Source: Li Auto

Li Auto reported third-quarter revenue of 27.4 billion CNY (c. $3.87 billion) on November 26, 2025, after a recall provision tied to its 2024 MEGA model resulted in a quarterly loss. The provision followed a battery-related fire incident that led to a voluntary recall of more than 11,000 units.

The company delivered 93,211 vehicles during the quarter, representing a 39% year-on-year decline. Gross profit totaled 4.5 billion CNY (c. $636 million), and gross margin fell to 16.3%. Adjusted gross margin excluding recall effects would have been 20.4%. Cash reserves ended the period at 98.9 billion CNY (c. $14.0 billion), versus 106.9 billion CNY in the previous quarter.

Li Auto booked an estimated 11 billion CNY (c. $1.55 billion) liability related to the MEGA recall. Quarterly net loss under GAAP was 624 million CNY (c. $88 million), while non-GAAP net loss was 360 million CNY (c. $51 million). The recall was centered on component replacements for affected battery systems.

The quarter marked continued pressure on the company’s extended-range electric vehicle business as market share for the segment declined in China. EREVs accounted for 51% of new-energy sales in 2024 but have fallen to 26% in late 2025 as pure EV adoption increased. Li Auto plans to refresh the L-series in 2026 with larger battery packs, 5C fast-charging capability and dual suppliers beginning in the fourth quarter of 2025.

The pure EV lineup, which includes the i6, i8 and MEGA, has generated more than 100,000 combined orders for the i6 and i8. Retail data shows the i8 reached 5,749 units in October and the i6 reached 5,775 in September, below the company’s internal target of 10,000 monthly units per model. Scaling production and delivery remains a core challenge as pure EV competition intensifies.

Just last week, the first spy photos of a camouflaged Li i9 undergoing road tests surfaced online in China, which is typically a leading indicator of an imminent vehicle launch. Li Auto's management may feel pressured to shorten the transition cycle to pure electric models as EV adoption rate continues to rise.

Source: Li Auto

Li Auto expanded its 5C charging network across China to support its BEV lineup. The company advertises replenishment levels equivalent to up to 1,000 km (621 miles) of rated range in 10 minutes under its own test cycle. Charging infrastructure remains a central component of its domestic strategy as it transitions further into pure EV categories.

R&D spending reached 3 billion CNY (c. $424 million) in the quarter, with full-year spending projected at 12 billion CNY (c. $1.70 billion). AI investments for 2025 are expected to exceed 6 billion CNY (c. $848 million). The company is deploying a Vision-Language-Action driver system combining reinforcement learning and world-modeling, reporting a 91% monthly usage rate in October.

The company is also accelerating overseas expansion using authorized distributors. Initial market entries cover the Middle East, Central Asia and North Africa in 2025, followed by Latin America, Europe and Southeast Asia in 2026. The distribution model differs from Li Auto’s direct-sales approach in China.

CEO Li Xiang said the company is returning to smaller, agile decision structures after adopting managerial systems that slowed product cycles. Li Auto has moved to an OKR-based management framework as the company enters what he described as its second decade. He highlighted a longer-term transition toward embodied intelligence in vehicles as software and hardware converge.

The Q3 results illustrate the financial effects of safety-related provisions as well as the operational challenges tied to the shift from EREVs to pure EVs. How quickly Li Auto raises BEV production to meet order volumes remains a key variable in the company’s market trajectory.

Conversion rate: 1 USD = 7.076 CNY as of November 26, 2025