Li Auto Q2 Profits Halved Amid Price War; Annual Guidance Lowered
Chinese electric vehicle manufacturer Li Auto reported a significant decline in its second-quarter financial performance, with net profits more than halving year-on-year to RMB 1.1 billion ($151.5 million). This drop was primarily driven by intense competition and a lower average selling price, particularly against rivals like Huawei. Despite achieving record revenue of RMB 31.7 billion due to strong sales of its extended-range hybrid EVs, the company's vehicle margin decreased to 18.7%. The newly launched L6 crossover contributed significantly to deliveries, which totaled 108,581 units. However, facing slowing demand and persistent pricing pressure, Li Auto reduced its annual delivery guidance from 560,000 to 500,000 units. Following the earnings release, the company's U.S.-listed shares fell by 16.1%. The report highlights the challenging market dynamics in China's EV sector, where Huawei's Harmony Intelligent Mobility Alliance has emerged as a formidable competitor, with its Aito M7 model becoming a top seller. This development underscores the ongoing price war and strategic adjustments required for survival and growth in the highly competitive Chinese automotive landscape.
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Li Auto Q2 Profits Halved Amid Price War; Annual Guidance Lowered
Chinese electric vehicle manufacturer Li Auto reported a significant decline in its second-quarter financial performance, with net profits more than halving year-on-year to RMB 1.1 billion ($151.5 million). This drop was primarily driven by intense competition and a lower average selling price, particularly against rivals like Huawei. Despite achieving record revenue of RMB 31.7 billion due to strong sales of its extended-range hybrid EVs, the company's vehicle margin decreased to 18.7%. The newly launched L6 crossover contributed significantly to deliveries, which totaled 108,581 units. However, facing slowing demand and persistent pricing pressure, Li Auto reduced its annual delivery guidance from 560,000 to 500,000 units. Following the earnings release, the company's U.S.-listed shares fell by 16.1%. The report highlights the challenging market dynamics in China's EV sector, where Huawei's Harmony Intelligent Mobility Alliance has emerged as a formidable competitor, with its Aito M7 model becoming a top seller. This development underscores the ongoing price war and strategic adjustments required for survival and growth in the highly competitive Chinese automotive landscape.
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