Li Auto stock at risk ahead of earnings as analysts predict revenue drop

Li Auto stock price remains in a technical bear market after falling from its 2023 high of $47.3 to the current $17.15. It has slumped by 62%, erasing its market capitalization from $48 billion to $18 billion. What next for the stock ahead of its earnings?

Li Auto growth has stalled amid rising competition 

Li Auto, one of the top Chinese electric vehicles, has come under intense pressure in the past few years as competition in the industry rise.

The most recent numbers show that its growth has stalled. For example, data shows that its monthly deliveries have dropped substantially.

For example, Li Auto delivered 26,422 vehicles in February this year, down from the 26,500 it sold in the same month in 2025. This slowdown started and accelerated in the second half of last year, and analysts expect that the trajectory will continue as competition from companies like Nio, Xpeng, and BYD continues.

The most recent results showed that its deliveries dropped to 93,211 in the third quarter from 152,831 in Q3’24. As a result, its vehicle sales dropped by 37.4% to $3.6 billion, while its vehicle margin fell to 15.5% from the previous 20.8%. This margin pressure was mostly because of its recall of Li MEGA vehicle during the quarter.

Its total revenue dropped by 36.2% to $3.8 billion, while its operating expenses fell slightly to $793 million. Most notably, the company made a net loss of $87 million during the quarter.

Analysts predict a sharp revenue decline 

Analysts tracking the company expect that its business remained under pressure last quarter, a move confirmed by the delivery numbers. It delivered 109,194 vehicles during the quarter, down from 158,696 a year earlier.

The average estimate among analysts is that Li Auto’s revenue dropped by 34% YoY to CNY 29 billion, bringing the annual figure to 113 billion. 

Analysts also see the earnings per share (EPS) falling from CNY 3.79 to CNY 0.22, while its full-year EPS dropping from CNY to CNY 2.06.

The challenge for Li Auto is that Chinese competition is so stiff that it has little room for error. A good example of this is Nio, which published strong revenues and profit numbers this week.

The other challenge is that Beijing is starting to lower the incentives that have existed in the EV industry, a move analysts expect will lead to slower revenue growth.

Li Auto stock price technical analysis 

The weekly chart shows that the Li Auto share price formed a head-and-shoulders pattern last year, resulting in a sharp decline to $15, its lowest level since October 2022.

It has now stabilized at $17.40 recently, a crucial level that coincided with the lowest level June, July, and September 2024. It remains below the neckline of the head-and-shoulders chart pattern at $22 and the 50-week and 100-week Exponential Moving Averages (EMA).

Therefore, the stock will likely continue falling as sellers target the next key support level at $15. The bearish outlook will become invalid if it rises above the key resistance level at $19.46.

The post Li Auto stock at risk ahead of earnings as analysts predict revenue drop appeared first on Invezz