Li Auto (02015.HK) has seen its "sales champion" status become history, prompting the company to urgently adjust its organizational structure. Recently, reports indicated that at the beginning of 2026, Zhang Xiao, President of Li Auto's second product line, has left his position, and the company is restructuring its product line organization. On the sales front, for the full year 2025, Li Auto's cumulative deliveries reached 406,300 vehicles, representing a year-on-year decrease of 18.81%. Calculated against the revised-down sales target of 640,000 units, the company achieved only approximately 63% of its 2025 delivery goal. Regarding financial performance, in the third quarter of 2025, the company reported a net profit attributable to the parent company loss of 624 million yuan, ending a streak of 11 consecutive profitable quarters. Among the new automakers, Li Auto's 2025 delivery volume lagged behind Leapmotor, Harmony Intelligent Driving Alliance, Xiaomi Auto, and XPeng Motors, dropping from the industry's top position to fifth place. It has been noted that Li Auto is re-organizing its product line structure. Recently, Li Xiang, Chairman and CEO of Li Auto, stated: "In 2026, we will continue to operate with the management model of a startup company, focusing our energy and resources on creating genuine value, and making our cars intelligent partners that better understand user needs and automatically and proactively serve users." Li Auto's cumulative deliveries for 2025 reached 406,300 vehicles. Recently, reports indicated that at the beginning of 2026, Zhang Xiao, President of Li Auto's second product line, has left his position, and the company is restructuring its product line organization. Some sources suggest that Zhang Xiao's departure may be related to the underwhelming sales performance of the Li i8. Currently, Li Auto's product line organization will be adjusted into two lines: the first product line will be responsible for the MEGA, L9, L8, and L7 models, headed by Tang Jing; the second product line will be responsible for the i-series and the L6, headed by Li Xinyang. It is understood that previously, Li Auto internally structured three main product lines based on price segments: the first product line, led by Tang Jing, covered models priced above 400,000 yuan; the second product line, led by Zhang Xiao, primarily covered the 300,000 to 400,000 yuan price range; and the third product line, led by Li Xinyang, covered models priced below 300,000 yuan. During the Q3 2025 earnings call, Li Xiang stated, "Over the past three years, the founding team and I diligently studied the management systems of professional managers, forcing ourselves to accept various changes. However, we became a progressively worse version of ourselves. Companies like Nvidia and Tesla still manage themselves like startups today. If the world's strongest companies operate with a startup management model, what reason do we have to abandon the method we are best at?" Li Xiang explained, "Starting from the fourth quarter of 2025, we firmly returned to the management model of a startup company to face the challenges of the new era and new technologies." On January 1, 2026, while releasing delivery figures, Li Xiang again emphasized: "In 2026, we will continue to operate with the management model of a startup company, focusing our energy and resources on creating genuine value, and making our cars intelligent partners that better understand user needs and automatically and proactively serve users." Li Auto's reorganization of its product line structure is closely linked to the company's declining sales. In 2023 and 2024, Li Auto delivered 376,000 and 500,500 vehicles respectively, achieving year-on-year growth of 182.2% and 33.1%, and ranked first among new automakers for two consecutive years. However, entering 2025, Li Auto lost its "sales champion" status. At the beginning of 2025, Li Auto set a sales target of 700,000 vehicles for its supply chain, representing an approximately 40% increase over the previous year's deliveries. However, as deliveries slowed, reports emerged that Li Auto had revised its full-year sales target down from 700,000 to 640,000 units. For the full year 2025, Li Auto's actual cumulative deliveries reached 406,300 vehicles, a decrease of 18.81% year-on-year. Calculated against the revised target, the company achieved only about 63% of its 2025 delivery goal. Among the new automakers, Li Auto's 2025 delivery volume lagged behind Leapmotor, Harmony Intelligent Driving Alliance, Xiaomi Auto, and XPeng Motors, dropping from the industry's top position to fifth place. Net profit attributable to the parent company recorded a single-quarter loss of 624 million yuan. As deliveries declined, what was the state of Li Auto's profitability? In 2023, Li Auto achieved revenue of 123.851 billion yuan, a year-on-year increase of 173.5%, becoming China's first new automaker to reach the 100-billion-yuan annual revenue milestone; its net profit attributable to the parent company was 11.704 billion yuan, achieving comprehensive profitability since starting deliveries. However, in 2024, Li Auto reported revenue of 144.46 billion yuan, a year-on-year increase of 16.64%. During the same period, the company's net profit attributable to the parent company reached 8.032 billion yuan, a decrease of 31.37% year-on-year. In the first half of 2025, Li Auto achieved revenue of 56.172 billion yuan and a net profit attributable to the parent company of 1.743 billion yuan. However, in the third quarter, the company's revenue was 27.365 billion yuan, a decrease of 36.2% compared to the same period last year; it reported a net loss attributable to the parent company of 624 million yuan, compared to a profit of 2.8 billion yuan in the same period last year, ending a streak of 11 consecutive profitable quarters. It is important to note that Li Auto's Q3 2025 deliveries were 93,200 vehicles, while Q4 deliveries reached 109,200 vehicles. A financial officer from a listed company commented that it is still uncertain whether Li Auto incurred a loss in the fourth quarter of 2025, but a significant decline in full-year profit is undeniable. Notably, on October 31, 2025, the State Administration for Market Regulation announced that Li Auto, in accordance with the requirements of the "Regulations on the Recall of Defective Automotive Products" and the "Measures for the Implementation of the Regulations on the Recall of Defective Automotive Products," had proactively filed a recall plan with the administration. The announcement showed that the recall, numbered S2025M0174V, involves Li Auto recalling 11,411 units of the Li MEGA 2024 model produced between February 18, 2024, and December 27, 2024, starting from November 7, 2025. Li Auto explained that for vehicles within the scope of this recall, due to insufficient anti-corrosion performance of the coolant in this batch, specific conditions could lead to corrosion and leakage in the cooling aluminum plates for the power battery and front motor controller within the cooling circuit. This could cause warning lights to illuminate, power limitation, and an inability to power on the vehicle. In extreme cases, it could lead to thermal runaway of the power battery, posing a safety risk. According to earlier reports, on the evening of October 23, 2025, a Li MEGA vehicle suddenly caught fire while driving near the Caohejing Development Zone in Shanghai. On October 31, Li Auto announced that a fire incident involving a Li MEGA 2024 vehicle occurred in Shanghai on the evening of October 23rd, attracting significant attention from users, media, and the public. "Here, we first extend our sincere apologies to the vehicle owner and express our understanding of the concerns raised by our users." "The car fire and recall incident undoubtedly dampened consumer purchasing desire; Li Auto will need time to restore owner confidence," an automotive observer commented. Amid these various challenges, Li Xiang remained optimistic, stating: "In the past December, Li Auto achieved several business milestones: cumulative deliveries surpassed 1.5 million vehicles, making it the first domestic new automaker brand to reach this milestone; three main models, the Li L9, Li L7, and Li L6, simultaneously entered markets in Egypt, Kazakhstan, and Azerbaijan, initiating the brand's strategic layout across Central Asia, the Caucasus region, and Africa; the Li AI Glasses, Livis, were officially launched, receiving positive user feedback for their cutting-edge technology and practical experience."
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