Sales Volume and Average Price Both Decline, Li Auto's Net Profit Plummets Nearly 86% Last Year

Li Auto was once hailed as the “most profitable student” among new car-making forces, but its 2025 financial report completely shattered that label.

On March 12, Li Auto released its 2025 financial report, with a net profit of just over 1.1 billion yuan for the year, a nearly 86% year-on-year plunge, and revenue shrank by 22% to 112.3 billion yuan. Especially in the fourth quarter of last year, while many automakers experienced sales releases, Li Auto’s operating profit and net profit both declined sharply, indicating the company is undergoing an unprecedented “performance slowdown.”

In fact, in the third quarter of 2025, due to the impact of the MEGA recall incident, a one-time loss of over 1.1 billion yuan was recorded, and Li Auto’s operating loss was 1.17 billion yuan. According to the fourth quarter financial report, Li Auto has already returned to losses in its core business.

Some media called this annual report a “crash scene.” Behind the 85.8% plunge in net profit are multiple hits—plummeting sales of main models, blood loss from price wars, surging market complaints, and negative incidents—all hitting performance pain points and creating the worst performance since the company’s listing.

Li Auto’s performance decline is most directly caused by a slowdown in sales and deteriorating product structure. While competitors like Wenjie and Leapmotor are stepping up with extended-range models, the pure electric technology is fiercely squeezing the market. The extended-range route was once Li Auto’s killer feature, but now it feels powerless.

Looking at core delivery data, Li Auto delivered 406,300 vehicles in 2025, down 18.8% year-on-year. Not only did it fail to meet the initial target of 700,000 units, but even the adjusted target of 640,000 units was only achieved 60%. Once considered the “new force leader” in profitability and sales, Li Auto has been overtaken by competitors like XPeng and NIO.

2025 was supposed to be a key year for Li Auto’s transition from a single extended-range strategy to a “range + pure electric” dual-energy strategy, but the start in the pure electric field was unfavorable.

Whether it’s the MEGA or subsequent pure electric models, market response has been disappointing. Some models initially expected to perform well faced delays due to negative publicity and battery issues, missing the best sales ramp-up period. In the fierce competition of pure electric vehicles, Li Auto struggles to maintain its previously high premium in the extended-range era.

Currently, pure electric models have not only failed to fill the gap but have also dragged Li Auto down. In recent years, many automakers, including XPeng, have been pushing new strategies, but strategic missteps like Li Auto’s are very rare.

This has triggered a chain reaction. Even as regulators have repeatedly called for a halt to price wars, Li Auto has increased end-user discounts to counter competitors like Wenjie and IM Motors, directly leading to a continuous decline in vehicle prices and further squeezing gross profit margins. The financial report shows that the company’s gross profit margin in 2025 fell by about two percentage points year-on-year, contrasting sharply with NIO’s rising gross profit margin in 2025.

Both sales volume and average price are declining, directly impacting operational quality. With the fading of extended-range benefits, setbacks in the pure electric transition, and organizational turbulence, Li Auto’s days have become increasingly difficult.

In response to operational pressures, Li Auto is seeking a breakthrough. Previously relying on extended-range technology, the company now hopes to enter the pure electric market and is betting heavily on AI for the future. But with its declining performance, whether this transformation can break through in the fierce auto market remains to be seen. Some long-term industry observers believe that before passing through the “long night,” this once profitable king must first ensure it does not lose too much warmth in the cold winter.