Li Auto (LI) Improved Vehicle Margin to 9.4% but It Remains Half Last Year’s. Can the Model Refresh Restore Profitability?

Li Auto Inc. (NASDAQ: LI) has reported a second consecutive quarterly loss, with revenue falling 15.1% year-over-year to RMB25.7 billion and deliveries declining 11.5% to 98,330 vehicles. Despite these declines, vehicle margin improved to 9.4% from 6.1% in the first quarter. The company expects third-quarter deliveries to remain within the range of 95,000 to 100,000 units, representing a year-over-year growth of 1.9% to 7.3% and revenue of RMB26.6 billion to RMB28.0 billion, indicating potential growth or decline of 2.8% to 2.3%.

While Li Auto's financial performance shows some improvement, the company remains far from achieving profitability, and significant challenges lie ahead, such as continued price competition and rising input costs.