Li Auto said its first-quarter 2026 automotive sales revenue was 21.5 billion yuan and its car gross profit margin fell to 6.1%, a sharp drop from 16.8% in the previous quarter. The company released the results after the Hong Kong stock market closed on May 28, and the numbers showed that lower pricing was still dragging on the business.
That matters now because investors were already braced for a weak quarter. Li Auto had guided toward a low-end car gross margin of about 5%, and the consensus expectation for the quarter was only about that level, making the reported 6.1% result look less like a relief and more like a sign of how far profitability had already slipped. Total revenue came in at about 23 billion yuan, down 11.4% from a year earlier.
The average selling price of Li Auto’s cars declined by about 24,000 yuan from the prior quarter to 226,000 yuan, while the cost per vehicle rose by 5,000 yuan to 213,000 yuan. Sales volume also fell 13% from the previous quarter. The company said the i6 model’s share rose sharply to about 60%, while the Mega model’s share fell to about 1.4%.
The mix shift helps explain part of the pressure. Li Auto offered a purchase tax subsidy of about 15,000 yuan for the i6 and kept increasing discounts on the L6, L7, L8 and L9 models during the quarter, pushing prices lower just as costs moved the other way. That combination left the car business with less room to absorb the hit, even before broader weakness in scale effects was taken into account.
Li Auto’s second-quarter guidance suggested the damage had not yet been repaired. The company said it had not yet reached the stage of turning around from difficulties, leaving investors with a tougher question than the first-quarter miss itself: how long the pricing pressure can continue before the business finds a floor. For traders watching the barclays share price and the wider China auto tape, the report was another reminder that margin recovery is still ahead, not behind.
