- Li Auto posted a fourth-quarter net income of 20.2 million yuan, but still recorded an operating loss of 442.6 million yuan.
- Total revenue for the fourth quarter plunged 35.0% from the same period in 2024 to 28.8 billion yuan.
Li Auto narrowly returned to profitability in the fourth quarter of 2025 as it grapples with sliding sales and setbacks in its transition to pure electric vehicles.
The company's fourth-quarter revenue was 28.8 billion yuan ($4.1 billion), dropping 35.0% from the same period in 2024, according to the latest financial data released Thursday.
Despite the sharp contraction, the figure still landed within the company's previously provided guidance range of 26.5 billion yuan to 29.2 billion yuan.
Net income for the fourth quarter stood at 20.2 million yuan. That compares with a net profit of 3.5 billion yuan in the fourth quarter of 2024. Li Auto suffered its first net loss in three years in the preceding quarter.
The massive profit squeeze underscores the severe market tests currently facing the automaker. Its fourth-quarter vehicle deliveries tumbled 31.19% year-on-year to 109,194 units.
Notably, Li Auto still posted a loss from operations of 442.6 million yuan in the fourth quarter, compared with an operating income of 3.7 billion yuan in the fourth quarter of 2024 and a loss from operations of 1.2 billion yuan in the third quarter of 2025.
Li Auto's vehicle margin came in at 16.8% in the fourth quarter. This is significantly lower than the 19.7% recorded in the same period of 2024, but slightly better than the 15.5% in the third quarter.
The sequential improvement in vehicle margin was partly driven by the conclusion of the Li Mega recall in the prior quarter. However, a shift in product mix following the rollout of the new Li i6 model dragged down the average selling price.
Its gross margin was 17.8% in the fourth quarter, compared with 20.3% in the fourth quarter of 2024 and 16.3% in the third quarter of 2025.
Li Auto's research and development expenses for the fourth quarter were 3.0 billion yuan, representing an increase of 25.3% year-on-year and a 1.4% increase from the third quarter of 2025.
Its selling, general and administrative (SG&A) expenses in the fourth quarter were 2.6 billion yuan, decreasing by 14.0% year-on-year and 4.4% from the third quarter of 2025, primarily due to decreased employee compensation.
The company, which once led China's EV startups, is facing fierce competition. Rivals are aggressively equipping their extended-range models with larger-capacity batteries to narrow the experience gap.
Meanwhile, the highly anticipated pure electric i-series models have shown weak market performance.
Faced with losing market share, Li Auto appears to be making a strategic pullback. According to local media reports, the company will refocus on its most certain extended-range business in 2026.
Li Auto provided relatively pessimistic guidance for the first quarter of 2026. The company expects first-quarter vehicle deliveries to be between 85,000 and 90,000 units.
This delivery guidance implies a continued year-on-year decline of 8.5% to 3.1%. Its first-quarter revenue guidance is between 20.4 billion yuan and 21.6 billion yuan.
The guidance implies that Li Auto currently expects March deliveries to be between 30,911 and 35,911 units.
As of December 31, 2025, Li Auto's cash reserves stood at 101.2 billion yuan. The ample cash will likely help the company weather the current industry winter and restore profitability.
