# Quarterly Earnings

The Fall of the Profitability King: Li Auto’s Q1 Collapse Signals a Crisis in the EREV Moat

Li Auto has reported a historic Q1 2026 loss of 2.28 billion RMB, marking a dramatic fall for the former leader of China's EV profitability. A combination of intensified competition in the EREV segment and a shift toward low-margin models has crashed vehicle margins to just 6.1%, forcing the company to rely on its cash reserves as it pivots toward AI.