Li Auto Inc. is set to release its second-quarter earnings before markets open on Wednesday, with investors assessing the company’s performance against a backdrop of cooling demand in China’s electric vehicle sector.
Analysts project a loss of 0.65 yuan per share for the quarter, an improvement from the 2.1 yuan loss reported in the first quarter. Revenue is forecast at 26.47 billion yuan, down 12.5% from the same period last year. In the prior quarter, Li Auto reported revenue of 22.98 billion yuan, reflecting a sequential recovery from the first quarter’s 22.98 billion yuan.
The company launched its new Li L6 all-wheel-drive SUV in July, delivering 30,468 vehicles during the month. Its gross profit margin stood at 16% in the trailing period, while earnings growth has remained negative over the past year, declining 124%.
Analysts maintain a consensus Buy rating with a mean price target of $18.22, implying a 46% upside from the then-current price of $12.48. However, sentiment has softened recently, with the EPS estimate declining 20.9% over the past 60 days. Goldman Sachs maintained a Hold rating in early August but reduced its price target to $15.70 from $18.
Li Auto missed earnings expectations by 17% in May while beating revenue forecasts by 4.4%. The broader industry faces headwinds, including subsidy tapering, margin compression, and weaker consumer sentiment, with China’s domestic EV market slowing to 2024 levels. Regulatory changes have also weighed on sentiment, as Beijing removed New Energy Vehicles from the strategic emerging industries list for the 2026-2030 Five-Year Plan.
