Li Auto shares hit a new 52-week low on Thursday after the Chinese electric vehicle maker reported mixed first-quarter results that left investors wanting more. The stock fell nearly 5% to $15.01, and the market's reaction makes sense when you dig into the numbers.

Revenue came in at 23.0 billion Chinese yuan ($3.33 billion) for the quarter ended March 31, down 11.4% from a year ago but above the analyst consensus of $3.14 billion. That's the good news. The bad news: the company posted an adjusted net loss of 2.09 yuan per American depositary share, or 30 cents, while Wall Street had been expecting a profit of 7 cents per share. Ouch.

Vehicle sales, the core of the business, fell 12.7% year over year to $3.1 billion. The culprit? A lower average selling price driven by changes in product mix. Sequentially, vehicle sales dropped 21%, hurt by the Chinese New Year holiday period and continued pricing pressure from product mix shifts. Li Auto delivered 95,142 vehicles during the quarter, up slightly from 92,864 a year earlier but down from 109,194 in the prior quarter.

For context, rival NIO delivered 83,465 vehicles in the same period, up 98.3% year over year (though down 33.1% sequentially). Tesla delivered 358,023 vehicles globally, up 6% from a year earlier but down 14% from the previous quarter. So Li Auto's delivery numbers aren't terrible in isolation, but the profitability story is where things get ugly.

Margins Got Squeezed Hard

Li Auto's vehicle margin fell to 6.1% from 19.8% a year ago. Gross margin dropped to 7.9% from 20.5%. That's a brutal compression. CFO Tie Li blamed it on "Li i6 delivery-related measures, raw material price volatility and the company's model refresh cycle." In plain English: they're spending money to launch new models and dealing with higher costs, and they've been cutting prices to move metal.

The adjusted operating loss was 2.8 billion yuan ($410.4 million), compared with adjusted operating income of 639.3 million yuan in the prior-year quarter. Adjusted net loss totaled 2.1 billion yuan ($305.6 million), versus adjusted net income of 1.0 billion yuan a year earlier. The company still has a decent cash pile — $13.7 billion as of March 31 — but cash flow turned negative. Net operating cash outflow was 6.1 billion yuan ($883.0 million), compared with a 1.7 billion yuan outflow a year earlier, mainly due to lower customer cash receipts from reduced vehicle pricing. Free cash flow outflow was 7.4 billion yuan ($1.1 billion), versus an outflow of 2.5 billion yuan a year earlier and positive free cash flow of 2.5 billion yuan in the previous quarter.

Retail and Charging Expansion Continues

Despite the financial headwinds, Li Auto is still building out its infrastructure. As of March 31, it operated 517 retail stores across 160 cities, plus 552 service centers and authorized body and paint shops across 223 cities. Its charging network included 4,057 supercharging stations with 22,439 charging stalls. That's a lot of capital being deployed, which explains some of the cash burn.

Executives Talk Up Product Refresh and AI

Chairman and CEO Xiang Li said organizational and supply chain improvements helped the company regain the leading position among domestic auto brands in China's new energy vehicle market priced above 200,000 yuan during the first quarter. He highlighted the newly launched Li L9, which strengthens the flagship SUV lineup with upgraded technology and performance. He also pointed to the deployment of the company's in-house MAHE M100 chip and MindVLA large model as a major technology milestone.

The company expects the upcoming Li L8 launch at the end of June to help address broader market demand while supporting its AI and premium service initiatives. CFO Tie Li said profitability should gradually improve as deliveries recover, economies of scale return and the updated product lineup gains traction. The company also reiterated its commitment to a $1 billion share repurchase program while maintaining a strong cash position for future strategic investments.

Guidance Misses the Mark

For the second quarter of 2026, Li Auto expects revenue between 24.1 billion yuan and 25.4 billion yuan ($3.50 billion to $3.70 billion), representing a year-over-year decline of 20.2% to 16.0%. That came in well below the analyst consensus estimate of $4.17 billion. The company expects vehicle deliveries between 95,000 and 100,000 units, a year-over-year decline of 14.5% to 10.0%.

So the near-term outlook is weak, margins are under pressure, and the stock is at a 52-week low. Li Auto is betting that its product refresh and AI investments will turn things around, but for now, investors are hitting the brakes.