Li Auto has been profitable for three consecutive years. Last year, vehicle gross profit margin declined. Li Xiang reflected on sales issues and hopes to cultivate store managers earning over one million annually.

On March 12, Li Auto released its 2025 Q4 and full-year financial results. The financial report shows that in Q4 2025, Li Auto’s total revenue was RMB 28.8 billion, down 35% year over year, and up 5.2% quarter over quarter.

In 2025, Li Auto achieved total revenue of RMB 112.31B, with net profit of RMB 1.1 billion. Li Auto has already delivered three consecutive years of profitability, but last year’s revenue and net profit both declined year over year.

By the end of 2025, Li Auto’s cash reserves reached RMB 101.2 billion. In 2025, Li Auto’s vehicle sales revenue was RMB 106.7 billion, down 23.0% from RMB 138.5 billion in 2024. In its financial report, Li Auto said that the decrease in vehicle sales revenue was mainly due to a reduction in vehicle deliveries. In 2025, Li Auto delivered 406.3 thousand vehicles, down 18.81% year over year. In terms of vehicle gross margin, in 2025 Li Auto’s vehicle gross margin was 17.9%, compared with 19.8% in 2024.

At the earnings call, Li Auto CEO Li Xiang said, “The past year has been an important strategic adjustment period for Li Auto. As the company’s scale continues to expand, we are also re-examining many basic capabilities. One of the most core issues is sales. Our biggest problem in the past was managing the direct-operated system using a dealer-management approach. The core of the direct-operated system is to manage stores based on the physical locations. Without dealers, store management should be our own responsibility.”

Since the third quarter of last year, Li Auto has explored how to open stores with higher quality, how to manage stores well and incentivize store managers, and how to empower and train the team effectively. All of this boils down to one core proposition: how to sell cars well using a direct-operated system. To that end, Li Auto has made a series of effective changes, orienting toward results and using sales volume and per-capita output as衡量 standards.

Specifically, this includes optimizing division of responsibilities and concentrating personnel, as well as resolving site-selection issues through store turnover. This March, Li Auto officially launched its “Store Partner” program. Stores have become the basic operating unit, and outstanding store managers have real decision-making power over operations and the right to share in profits.

“Given the broader environment in which car sales systems generally do not make money today, we hope to cultivate a large number of store managers whose annual income exceeds one million, so that the income of excellent store managers reaches two to three times that in the industry. At the same time, from the perspective of sales capability, we also aim to ensure that the company’s order volume and delivery volume remain stable in the top first tier for high-end cars,” Li Xiang said.

In Q4 2025, Li Auto’s delivery volume was 109.2 thousand vehicles, up 17% quarter over quarter. For its guidance for Q1 2026, Li Auto expects vehicle deliveries of 85k to 90k vehicles, representing a year-over-year decrease of 8.5% to 3.1%.

On the product side, Li Auto’s pure-electric model lineup is gradually ramping up. “Through continued efforts with suppliers, the supply issues for the Li i6 have been gradually resolved. We will continue to increase production capacity and strive to further shorten the delivery cycle for everyone,” Li Xiang said.

He also said, “Looking back at last year, after the launch of the Li i6, it faced multiple challenges, including the phase-out period of the initial-sales policy, an increase in production capacity, and the decline in the vehicle purchase tax subsidy policy. This put pressure on the gross margin of the Li i6, but it also left enough room for an improvement in gross margin this year.”

In the second half of this year, Li Auto will launch a brand-new pure-electric SUV, the Li i9, further enriching the pure-electric product matrix.

For range-extended products, in this year’s second quarter, Li Auto will officially release a new Li L9 series. Li Auto’s expectations for this product are that, with a fully upgraded powertrain system, intelligent driving, and chassis technologies, it will create a clear “experience gap” versus competitors, and reclaim the leading position of a flagship SUV.

“The success of the Li L9’s generation change will directly determine the market upper limit for the entire L series. If the competitiveness of the previous-generation Li L9 mainly came from a precise product definition, then the new-generation Li L9 will build core competitive barriers at the technology level,” Li Xiang said.

When discussing this year’s sales target, Li Xiang said that he is very confident in the product and technology competitiveness of this year. However, competition across the entire market is also intensifying, and the incremental growth for the broader market this year is rather limited. Against this backdrop, Li Auto’s goal is to achieve year-over-year delivery growth of more than 20%. Referencing last year’s deliveries of 406.3 thousand vehicles, Li Auto’s target deliveries for this year are more than 487.6 thousand vehicles.