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on august 28, li auto released its second quarter financial report. after the results, li auto’s us stocks closed down 16.12%.

bloomberg commented on the financial report, saying that despite a rebound in sales, profits fell short of analysts' expectations, and price cuts across the board for its products put pressure on earnings.

the financial report shows that in the three months ending in june, ideal auto achieved a net profit of 1.1 billion yuan (equivalent to 154.4 million u.s. dollars), which was lower than the average forecast of 1.82 billion yuan in the bloomberg survey. its net profit fell by 52.3% year-on-year.

ideal auto said that its total revenue increased by 10.6% year-on-year to 31.7 billion yuan, basically in line with market expectations; the delivery volume in the same period was 108,581 vehicles.

the company expects deliveries to reach 155,000 vehicles in the three months to september, higher than analysts' estimates of 137,725. li auto said revenue is expected to reach as high as 42.2 billion yuan, compared with market estimates of about 39.7 billion yuan.

li auto's l-series extended-range electric vehicles were the main driver of the sales growth. the l6, the smallest and cheapest sport utility vehicle in the series, has been popular with consumers since its launch in april, with sales exceeding 20,000 units in both june and july.

li tie, chief financial officer of ideal auto, pointed out in the announcement that as ideal l6 production stabilizes and cost-cutting and efficiency-enhancing measures take effect, profit margins and cash flow are expected to increase in the second half of the year. "while optimizing the cost structure, we will firmly invest in technology and product innovation to promote steady business growth."

however, ideal's first all-electric multi-purpose vehicle, which has a starting price of over 500,000 yuan, has performed poorly since its launch in march, prompting the company to lower its sales target for the model and focus on core users.

the company said it is trying to boost sales in the rest of the year, as it only achieved about 30% of its annual target of 800,000 vehicles in the first seven months of 2024. domestic media reported that ideal auto has internally lowered its full-year sales target due to mediocre performance; facing strong resistance from fierce competition, the company also lowered the retail prices of all its products in april.