To The Moon

With $Li Auto(LI)$ scheduled to report its Q4 and full-year 2025 earnings this Thursday, March 12, 2026, before the U.S. market opens, this is indeed a pivotal moment for the company and its shareholders. The stock has been under heavy pressure recently, and this report will serve as a major catalyst.

Li Auto (LI) is scheduled to report its fiscal fourth-quarter and full-year 2025 results on Thursday, March 12, 2026, before the U.S. market opens.

Based on current analyst consensus and company guidance, the expectations are as follows:

Financial Expectations

Revenue: Analysts expect between $3.86 billion and $4.22 billion (approximately RMB 26.5 billion to RMB 29.2 billion). This suggests a year-over-year revenue decline of about 34% to 40%, primarily due to the intense price competition and lower delivery volumes compared to the record-breaking Q4 2024.

Earnings Per Share (EPS): The consensus estimate is $0.05 per ADS (Normalized). This marks a projected return to profitability after the company reported a surprise net loss in Q3 2025.

Net Income: Market estimates suggest a modest net profit of roughly $48.2 million (RMB 350 million), a significant drop from the prior year's fourth quarter as the company continues to absorb R&D costs for its new "i-series" BEV models.

Operational Context

The company has already confirmed that it delivered 109,194 vehicles in Q4 2025, which met the high end of its internal guidance (100k–110k). While these numbers show a recovery from Q3, they are still down roughly 31% from the same period last year.

Investors will be closely watching for:

1. Vehicle Margins: Analysts want to see if margins can climb back toward 20% after falling to 15.5% in Q3.

2. 2026 Guidance: Any outlook on the production ramp of the Li i6 and i8 BEVs will likely dictate the stock's post-earnings direction.

Li Auto delivered 26,421 vehicles in February, marking a 0.6% year-on-year increase despite the impact of the Spring Festival holiday.

Previously, Li Auto had experienced eight consecutive months of year-on-year declines in deliveries.

Here is a summary of Li Auto's (LI) fiscal Q3 2025 earnings, which were reported on November 26, 2025, along with the critical lessons investors took away from their forward guidance.

This quarter was a major turning point for the company, as it marked a harsh reality check after years of dominating the Chinese EV market.

Summary of Q3 2025 Financial Results

Li Auto’s Q3 2025 report was largely defined by plunging sales and a costly product recall, ending an impressive 11-quarter streak of profitability.

• Net Loss: The most glaring figure was a net loss of RMB 624.4 million ($87.7 million), a massive swing from the RMB 2.8 billion net income reported in Q3 2024.

• Revenue: Total revenue came in at RMB 27.4 billion ($3.8 billion), representing a severe 36.2% year-over-year decrease and missing Wall Street estimates.

• Deliveries: The company delivered 93,211 vehicles during the quarter. While this technically met their lowered guidance range of 90,000 to 95,000, it represented a 39% year-over-year collapse.

• Margin Contraction: Vehicle margins plummeted to 15.5% (down from 20.9% a year prior). The company noted that excluding the heavy estimated costs associated with the recall of the Li MEGA MPV, vehicle margins would have been around 19.8%.

• Cash Flow: Free cash flow turned heavily negative to the tune of RMB -8.9 billion, though the company still maintained a fortress balance sheet with RMB 98.9 billion in total cash.

The "Lesson Learnt" from Q4 Guidance and Strategy Shifts

For Q4 2025, Li Auto guided for 100,000 to 110,000 vehicle deliveries and revenue between RMB 26.5 billion and RMB 29.2 billion. Beyond the numbers, management's commentary and this conservative guidance offered a few stark lessons for investors:

1. The BEV Transition was Badly Mishandled The biggest lesson was the cost of hubris. Li Auto built its "sales champion" reputation on highly profitable Extended-Range Electric Vehicles (EREVs) like the L7, L8, and L9. Their aggressive pivot into pure Battery Electric Vehicles (BEVs)—starting with the premium Li MEGA and followed by the Li i6 and i8—was fraught with missteps. The lack of a fully fleshed-out supercharging network, intense competition from Huawei and Xiaomi, and the devastating Li MEGA battery fire recall proved that success in EREVs does not automatically translate to success in BEVs.

2. A Return to the "Entrepreneurial" Roots During the earnings call, CEO Li Xiang admitted that the company had lost its way by adopting overly rigid, "professional manager" corporate structures over the past few years. The guidance underscored a necessary organizational reset. Li Auto announced it was reverting to an entrepreneurial management model to increase agility, fix supply chain bottlenecks, and better understand actual consumer needs rather than just chasing volume targets.

3. The Pull-Forward Illusion Management correctly identified that the broader Chinese EV market was shifting from policy-driven to organic demand. They warned that any end-of-year sales spikes in Q4 2025 would likely be a "pull-forward" effect—consumers rushing to buy before government incentives expired—which would inevitably lead to a brutal hangover and a massive dip in Q1 2026. This realistic (if pessimistic) outlook showed that management was finally abandoning their overly aggressive 700,000-unit annual target (which they wildly missed, ending 2025 at just 406,300 deliveries) in favor of pragmatic forecasting.

In short, the Q3 report and subsequent guidance taught the market that Li Auto is no longer bulletproof. They are in a rebuilding phase, actively restructuring their product lines to defend their core EREV market while carefully trying to fix their BEV strategy.

Key Metrics Investors Will Watch

Because EV manufacturers report monthly delivery numbers, Wall Street already knows that Li Auto delivered 109,194 vehicles in Q4 2025. While this barely met the low end of their 100,000 to 110,000 guidance, it represents a steep 31% year-over-year decline. Therefore, the actual revenue figure will not be a surprise. Instead, the market will aggressively scrutinize the following:

• Vehicle Margins and Profitability: In Q3 2025, Li Auto shocked investors by posting its first quarterly loss in three years, driven by declining sales and costs associated with the Li MEGA recall. Vehicle margins plunged to 15.5% (down from 20.9% a year prior). Investors need to see if margins stabilized or recovered in Q4.

• Q1 2026 Forward Guidance: This is arguably the most critical metric. January 2026 deliveries (27,668) and February deliveries (26,421) were very weak, representing the lowest levels since early 2025. Investors will use the Q1 guidance to deduce management's expectations for March and whether their aggressive 2026 sales target of 550,000 units is actually realistic.

• Updates on Product Strategy and Bottlenecks: Li Auto has struggled heavily with its transition to pure battery electric vehicles (BEVs), notably delaying deliveries of the Li i6 due to production bottlenecks. Listen closely to the earnings call for signs that the company is successfully recalibrating to focus on its highly profitable Extended-Range Electric Vehicles (EREVs) to defend market share against aggressive competitors.

• Retail Network Overhaul: The company recently began closing underperforming stores and rolling out profit-sharing for store managers to revive sales. Any commentary on the early success (or failure) of this strategy will heavily influence forward-looking sentiment.

Short-Term Trading Opportunities Post-Earnings

Trading around earnings is inherently risky, but the current setup for Li Auto presents a few distinct tactical scenarios for short-term traders:

Short Squeeze Potential: Short interest in LI surged to record highs in early 2026 as the firm was heavily targeted by short sellers betting on its continued decline. If the company delivers a "less bad than expected" report, confirms a return to profitability, or issues surprisingly strong Q1 guidance, we could see a rapid short-covering rally (a short squeeze) that violently drives the stock price up.

Relief Bounce on Priced-In Pessimism: The stock is currently beaten down (trading around $17.80), and the broader market is well aware of the eight consecutive months of declining sales and the Q3 unprofitability. Much of the worst-case scenario may already be priced into the stock. If management simply shows a credible plan to stop the bleeding, the stock could experience a strong relief bounce.

Volatility (IV) Crush: EV stocks typically see a massive spike in implied volatility (IV) leading up to an earnings report. If you are an options trader, the post-earnings "IV crush" is a known phenomenon. If you believe the market has already priced in the worst and the stock won't move as drastically as options premiums suggest, volatility-selling strategies could be an opportunity—though they carry their own specific risks.

Li Auto Inc. Sponsored ADR (LI) had 30-Day Implied Volatility (Mean) of 0.5602 for 2026-03-09.

It is always important to remember that post-earnings price action is frequently driven more by management's tone and forward guidance on the conference call than by the backward-looking Q4 numbers.

Technical Analysis - Exponential Moving Average (EMA)

We are seeing LI Auto trying to make a stronger rebound, but with the concerns of its reduced vehicle margins to 15% in the previous quarter, would LI able to make the rebound with a 20% vehicle margins, we are seeing increase buying volume, but can the sentiment last post earnings, and can Li Auto continue to hold the sentiment to power up a rebound.

We might need to watch the 50-day period on trading day before the earnings.

Summary

Li Auto (LI) is scheduled to report its fiscal fourth-quarter and full-year 2025 results on Thursday, March 12, 2026, before the U.S. market opens.

Financial Expectations & Guidance

Wall Street analysts and company guidance suggest a quarter defined by stabilization amid a difficult year.

• Revenue: Analysts expect approximately $3.86 billion to $4.22 billion (RMB 26.5B – 29.2B). This represents a significant year-over-year decline of roughly 34% to 40%, reflecting the intensified price wars and shifting consumer demand in China.

• Earnings Per Share (EPS): The consensus estimate stands at $0.05. While this indicates a return to slim profitability, it follows a surprising net loss in Q3 2025, the company's first in three years.

• Deliveries: Li Auto already confirmed 109,194 vehicle deliveries for Q4 2025. While this hit the upper end of its own guidance, it is a 31% decrease compared to the record-breaking Q4 2024.

Key Strategic Themes

Analysis of the upcoming report centers on three primary areas:

1. The BEV Pivot: Investors are looking for updates on the "i-series" battery electric vehicles (BEVs). The company recently faced production bottlenecks with the Li i6, and the market is skeptical of its ability to replicate its EREV (Extended Range) success in the pure-electric segment.

2. Margin Recovery: After vehicle margins plunged to 15.5% in Q3 due to Li MEGA recall costs and discounting, analysts are watching for a rebound toward the 20% mark.

3. Embodied AI: CEO Xiang Li has signaled a strategic shift toward "embodied AI" and autonomous driving. Any significant R&D spending increases or breakthroughs here will be weighed against near-term profitability.

Market Sentiment

Sentiment remains cautious (Neutral/Hold). While the stock is trading near historical valuation lows (P/S ratio around 1.0), concerns regarding Huawei’s growing competition and a lack of new "hit" models in the early 2026 pipeline continue to weigh on the share price.

Appreciate if you could share your thoughts in the comment section whether you think LI is trading near its its low P/S ratio, can a positive guidance and stronger vehicle margins make a recovery to its share price.

@TigerStars @Daily_Discussion @Tiger_Earnings @TigerWire @MillionaireTiger appreciate if you could feature this article so that fellow tiger would benefit from my investing and trading thoughts.

Disclaimer: The analysis and result presented does not recommend or suggest any investing in the said stock. This is purely for Analysis.