY23.0B despite deliveries rising 2.5% to 95,142 vehicles, as the vehicle margin collapsed to 6.1% from 19.8% and gross margin fell to 7.9% from 20.5%. The company swung to an operating loss of CNY3.0B and net loss of CNY2.3B, reversing the prior year's operating income of CNY271.7M and net income of CNY646.6M. Management highlighted the late-May launch of the all-new Li L9 with proprietary chips and AI capabilities as a catalyst, alongside its ongoing USD1.0B share repurchase program. The company guided Q2 2026 deliveries of 95,000-100,000 vehicles (decline of up to 14.5%) and revenues of CNY24.1B-CNY25.4B (a drop of as much as 20.2%). We believe the combination of deteriorating margins, widening losses, and negative FCF of CNY7.4B (vs. CNY2.5B prior year) underscores near-term execution pressures, though the substantial cash position of CNY94.3B provides financial flexibility during this challenging transition period.

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