Li Auto (NASDAQ:LI) Stock Upgrade: Navigating Q1 Losses

• Investment firm Macquarie upgraded Li Auto (NASDAQ:LI)'s rating to Neutral, signaling a potentially less pessimistic outlook for the Chinese EV manufacturer.
• Despite the upgrade, Li Auto reported challenging Q1 earnings, with significant drops in gross margin to 7.9% and vehicle margin to 6.1%, alongside a $0.15 loss per share.
• Amidst financial pressures, Li Auto demonstrated market expansion by increasing total vehicle deliveries by 2.5% and growing its retail and charging infrastructure across China.

Li Auto (NASDAQ:LI) is a Chinese company that designs, develops, and sells premium smart electric vehicles (EVs). It operates in a highly competitive EV market, facing rivals like XPeng. The company focuses on extended-range electric vehicles, which combine an electric motor with a small gasoline engine to generate additional power and extend driving range.

On May 29, 2026, investment firm Macquarie upgraded its rating for Li Auto from Underperform to Neutral. This change suggests a less pessimistic view of the stock's future performance. At the time of the rating change, the stock price was $15.54, near its 52-week low of $15.03.

This upgrade comes after Li Auto reported challenging first-quarter results. The company's gross margin, which is the profit made on sales, fell sharply to 7.9% from 20.5% a year ago. Its vehicle margin also dropped to 6.1% from 19.8%, indicating it is making less profit on each car sold due to discounts.

Financially, Li Auto announced total revenues of RMB 23.0 billion (US$3.30 billion), with vehicle sales decreasing 12.7% from the prior year to RMB 21.5 billion (US$3.10 billion). The company also reported a first-quarter loss of $0.15 per share, which was wider than the $0.13 loss analysts expected, as highlighted by Barron's.

Despite financial pressures, Li Auto increased its total vehicle deliveries by 2.5% year-over-year to 95,142 units. As reported by GlobeNewswire, the company is also expanding its physical presence, now operating 517 retail stores, 552 servicing centers, and 4,057 supercharging stations across China as of March 31, 2026.