Li Auto: Should We Be Skeptical Amid Broader Sector Recovery?

Michael Ngan184 FollowersFollow5ShareSavePlay(8min)CommentsSummaryLi Auto has had more experience than expected in 2025, due to intensified rivalry and pullbacks on subsidies.Other than SUV rivalry, the company does have to manage its over-reliance on EREVs, where BEVs are catching up with improving battery technologies.I think LI's product-market fit and technological competitiveness are both questioned—which could make management's plan of reviving sales more challenging than expected.My rating for Li Auto is a 'Hold,' being cautiously optimistic while awaiting concrete data from 1Q26 to see how they are actually driving sales.Getty Images Update since 2Q25 Li Auto (LI) has performed poorly since my last thesis in mid-2025. At the time, auto sales in China have been facing headwinds amidst a broader curb of price competition. There were firms that sufferedThis article was written byMichael Ngan184 FollowersFollowI specialize in fundamental research in the H and A share markets.Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.