Six months ago, Li Auto was the undisputed king of Chinese EV startups. Today, NIO has posted its first consecutive quarterly profit, Li Auto’s net income has collapsed 99%, and the competitive dynamics of China’s new energy vehicle market have fundamentally shifted.
The earnings comparison is based on NIO’s Q1 2026 financial-results release, cross-checked with CnEVPost coverage of Li Auto’s Q1 results.
The Fall of the Weekly Sales Chart King
For 36 consecutive weeks through early 2025, Li Auto dominated the Chinese new energy vehicle startup sales charts. Every Monday morning, like clockwork, the company would publish the weekly ranking, and the comment sections would overflow with “far ahead” — Li Auto’s unofficial slogan. The rhythm was seamless: the chart was the advertisement, and the advertisement drove sales. Then, in the first week of 2025, XPeng dethroned Li Auto from the top spot, delivering a sales figure that halved Li Auto’s weekly volume. By March 2025, the China Association of Automobile Manufacturers (CAAM) issued an official notice calling the weekly rankings “a driver of involution-style vicious competition” and urging companies to cease publication. Li Auto’s last complete weekly chart appeared in the 10th week of 2025. The chart was gone, and Li Auto’s most potent marketing weapon disappeared with it. The unraveling continued into 2026. By January, both the Li Auto L8 and L9 — the twin pillars of the company’s extended-range EV (EREV) strategy — had fallen out of the top 10 EREV models by sales. The AITO M7, powered by Huawei’s technology, surged past 22,000 monthly units to claim the top EREV position. Li Auto, which had built its brand on the EREV concept, was watching its competitive advantage erode in real-time.
NIO’s Financial Turnaround: From Survivor to Contender
NIO’s Q4 2025 results, released in early 2026, marked a historic milestone. For the first time in its 11-year history, the company reported a GAAP operating profit of 807 million RMB ($111 million). On a non-GAAP basis, operating profit reached approximately 1.25 billion RMB (about $3.45 billion), with a vehicle gross margin of 18.1%. The momentum carried into Q1 2026, where revenue surged 112.2% year-over-year to 25.53 billion RMB and the company posted 66.8 million RMB (about $9.2 million) in non-GAAP operating profit — its second consecutive quarter of profitability. The turnaround was driven by both product success and disciplined cost management. The all-new ES8, launched in September 2025, achieved 100,000 cumulative deliveries in just 215 days, setting a record for Chinese-brand vehicles priced above 400,000 RMB (about $55,000). The ONVO L90 sub-brand vehicle surpassed 50,000 cumulative deliveries with a BaaS (Battery-as-a-Service) starting price of 179,800 RMB. Behind the scenes, NIO slashed R&D spending from 3.18 billion RMB in Q1 2025 to 2.03 billion in Q4 — a reduction of over one-third — while maintaining product momentum.
Li Auto’s Struggles: Cash-Rich but Direction-Poor
Li Auto’s 2025 full-year numbers tell a sobering story. Full-year net profit collapsed to just 20.2 million RMB in Q4 — a 99.4% plunge from the 3.5 billion RMB profit in the same quarter of 2024. The full-year operating result was an actual loss of approximately 520 million RMB; the 1.1 billion RMB net profit was entirely sustained by non-operating income — primarily interest earnings and investment returns from the company’s 101.2 billion RMB cash reserve. The company’s Q1 2026 delivery guidance of 85,000-90,000 units represented a year-over-year decline of 3-8.5%. The root cause was multi-layered. The EREV moat that once protected Li Auto had evaporated as competitors flooded the market with their own extended-range models. The company’s first pure-electric model, the Li i8, sold just 2,212 units in its debut month. A wave of senior executive departures in 2026 — including the heads of the second product line, foundation AI model, autonomous driving, SoC development, and intelligent driving product — suggested deep organizational turbulence. Li Xiang, the company’s famously confident founder, issued a rare mea culpa, admitting: “Our biggest mistake was managing a direct-sales system with dealership management methods.” Source: Jiemian News via Sina Finance (finance.sina.com.cn), May 23, 2026. Author: Xiang Xianzhi.
Sources
- Markets Insider, NIO Inc. reports unaudited first-quarter 2026 financial results
- StockTitan, NIO reports unaudited first-quarter 2026 financial results
- CnEVPost, Li Auto Q1 2026 earnings
