Li Auto has also reached a "crossroads".
On August 28th, Li Auto released its financial report data for the second quarter of 2025. This "mid - term report card" of Li Auto can be said to be a "mixed - results" answer sheet.
The good news is that Li Auto is still the "top student" who is good at making money and has a solid foundation, and its basic business is very stable. The bad news is that Li Auto's growth rate has significantly slowed down. How to move forward in the future and how to impress everyone again are difficult questions it needs to think about.
Data shows that in the second quarter of 2025, Li Auto delivered 111,000 vehicles, with only a 2.3% year - on - year increase. The revenue in the second quarter was 30.2 billion yuan, a 4.5% year - on - year decline. The net profit was 1.1 billion yuan, with 11 consecutive quarters of profitability. Li Auto's cash reserves (cash, time deposits, short - term investments, etc.) reached as high as 106.9 billion yuan.
So, currently, Li Auto is like a top student standing at a crossroads. On one side are flowers and applause, on the other side are challenges and doubts. Every step it takes next will determine whether it will continue to lead in the future or be caught up by its competitors.
After the release of the financial report, the price of Li Auto's US stocks rose 2.92% to $23.26, and the latest total market value was $24.898 billion.
01 The "Top Student" Loses Speed
For the capital market, the core of a growth - type company's valuation lies in its future growth potential. However, Li Auto, once a "phenomenal" presence in the new energy vehicle market, is facing a profound growth crisis.
Imagine that there is a "top student" in your class who used to make rapid progress in every exam. Suddenly, one time, his score is only a little higher than the last time, while the class average is rising rapidly. At this time, don't we think this "top student" is in trouble?
Li Auto is facing a similar situation now.
In the "class" of new energy vehicles, Li Auto was once a "phenomenal" presence. However, the latest "report card" shows that Li Auto delivered a cumulative total of 203,900 vehicles in the first half of the year, a 7.9% year - on - year increase. Among them, the delivery volume in the second quarter was 111,000 vehicles, and the year - on - year growth rate suddenly dropped to 2.3%.
Li Auto's sales growth rate has been continuously slowing down since 2025 | Image source: Screenshot of the performance report
In contrast, the "class average" (the overall sales volume of the new energy vehicle industry) in the first half of the year increased by 40.3%. Isn't this comparison astonishing? This shows that Li Auto has significantly slowed down.
So, what has made this former "top student" slow down? There are mainly two reasons:
One is that it has encountered "close - combat" from strong enemies. Challengers represented by Huawei's AITO brand, such as its M7, M9 and other models, highly overlap with Li Auto's L series in terms of product positioning, target customer groups, and price ranges. Relying on Huawei's powerful technological halo, brand appeal, and channel network, AITO has launched the most direct and fierce impact on Li Auto's market share. The rise of AITO is the primary external factor for the slowdown of Li Auto's L series sales.
The other, a deeper - level challenge, comes from the transformation of the technological route. The extended - range technology that Li Auto relied on for success is now facing challenges. With the continuous progress of battery technology and the increasing improvement of charging infrastructure (including the super - charging network vigorously built by Li Auto itself), the cruising range and charging convenience of pure - electric vehicles have been greatly improved.
Therefore, the advantage of Li Auto's "extended - range" is weakening, and the balance of the entire market is tilting towards "pure - electric". The advantage that Li Auto relied on for success is narrowing.
What's more noteworthy is that Li Auto's total revenue has shown negative growth. The revenue in the second quarter of 2025 was 30.2 billion yuan, a 4.5% decrease compared with 31.7 billion yuan in the second quarter of 2024.
Against the background of a slight increase in delivery volume, the negative growth of revenue indicates that its core indicator - the average selling price per vehicle (ASP) - is being significantly eroded.
Li Auto's financial report also candidly stated that this is the result of multiple factors such as the L6, which has a lower price, becoming the sales mainstay, providing financial discounts to customers, and increasing sales incentives.
From the perspective of the vehicle sales structure, this trend is clearer. In the first half of 2025, the sales pillar has changed from the previous L7/L8/L9 combination to the Li Auto L6 with a lower price threshold (the cumulative sales volume was 96,400 vehicles, accounting for 47%). The Li Auto MEGA, which was highly anticipated to break into the high - end pure - electric market, had a dismal market performance (the cumulative sales volume in the first half of the year was only 5,805 vehicles, accounting for only 2.8%), and failed to significantly boost the ASP and brand image.
If the previous data was just a "warning", then Li Auto's forecast for the future really makes people hold their breath. Li Auto expects the vehicle delivery volume in the third quarter to be only 90,000 - 95,000 vehicles, a year - on - year decline of up to 37.8% - 41.1%. At the same time, it is expected that the total revenue in the third quarter will plummet by 38.8% - 42.1% year - on - year, dropping to between 24.8 billion yuan and 26.2 billion yuan.
The root cause behind this is that as more and more competing products are launched on the market, Li Auto's product - strength advantage is no longer so obvious. At the same time, the highly anticipated pure - electric models, the i8 has just started delivery, and the i6 has not been launched yet.
02 The "Ballast Stone" Amid the Slowdown
The growth troubles that Li Auto, the "top student", is facing can be regarded as side A of the story. Now, let's turn to side B and look at an equally important, or even more crucial fact: Li Auto is still a company that is very good at "making money".
In a market where everyone is engaged in a "bloody" price war, being able to make money is in itself a superpower.
Let's first look at Li Auto's relatively stable gross profit margin. In the second quarter of 2025, Li Auto's vehicle gross profit margin was 19.4%, and the overall margin in the first half of the year was 19.6%. Although it has declined slightly compared with the peak period, in the current situation where the industry is generally struggling with gross profit margins, being able to maintain a level close to 20% can be regarded as excellent.
Main financial indicators of Li Auto in Q2 2025 | Image source: Screenshot of the performance report
How did it achieve this? Many people may think of Li Auto's nickname, the "frugal factory". The answer given by the financial report is "cost reduction". This may sound simple, but it actually requires great skills. This shows that Li Auto is a "master" in managing the supply chain and improving production efficiency. It can produce equally good cars with less money. This is one of its core competitiveness.
What's even more impressive is that against the background of a year - on - year decline in total revenue, Li Auto still achieved almost the same profit as the same period last year. The net profit in the first half of 2025 was 1.74 billion yuan, a 3% year - on - year increase. Among them, the net profit in Q2 was 1.1 billion yuan, only a 0.4% year - on - year decrease.
This is mainly due to its strict control of expenses. The financial report shows that the R & D expenses and sales, general and administrative expenses in the first half of the year were 5.324 billion yuan and 5.249 billion yuan respectively, with year - on - year decreases of 12.4% and 9.4% respectively. The main reason is "reduction in employee compensation and improvement in operational efficiency".
This shows that in the face of the cold wind of the market, Li Auto can react quickly and preserve profits by "tightening its belt", demonstrating the financial discipline of a mature enterprise.
This strong profitability is Li Auto's "confidence". This is the fundamental difference between it and most of its competitors, and also the fundamental reason why it still has the confidence to carry out strategic adjustments and transformations when facing the dilemma of stagnant growth. Because it has money and time to make mistakes and find the next growth point.
So, looking at it comprehensively, Li Auto is like a top student who has encountered a bottleneck but has a very solid foundation. He may have temporarily dropped in ranking, but he has enough capital and ability to adjust his learning methods.
03 Looking for the Second Growth Curve
In the past, why were people willing to give Li Auto high evaluations and valuations? Because it was regarded as a "high - growth stock", and people expected it to be like a rocket, with sales and revenue doubling continuously.
But now, the situation has changed: the old story is over. The story of the "extended - range SUV" that it relied on for success has reached its ceiling; the new story has not started well. The highly anticipated new story of "pure - electric" has not had a smooth start.
Next, whether the Li Auto i8 and the upcoming i6 can achieve great success in the market will be the ultimate "touchstone" to test all of Li Auto's capabilities - product strength, brand appeal, and sales ability. Whether they can gain a foothold in the extremely competitive market will directly determine Li Auto's core performance in the next one or two years.
The VLA model was first installed in the Li Auto i8, bringing stronger comfort | Image source: Li Auto
However, we don't need to worry too much about Li Auto. Why? Because it has a huge advantage - it has a lot of money!
As of the first half of 2025, it had as much as 106.9 billion yuan in cash and cash equivalents on its books. This huge "war reserve fund" is its greatest confidence to deal with all challenges. It has enough money to bear the pain of transformation, can continuously invest in pure - electric technology and build a super - charging network without seeking external financing, and can even bear the pressure of losses in the early stage of new vehicle launches.
Li Auto's story has changed from an easy 100 - meter sprint to a marathon that tests endurance, wisdom, and courage. The market's attention is all focused on it to see if it can successfully pass through this stormy crossroads and create the next era that truly belongs to itself.
*The source of the header image: Li Auto
This article is from the WeChat public account "GeekPark" (ID: geekpark). The author is Zhou Yongliang. It is published by 36Kr with authorization.