---
title: "i6 Alone Won't Do: How Long Until LI Turns the Corner?"
type: "Topics"
locale: "en"
url: "https://longbridge.com/en/topics/41258656.md"
description: "Li Auto's 'distressed turnaround' still hasn't arrived"
datetime: "2026-05-29T09:37:04.000Z"
locales:
  - [en](https://longbridge.com/en/topics/41258656.md)
  - [zh-CN](https://longbridge.com/zh-CN/topics/41258656.md)
  - [zh-HK](https://longbridge.com/zh-HK/topics/41258656.md)
author: "[Dolphin Research](https://longbridge.com/en/news/dolphin.md)"
---

# i6 Alone Won't Do: How Long Until LI Turns the Corner?

$Li Auto(LI.US) released Q1 2026 results on the evening of May 28 Beijing time, after HK close and before US open. While Li Auto had already flagged a decline in Q1 vehicle GPM, the print was still mediocre even vs. bearish expectations. Guidance suggests the company is not yet at a 'turnaround from distress' phase, details as follows:

**① Revenue slightly missed on a sharper ASP drop:** Q1 vehicle sales revenue was RMB 21.5bn (total revenue approx. RMB 23.0bn, -11.4% YoY), below Street. The key culprit was an ASP slide to RMB 226k, down ~RMB 24k QoQ and below the RMB 234k market view.

The ASP compression mainly came from two factors. Mix continued to shift down as the lower-priced BEV i6 sold strongly, lifting its share to ~60%, while the high-priced Mega fell to ~1.4%.Facing intense competition, Li Auto also increased discounts on the core L-series: roughly RMB 36k on L6, RMB 45k on L7/L8, and RMB 50k on L9, with Mega at ~RMB 17k, further dragging the blended ASP.

**② Vehicle GPM plunged, but in line with the low bar and prior guide:**

Q1 vehicle GPM was 6.1%, down 1,070bps QoQ from 16.8%. Management had guided to ~5% at the prior results call due to purchase-tax subsidy cushions, higher i6 mix, and L-series inventory clearance.Consensus was ~5%, so the final print was only ~100bps above the low bar.

The GPM collapse reflected both ASP pressure and cost inflation. Per-unit cost rose ~RMB 5k QoQ to RMB 213k, as scale benefits weakened on a 13% QoQ volume decline, storage chips and raw materials moved higher (i6 margin hit ~300bps), and Li Auto shouldered ~RMB 15k purchase-tax subsidies for i6.As a result, GP per car was only ~RMB 14k in Q1, underscoring heavy pricing pressure.

**③ OP swung to loss as volume leverage failed and GPM collapsed:**

Q1 operating profit fell by ~RMB 2.55bn QoQ to a loss of RMB 3.0bn, driving a major drain in FCF. The two core drags were a 13% QoQ sales decline that muted operating leverage and the cliff-drop in vehicle GPM to 6.1%.

Opex was disciplined, with R&D at RMB 2.72bn (down ~RMB 300mn QoQ) and SG&A at RMB 2.05bn (down ~RMB 600mn QoQ), helped by seasonality, headcount optimization, and a shift from expansion to quality in channels. But that was not enough to offset revenue softness and GPM bleeding, leading to a sharp OP swing to negative.

Overall, despite pre-guiding the weak print, the renewed ASP and GPM collapse directly led to significant OP and FCF losses. This exposes substantial operating stress under both internal and external headwinds.

**On guidance, which the market cares about most:**

**① Volume guide missed; muted order intake for the refreshed L9**

Q2 deliveries are guided at 95k–100k, below the Street's 108k and down 10%–14.4% YoY. With 34k delivered in Apr, implied May/Jun average is only ~30.5k–33k per month.That signals a QoQ dip vs. Apr and points to a softer-than-expected order trend.

The key Q2 catalyst, the all-new L9, launched and began deliveries on May 15. The soft monthly guide suggests the refreshed L9 is seeing tepid incremental orders, while the previously strong i6 backlog is being consumed.Overall, the new model cycle has yet to deliver a meaningful volume uplift.

**② Revenue guide also disappointed**

Q2 vehicle revenue is guided at RMB 24.1bn–25.4bn, below the Street's RMB 26.3bn and down ~16%–20% YoY. Implied Q2 ASP is ~RMB 238k, up ~RMB 12k QoQ from a low base, but still under the RMB 245k market view.This again suggests the higher-priced refreshed L9 has not lifted blended ASP as much as hoped.

On the positive side, management expects vehicle GPM to recover to ~10% in Q2 from 6% in Q1, helped by the new L9 launch. That remains well below the prior 20% 'healthy' margin level, implying limited repair and continued earnings pressure.

**Looking past the Q1 trough to the full-year 2026 picture:**

**① A full L-series refresh plus a new BEV flagship i9**

Li Auto kicked off the major L-series refresh in Q2 2026 with the all-new L9 (on sale and delivering since May 15). Refreshed L8, L7, and L6 will roll out from late Q2 into 2H.Specifically:

L8 (5-seat flagship): deliveries expected to start in Q3, larger footprint, 115kW range extender and 72.7kWh pack.

L7 (premium 6-seater): to follow L8, positioned around RMB 300k.

L6 (premium 5-seater): to launch in Q4, adding a 51kWh large-battery variant.

i9 (BEV flagship SUV): to debut in 2H as Li Auto's first full-size BEV flagship.

**From the launched L9, product upgrades are notable:**

a. Battery and range upgrades: 72.7kWh 5C fast-charge pack standard across the line, CLTC EV range at 420km (+50% vs. prior).b. New-gen range extender: 3rd-gen in-house unit, WLTC fuel consumption at 6.3L/100km vs. 7.6L.c. In-house AD chip: M100 'Mach' (5nm) first deployed, dual chips totaling 2,560 TOPS.d. Chassis leap: a full steer-by-wire active chassis, rear-wheel steering, 800V active suspension, and EMB brake-by-wire.e. Proportions optimized: shorter front overhang, longer rear overhang, visual mass moved rearward, UWB sensors replace 12 ultrasonic radars for a clean exterior surface.

**Strategy for 2026: feature-up with pragmatic pricing, and streamline the line-up:**

**a) More features, more pragmatic pricing:** For the new L9, the Ultra is RMB 459.8k (up RMB 20k vs. prior but with bigger spec gains), and the Livis is RMB 509.8k (down RMB 50k vs. pre-sale). The trim ladder uses the standard model for volume and the Livis to define brand ceiling, aiming for 'full spec at entry'.

**b) Fewer SKUs, tighter focus:** The prior four-line grid (9-8-7-6) is simplified into two: Flagship (L9 six-seat, L8 five-seat) and Premium (L7 large six-seat, L6 large five-seat). This addresses SKU bloat, limited differentiation, and the inability to offer high spec at lower price bands.

The combined approach of trading up features for volume and streamlining for efficiency aims to defend the L-series base amid a 2026 market pivot to range-extended/PHEV. It also seeks to rebuild moats via AI capability (in-house chips + VLA foundation model).

**② AI investment remains intact:**

a. In-house compute stack near deployment: the 5nm 'Mach 100 (M100)' chip will ramp soon, delivering 2,560 TOPS per vehicle with dual-chip config. It debuts on the new L9 Livis and underpins making the VLA model standard across the fleet in 2026.

b. Embodied intelligence: R&D is expanding into 'spatial robotics', integrating foundation models, in-house chips, and a robotics OS. The first two-wheeled embodied robot may debut in 1H this year per market chatter.

**From the current share price perspective:**

The company still targets 20%+ YoY growth in 2026 deliveries, implying ~480k units. The uplift is expected from three areas: (i) a full L-series refresh, (ii) a full-year contribution from i6 (launched in 2H25), and (iii) incremental volume from the BEV flagship i9 in 2H.

**But considering:**

a) Intensifying competition: rivals are launching large range-extended SUVs against the L-series in the RMB 250k–350k band, creating dense encirclement.b) i6 is a volume driver but lowers ASP: as a lower-priced core model, it structurally drags blended ASP.c) i9 is not a volume model: as a BEV flagship for brand and tech validation, its volume ceiling is limited.

Under a base case, Dolphin Research estimates 2026 deliveries at ~447k–467k (+10%–15% YoY), below the 20%+ company target.

On revenue, with rising mix of higher-priced refreshed L9/L8 and steady i6 volume, full-year ASP is estimated at RMB 230k–245k. Adding other revenue (charging network, parts and services, etc.) of ~RMB 6.5bn, full-year total revenue is ~RMB 113.7bn–118.5bn.

With ample cash on hand (~RMB 91.7bn) and parallel advances in embodied intelligence (M100, VLA, humanoids) and positive cash generation from autos, we assign 1x P/S under a base case. That implies fair value of ~RMB 113.7bn–118.5bn, broadly in line with the current US market cap of ~RMB 114.6bn.Even considering potential AI optionality, upside appears limited, and a 'turnaround from distress' has yet to emerge.

**Detailed analysis below:**

With deliveries already disclosed, the key incremental datapoints are: **1) Q1 vehicle GPM; 2) Q2 2026 outlook.**

**I. Vehicle GPM plunged**

Starting with the core vehicle business: management had pre-guided Q1 vehicle GPM at ~5%, citing purchase-tax subsidy cushions, higher i6 mix, and L-series clearance. Consensus was also ~5%.The actual Q1 vehicle GPM was 6.1%, down 1,070bps QoQ from 16.8%, only ~100bps above the low bar. ASP pressure plus cost inflation dragged GPM into the mud, highlighting the intense selling pressure.

(Note: Q2 2022 vehicle GPM excludes an RMB 800mn+ contract loss; Q2 2023 excludes RMB 400mn warranty reserves.)

**From a per-vehicle economics lens:**

**1\. ASP fell sharply QoQ on mix shift and deeper promos**

Q1 ASP was ~RMB 226k, down ~RMB 24k QoQ and below RMB 234k consensus, leading to a revenue miss. Two drivers:

**① Higher i6 mix, lower Mega mix:**

Mix shifted materially down. The lower-priced i6 surged to ~60% of mix, while the high-priced Mega fell by ~2ppt QoQ to ~1.4%.The combined impact pushed down the blended ASP.

**② Deeper discounts on L-series core models:**

The L-series faced both internal and external pressure: internal competition from the lower-priced i6 and external pressure from rival large range-extended SUVs. Competition turned white-hot.Li Auto expanded discounts vs. Q4: roughly RMB 36k on L6, RMB 45k on L7/L8, RMB 50k on L9, and ~RMB 17k on Mega, plus insurance subsidies and 0%/low-APR loans. Even so, the L-series kept sliding: L-series sales fell ~64% YoY to ~32k in Q1, and total sales were up only ~2% YoY to 95k thanks to the i6 backfill.

**2\. Per-unit cost rose ~RMB 5k QoQ; upstream inflation eroded margins**

Per-unit cost was ~RMB 213k, up ~RMB 5k QoQ. Despite the higher i6 mix, costs still rose due to three factors:

① Weaker scale: Q1 deliveries of 95k were down ~13% QoQ, lifting per-unit D&A.② Input cost inflation: storage chips, commodities, and batteries moved up. Management estimated a ~300bps hit to i6 margins from storage and other key parts.③ i6 purchase-tax subsidy: to offset consumer caution after policy changes, Li Auto offered ~RMB 15k subsidy for eligible i6 orders locked by Oct 31, 2025 and delivered in 2026, adding to cost.

**3\. GP per vehicle only ~RMB 14k, down ~RMB 28k QoQ**

GP per car dropped to ~RMB 14k in Q1 from ~RMB 42k in Q4, a ~RMB 28k QoQ decline. Vehicle GPM fell to 6.1%, near historical lows.This underscores the severity of current pricing pressure.

**II. Q2 revenue and volume guides both disappointed**

**a) Volume guide missed; refreshed L9 orders look soft**

Q2 deliveries guided at 95k–100k, below 108k Street and -10%–14.4% YoY. With 34k in Apr, implied May/Jun average is ~30.5k–33k.That implies a decline vs. Apr, suggesting muted incremental orders.

The refreshed L9 launched and started deliveries on May 15. The soft guide indicates the L9 order intake is ordinary, failing to drive a strong inflection, while i6 backlog is being digested.Overall, the new model cycle boost has not yet materialized.

**b) Revenue guide also missed**

Q2 vehicle revenue guidance of RMB 24.1bn–25.4bn is below RMB 26.3bn Street and -16%–20% YoY. Implied ASP is ~RMB 238k, up ~RMB 12k QoQ from a low base but below the RMB 245k market view.This again points to an underwhelming uplift from the refreshed high-end L9.

Positively, management expects vehicle GPM to recover to ~10% in Q2 from 6% in Q1 as the L9 ramps. But that is still well below the prior 20% norm, implying limited margin repair and persistent earnings pressure.

**III. Opex discipline**

**1) R&D: down QoQ, but full-year guide up**

Q1 R&D was RMB 2.72bn, down ~RMB 300mn QoQ from ~RMB 3.02bn, roughly in line. The QoQ decrease likely reflects timing and seasonality rather than strategy.Management guided full-year 2026 R&D at ~RMB 12.0bn, up ~6% YoY vs. RMB 11.3bn in 2025, with focus on:

a. Front-loaded investment for a dense new-model cycle: accelerated development across refreshed L6/L7/L9 and the new full-size BEV SUV i9.

b. Continued 'All in AI' funding: AI was over half of 2025 R&D at \>RMB 6.0bn. About 60% goes to AI infrastructure (foundation model, in-house inference chip, OS, and cloud/edge compute), and about 40% to productization (Li Assistant, multimodal agents, smart cockpit, intelligent manufacturing and BI), supporting OTA coverage of the in-house AD model on AD Max trim.

**For 2026, AI investment likely remains ~RMB 6.0bn, with three key thrusts:**

① In-house compute stack: the 5nm M100 near mass production, dual-chip 2,560 TOPS per vehicle, first on L9 Livis. VLA to be standard across the lineup in 2026.ADAS 9.0 with M100 targets more human-like decisions in complex scenes vs. 8.0 and smoother control; next steps include scaling data inputs and improving short-term causal reasoning, with a goal to match Tesla FSD v14 in the US by 2H.

② Embodied intelligence: expanding into 'spatial robotics' integrating foundation models, in-house chips, and robotics OS. Li Auto notes humanoids are likely \>3 years from broad commercialization akin to NEVs circa 2010–2015, with multiple hard problems yet to resolve.

③ L4 autonomy push: target to achieve L4 by no later than 2028.

**2) SG&A fell QoQ with solid controls**

Q1 SG&A was RMB 2.05bn, down ~RMB 600mn QoQ from ~RMB 2.65bn and below Street (~RMB 2.26bn). Key drivers were:

a. Organization and headcount optimization: approx. 15% attrition among frontline store sales trimmed payroll.b. Seasonality: no new model launches in Q1 reduced marketing spend.c. Channel strategy pivot from expansion to refinement: proactively closed or optimized low-efficiency stores. In Q1, retail centers fell by 31 net and service centers by 9 net.

**IV. Revenue declined YoY again**

With deliveries known, Q1 total revenue was ~RMB 23.0bn, slightly below Street, at -11.4% YoY.

Vehicle sales revenue was RMB 21.5bn, missing due to the hot-selling low-priced i6 dragging ASP, plus heavier promotions on the legacy L-series. Other revenue was RMB 1.45bn, down ~RMB 70mn QoQ but +16% YoY as the installed base grew, lifting parts and services.

Overall GPM was 7.9%, down ~1,000bps QoQ from 17.8%, mainly on the vehicle GPM drop of 1,070bps to 6.1%. Other revenue GPM was ~34.5%, down ~150bps QoQ, likely as Li Auto increased free parts, compressing services margin.

**V. FCF burned sharply, but liquidity remains strong**

Q1 operating cash flow was -RMB 6.1bn, down ~RMB 9.6bn QoQ. Capex rose ~RMB 250mn QoQ to RMB 1.3bn, taking FCF to -RMB 7.4bn, down ~RMB 9.9bn QoQ.

Two main reasons drove the cash drain: a sharp OP decline to -RMB 3.0bn, as operating leverage failed and GPM fell, and a reduction in accounts payable as the company proactively paid suppliers, further pressuring operating cash flow.

Even so, cash remains ample. By quarter-end, cash and equivalents were RMB 91.7bn (net cash RMB 84.3bn), keeping liquidity risks manageable and funding the new model cycle and AI investment.

<End here\>

Dolphin Research archives for reference:

**Earnings reviews:**

Sept 28, 2025 i6 launch review: [理想（含发布会实录）：i6 订单火了，为何股价还是 ‘见光死’？](https://longportapp.cn/zh-CN/topics/34579320?app_id=longbridge&utm_source=longbridge_app_share&channel=t34579320&invite-code=4NOXYT&locale=zh-CN&community_badge=1&profile_following_followers_activities=1)

Aug 28, 2025 earnings take: [理想: 增程已老、纯电难混，i6 能否逆风翻盘？](https://longportapp.cn/zh-CN/topics/33431267?app_id=longbridge&utm_source=longbridge_app_share&channel=t33431267&invite-code=4NOXYT&locale=zh-CN&community_badge=1&profile_following_followers_activities=1)

Aug 28, 2025 call notes: [理想 (2Q25 纪要）：回归单一 SKU 的爆品模式](https://longportapp.cn/zh-CN/topics/33444867?app_id=longbridge&utm_source=longbridge_app_share&channel=t33444867&invite-code=4NOXYT&locale=zh-CN&community_badge=1&profile_following_followers_activities=1)

Aug 9, 2025 i8 launch review: [理想：i8 光速认怂，竟还救不起理想？](https://longportapp.cn/zh-CN/topics/32789622?app_id=longbridge&utm_source=longbridge_app_share&channel=t32789622&invite-code=4NOXYT&locale=zh-CN&community_badge=1&profile_following_followers_activities=1)

May 29, 2025 earnings take: [增程已老、纯电难料，理想的现实太 ‘骨感’](https://longportapp.cn/zh-CN/topics/30164891?app_id=longbridge&utm_source=longbridge_app_share&channel=t30164891&invite-code=4NOXYT&locale=zh-CN&community_badge=1&profile_following_followers_activities=1)

**Deep dives:**

**Jun 24, 2025:** [**问界 VS 理想：双雄争霸，谁是赢家？**](https://longportapp.cn/zh-CN/topics/31060822?app_id=longbridge&utm_source=longbridge_app_share&channel=t31060822&invite-code=4NOXYT&locale=zh-CN&community_badge=1&profile_following_followers_activities=1)

**Jun 25, 2025:** [**赛力斯 vs 理想：谁才是国货 ‘BBA’ 的天选真命？**](https://longportapp.cn/zh-CN/topics/31114489?app_id=longbridge&utm_source=longbridge_app_share&channel=t31114489&invite-code=4NOXYT&locale=zh-CN&community_badge=1&profile_following_followers_activities=1)

Jun 30, 2021, New EV trio comparison – Part II: [造车新势力（下）：五十天翻倍，三傻能继续狂奔](https://longbridgeapp.com/topics/899416)

Jun 23, 2021, New EV trio comparison – Part I: [造车新势力（中）：市场热情消减，三傻靠什么夯实地位？](https://longbridgeapp.com/topics/882016)

Jun 9, 2021, New EV trio comparison – Part I: [造车新势力（上）：投对人，做对事，盘一盘新势力的人和事](https://longbridgeapp.com/topics/849272)

Risk disclosure and disclaimer: [海豚研究免责声明及一般披露](https://support.longbridge.global/topics/misc/dolphin-disclaimer)

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## Comments (7)

- **你好。hi · 2026-05-29T14:40:31.000Z**: I feel he's still a bit too pessimistic here. I just went to test drive the new L9lives today, wow, it was like it was free. Even four dealerships were fighting over my salesperson, and I barely managed to snag a half-hour test drive slot. As soon as I got out of the car, there was a huge crowd of s
  - **蔚小特** (2026-05-29T19:54:25.000Z): You should continue to add to your position quickly
- **稳住我们能赢T_T · 2026-05-29T10:06:49.000Z**: Auto stocks have been really terrible this year, and the second half will be even worse.
- **新用户_6688YA6Y8o · 2026-05-29T09:48:26.000Z · 👍 1**: Invest in a company that hasn't been profitable for a long time?
  - **长桥诺大王** (2026-05-29T19:06:25.000Z): Haha
  - **Dolphin Research** (2026-05-31T02:01:38.000Z): Right now, Li Auto is indeed not the best choice.
  - **新用户_6688YA6Y8o** (2026-05-31T04:07:54.000Z): Invested in Xiaomi, probably still need two or three years.