Down 75%, This Tesla Rival Continues to Grow Vehicle Deliveries in 2026

Aditya Raghunath

Thu, September 3, 2026 at 2:30 PM GMT+3 5 min read

Buy Sell cards by Kelly Sikkema via Unsplash

Li Auto's (LI) stock has had a brutal run in recent years. Shares of the Chinese electric vehicle maker are down around 75% from their record high, valuing it at a market cap of $10.3 billion.

But the stock price only tells part of the story. While the stock has struggled, the company keeps adding customers amid rising vehicle deliveries. Let's see if LI stock is a bargain buy or a value trap in September 2026.

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Li Auto Increased Vehicle Deliveries in August

Li Auto delivered 37,679 vehicles in August 2026, according to a company statement. That pushed cumulative deliveries to 1,801,834 as of Aug. 31. For comparison, the month before, Li Auto delivered 30,468 vehicles in July, bringing cumulative deliveries to 1,764,155 as of July 31.

Put simply, Li Auto sold more cars in August than it did in July. The company increased deliveries by 32% year-over-year (YoY) last month, which is impressive given a challenging macro environment.

The carmaker ended August 2026 with 487 retail stores across 160 cities, along with 533 servicing centers and authorized repair shops in 218 cities. It also had 4,162 supercharging stations equipped with 22,939 charging stalls across China.

A Focus on Profit Margins

In Q2 2026, Li Auto reported revenue of CNY 25.7 billion, or $3.86 billion, down 15.1% YoY. However, sales grew by almost 12% sequentially in the June quarter.

However, investors are worried about narrowing profit margins. Li Auto reported vehicle margins of 9.4% in Q2, down from 19.4% last year. Comparatively, its gross margins fell from 20.1% to 11% over the last 12 months.

The company swung to a net loss of about 1.7 billion yuan, or roughly $255 million, in Q2, versus a net profit of 1.1 billion yuan, or about $165 million, in the same quarter last year.

Li attributed margin pressure to rising battery and memory chip costs, an industry-wide headwind. Notably, the EV maker has chosen not to pass those higher costs on to customers and is instead leaning on its battery and chip development to control expenses over time.

In fact, management expects long-term gross margin to settle between 15% and 20%. Even with the weaker margins, the balance sheet remains solid. The company ended the quarter with about 87.5 billion yuan in cash, or roughly $13.1 billion, and has repurchased 91.7 million Class A shares for about $631.5 million so far.

The Bull Case for LI Stock

Part of the bet on LI stock going forward rests on a wave of new vehicles.

The company is soon launching a new version of the Li MEGA, its flagship people mover, with updates to the interior, cabin technology, and ride quality.
That will be followed in mid-September by the Li i9, a new flagship battery electric SUV built for large families. Executives said on the earnings call that the model will run on the company's own Mach M100 chip and will support both self-driving and in-cabin AI features.
Li Auto is also rolling out its Mach VLA driver assistance software to vehicles running Nvidia's Thor and Orin X chips this September, extending newer software to more existing owners.

Overseas expansion is another piece of the growth story.

Li Auto has already launched vehicles in Kazakhstan and Uzbekistan, and it plans to hold a launch event in Dubai this month to begin sales in the Middle East. In Europe, the company plans to unveil the Li i6 at the Paris Motor Show in October, with sales starting in the fourth quarter. It also plans to bring the Li MEGA to Hong Kong and Singapore by year-end.

For the third quarter, Li Auto expects deliveries of between 95,000 and 100,000 vehicles, with revenue in a range of roughly 26.6 billion to 28 billion yuan, or about $3.99 billion to $4.2 billion, CFO Johnny Tie Li said on the call.

That outlook suggests the delivery growth seen in July and August isn't a one-time bump. Analysts tracking the Tesla (TSLA) rival forecast revenue to increase from $16.4 billion in 2025 to $25.7 billion in 2030.

The EV company is projected to end 2030 with free cash flow of $1.44 billion, compared to an outflow of $1.87 billion last year. If the stock trades at 11x forward FCF, which is reasonable, it could surge 50% within the next 40 months.

Out of the 18 analysts covering LI stock, two recommend "Strong Buy," one recommends "Moderate Buy," 13 recommend "Hold," and two recommend "Strong Sell." The average LI price target is $15.46, above the current price of $11.90.