LI Stock: Is Li Auto the New Tesla?

Founded in 2015, Beijing-based Li Auto [LI] manufactures electric vehicles (EVs) for the consumer market; it originally rose to prominence for its extended range EVs, which combined electric power and a gasoline generator to boost time between charging. While its primary revenue stream is vehicle sales, it has monetized its after-sales ecosystem, including value-added services, charging stations and driver-assistance systems. 

However, staying ahead in the saturated Chinese EV market is proving to be a challenge. Tepid demand coupled with fierce price wars, decreased subsidies and increased material costs have weighed on all of the big names in the sector. In early March the company laid out its plans to become a leader in embodied artificial intelligence (AI), with a pivot to robotics not unlike that of Elon Musk’s Tesla [TSLA]. Ahead of its earnings report on March 12, OPTO examines the road ahead for Li Auto. 

Li’s Embodied AI Ambitions

Chinese automakers as a whole had a shaky start to 2026, with only seven of the 14 top brands achieving year-over-year growth in vehicle deliveries in February — and only Changan Auto [000625.SZ] seeing sequential growth. 

Li Auto, for its part, delivered 26,421 units, up a marginal 0.60% year-over-year but down 4.51% from December 2025. The company is targeting 500,000 deliveries in 2026, after falling short of the 2025 target of 640,000 vehicles. 

Flagging sales have already impacted the company’s balance sheets — a 39% drop in deliveries in Q3 2025 translated into revenue of RMB27.4bn, down 36.2% year-over-year. The ongoing recall of Li MEGA, its 2024 model, over battery-related fire hazard concerns, further weighed on margins, reported at 16.3% versus 21.5% in the year-ago quarter. 

Then, on March 6, the company revealed it was moving forward with a humanoid robotics project named “Nexus”, aiming to debut its first two-wheel model on factory floors in mid-2026. A second, bipedal model is also under development. Founder and CEO Li Xiang has reportedly labeled 2026 Li Auto’s “final window” to become a leading AI company, with a focus on embodied AI for manufacturing use cases. 

Li Auto is scheduled to report Q4 2025 and FY 2025 earnings on March 12 before the market opens. Investors will be looking for further updates on the company’s Tesla-style pivot, as well as signs that EV sales are recovering. 

Li Stock Performance

Li Auto began trading American depositary shares on the Nasdaq on June 30, 2020, at a price of $11.50. The stock has exhibited considerable volatility since then, with a trough at $12.52 in October 2022 and an all-time-high of $46.44 on February 27, 2024. 

While LI stock spent much of 2025 around the $30-mark, it began its descent in October and trades at $17.76 as of March 10. The stock is down 35.56% in the past 12 months and up 4.9% in the year to date, supported by delivery stabilization and investor interest surrounding the recent robotics pivot. 

Rekindling the EV Spark: LI vs NIO vs XPEV

In a crowded market, Chinese EV makers are doing what they can to get ahead. Li peers Nio [NIO] and XPeng [XPEV] have also captured investor attention in recent months as they look for avenues for diversification. 

Xpeng similarly recorded a year-over-year fall in sales, of 49.9%, in February. However, recent releases have helped XPEV stock rally. On March 9, Morgan Stanley issued positive remarks about the test drive of its “Vision-Language-Action” autonomous driving model VLA 2.0. The automaker has already produced a line of humanoid robot products. In late January it announced plans to build a humanoid robot factory in Q1, with mass delivery planned before year-end. 

While Nio has not announced any robotics initiatives, CEO William Li highlighted that the company was looking to leverage AI to enhance competitiveness and efficiency in 2026. The automaker made waves, however, with its Q4 earnings on March 10 beating Wall Street expectations. Strong deliveries and a mix of new models allowed for 81% year-over-year growth in vehicle sales, giving Nio its first non-GAAP operating profit of RMB1.25bn. Management forecast 90–97% growth in vehicle sales for Q1; NIO stock rose some 10% in the aftermath. 

Here is how the three stocks’ fundamentals currently compare:  

^{Source: Yahoo Finance}

LI Stock: The Investment Case

The Bull Case for Li Auto

After a rough 2025, stabilizing vehicle deliveries in early 2026 represent a potential light at the end of the tunnel. If this growth accelerates, the company could leverage revenue inflow to fuel expansion in robotics manufacturing. 

In that regard, the pivot to robotics appears well-timed — EV sales in China are expected to slow to 15.2% in 2026, compared to 28.2% in 2025, Reuters reported. By targeting robotic manufacturing, the company stands to win big; China remains the world leader in industrial robot installation, accounting for 54% of all new installations worldwide in 2024, equivalent to approximately 295,000 units. By focusing on robots for factory floors, rather than consumer models, Li could potentially capture a portion of a well-supported market with higher potential margins. 

The Bear Case for Li Auto

However, it is unlikely that the new business line would make enough of a contribution in the short term to offset falling vehicle sales. On February 9, JPMorgan downgraded Li Auto from ‘neutral’ to ‘underperform’, with a price target of $14.00 representing a downside of 21.17%. Analysts cited the lack of new models, even as competitors release overlapping extended range EVs. Higher prices for lithium, copper and storage chips are also expected to put pressure on the automaker’s bottom line. 

Ultimately, sector headwinds are fueling expectations of declining profits, and Li Auto’s financials could dip into the red if trends continue. Additionally, although Li Auto has expanded into smaller markets such as Uzbekistan, overseas sales remain comparatively small, meaning that the conditions of the saturated Chinese market continue to heavily influence the company’s primary revenue stream.

Conclusion

Difficult conditions in China’s domestic EV markets have weighed on all major players in the sector, Li Auto included. While sales stabilized in February, the company appears to be targeting a pivot to robotics and embodied AI to capture stable growth. Ahead of the earnings call before markets open on Thursday, investors will be keen to hear more about management’s plan for this new venture. 

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