Li Auto Stock Faces Moment of Truth; CEO Calls 2026 the ‘Final Window as 90% Profit Drop Looms

Li Auto LI +2.98% ▲ is facing a massive test today as it prepares to release its latest earnings report. While its rival Nio NIO -4.04% ▼ recently surprised everyone with its first-ever profit, Li Auto is expected to show a painful 90% drop in earnings. The company has been stuck in a brutal price war in China that is eating away at its once-strong profit margins. Investors are nervous because the company has seen eight months of sales declines and recently fell into its first quarterly loss in years.

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Li Auto Navigates a Shrinking Window

Founder and CEO Li Xiang has called 2026 the “final window” for the company to prove it can lead in AI and smart cars. To win this battle, Li Auto is shifting its focus toward “embodied AI,” which uses smart robots to help run its factories. The company even has a secret internal team named “Nexus” that is developing humanoid robots to work on the factory floor. This move shows that Li Auto is trying to become a tech giant to survive the pressure from its rivals.

Analysts Take a Cautious Stance

The mood on Wall Street has turned cold over the last few months. JPMorgan’s Nick Lai recently downgraded the stock to a “Sell,” warning that a lack of new car models this year could leave Li Auto behind. Other major firms like Citigroup and Jefferies have also lowered their price targets. While some experts still see a potential upside from the current price of $17.76, most are waiting to see if the company can protect its large pile of cash during this slump.

The Numbers Do Signal a Tough Road

When the full results come out, the delivery data will be the main focus. Analysts expect earnings to drop to just $0.05 per share, which is a huge fall from the $0.45 they reported a year ago. February deliveries were also weak, with only 26,421 vehicles handed over to customers. On the bright side, the company still has over $7 billion in cash, which gives it a safety net that many other EV startups simply do not have.

Can Li Auto Bounce Back?

The big question is whether Li Auto can reclaim its spot as a stable leader in the EV market. Unlike Nio, which is seeing its sales grow by nearly 90%, Li Auto’s growth has slowed down quite a bit. If the company can show that its new Li i6 and i8 models are popular, the stock might finally find its footing. For now, everyone is watching to see if Li Auto can pull off a surprise and prove the doubters wrong.

Is Li Auto Stock a Good Buy?

Turning to Wall Street, analysts have a Hold consensus rating on Li Auto stock (LI) based on one Buy, five Holds, and two Sell ratings assigned in the past three months, as indicated by the graphic below. Furthermore, the average 12-month LI price target of $19.43 per share implies 6.2% upside potential.

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