Li Auto (NASDAQ:LI) shares slipped in U.S. premarket trading on Wednesday after the Chinese EV maker released a weaker-than-expected third-quarter report and delivered guidance that fell well short of market forecasts.
By 04:18 ET, the stock was down 1.8%.
The company posted earnings per share of RMB0.36, missing analyst expectations of RMB0.64. Revenue came in at RMB27.36 billion, marginally ahead of consensus estimates but not enough to offset concerns about weakening profitability and delivery trends.
The third quarter marked a notable pullback in vehicle demand. Deliveries tumbled 39% from the same period last year to 93,211 units. Vehicle sales dropped to RMB25.9 billion, down 37.4% year-over-year and 10.4% from the previous quarter.
Profitability metrics also deteriorated. Vehicle margin contracted sharply to 15.5%, compared with 20.9% a year earlier—or 19.8% excluding estimated recall expenses tied to the Li MEGA. Gross margin slid to 16.3% from 21.5% a year ago, or 20.4% after adjusting for recall impacts. Operating margin reversed into the red at -4.3%, down from 8% last year and 2.7% in Q2.
Despite the weaker financials, management emphasized progress in new battery-electric models and AI-driven technology.
“Our BEV portfolio gained strong momentum during the third quarter, demonstrating our top-tier product-definition capabilities and solid product strength. Orders for Li i8 and Li i6 have exceeded 100,000 in aggregate,” said Xiang Li, chairman and CEO of Li Auto.
“On the AI front, our VLA Driver large model, empowered by world model and reinforcement learning, has achieved industry-leading user adoption with monthly usage rate reaching 91% in October,” he added.
CFO Tie Li acknowledged the operational challenges the company faced during the quarter. “While navigating intensifying market competition, we faced headwinds in the third quarter from supply chain bottlenecks and costs related to the recall of Li MEGA. We have been proactively working with our supply chain partners to fulfill the demand of our users for Li i8 and Li i6,” he said.
However, the company’s outlook did little to calm investor concerns. Li Auto projected fourth-quarter revenue between RMB26.5 billion and RMB29.2 billion—far below analyst expectations of RMB36.99 billion.
Deliveries are expected to land between 100,000 and 110,000 vehicles, representing a year-over-year decline of 37% to 30.7%.