Core Viewpoint - Li Auto is experiencing demand contraction and sales underperformance, leading to revised sales volume and earnings forecasts for 2025-26 due to increased competition and margin compression from new BEV models [1][2][4]. Sales Performance - In 1H25, Li Auto's sales lagged behind the broader market, with a market share decline of 2 percentage points in China's NEV market [2]. - Weekly sales have dropped from 8-9k units to below 6k units, indicating deteriorating demand dynamics [2][3]. - The company anticipates a potential year-over-year sales decline exceeding 30% in 3Q25 due to inadequate delivery of new models [4]. Margin and Earnings Outlook - Despite a vehicle margin of around 19% in 2Q25, margin compression is expected from the increased sales mix of i-series BEVs, which have higher BOM costs [1][3]. - Non-GAAP net income forecasts have been reduced by 37%-47% to RMB6.2 billion and RMB10.1 billion for 2025 and 2026, respectively [4]. Competitive Landscape - Li Auto faces intensified competition as rivals introduce lower-priced models with similar features, challenging its market position [5]. - The company has been criticized for its slow response to competitors and for not sufficiently innovating its product offerings [5][6]. Strategic Focus - The company needs to pivot its strategic focus to expand its BEV reach while maintaining relevance in the EREV market through effective product iteration [6]. - A shift back to P/S multiples for valuation is preferred due to near-term profitability volatility and the industry trend among NEV counterparts [7].

Core Viewpoint - Li Auto Inc. has revised its delivery outlook for Q2 2025, expecting to deliver approximately 108,000 vehicles, down from a previous estimate of 123,000 to 128,000 vehicles, due to a temporary impact from a sales system upgrade [1] Company Overview - Li Auto Inc. is a leader in China's new energy vehicle market, focusing on designing, developing, manufacturing, and selling premium smart electric vehicles [2] - The company's mission is to create a mobile home and happiness, providing families with safe, convenient, and comfortable products and services [2] - Li Auto is a pioneer in commercializing extended-range electric vehicles in China while also developing battery electric vehicle platforms [2] - The company began volume production in November 2019 and has a diverse model lineup, including Li MEGA, Li L9, Li L8, Li L7, and Li L6 [2]

Core Insights - Li Auto has submitted its second fully electric SUV, the Li i6, for regulatory approval in China, with an official launch expected in about three months [1] - The Li i6 is listed in the latest catalog of new models by China's Ministry of Industry and Information Technology, which is open for public feedback [1] Vehicle Specifications - The Li i6 appears in three versions: dual-motor variant (150 kW front motor and 250 kW rear motor) and two single-motor variants with a peak output of 250 kW [2] - All versions share similar dimensions: 4,950 mm in length, 1,935 mm in width, 1,655-1,670 mm in height, and a 3,000 mm wheelbase [2] Production and Performance - Production of the Li i6 will occur at Li Auto's facilities in Beijing and Changzhou, with a curb weight ranging from 2,380 kg to 2,515 kg [3] - The vehicle can reach speeds up to 180 km/h and will be powered by lithium-iron phosphate batteries sourced from CATL and Sunwoda [3] Market Positioning - The Li i6 is designed as a roomy two-row, five-seat electric SUV, targeting families considering premium models like the Mercedes-Benz GLC, BMW X3, or Audi Q5 [4] - The official release is slated for September, with images of the SUV's exterior shared on Weibo by Li Xiang, the founder and CEO of Li Auto [4] Company Background - Li Auto is recognized for its extended-range electric vehicles, including the Li L6, L7, L8, and L9, and recently launched its first battery electric vehicle, the Li Mega MPV, on March 1, 2024 [5] - The company is also preparing to launch the Li i8, its first pure electric SUV, later in July [5]

Company Performance - Li Auto delivered 40,856 vehicles in May 2025, marking a year-over-year increase of 16.7% [1] - Cumulative deliveries reached 1,301,531 as of May 31, 2025 [1] Product Development - The company completed a comprehensive upgrade of its entire model lineup, with the new Li MEGA Home deliveries starting in late May [2] - The Li L series features significant enhancements, including dual-chamber air suspension and industry-leading safety capabilities with standard all-weather LiDAR [2] Technological Advancements - Li Auto rolled out OTA update version 7.4, enhancing the smart assistant Li Xiang Tong Xue with new animated avatars and improved intelligence [3] - The company plans to complete the deployment of its 2,500th super charging station in June, ahead of the launch of its first battery electric SUV, Li i8, in July [3] Infrastructure Expansion - As of May 31, 2025, Li Auto operated 506 retail stores in 152 cities and 502 servicing centers across 222 cities [4] - The company had 2,414 super charging stations in operation, equipped with 13,195 charging stalls in China [4] Company Overview - Li Auto is a leader in China's new energy vehicle market, focusing on premium smart electric vehicles and extended-range electric vehicles [5] - The current model lineup includes Li MEGA, Li L9, Li L8, Li L7, and Li L6, with plans for further expansion to target a broader user base [5]