Li Auto (LI) reported its delivery figures for February 2026 on March 1. The company delivered 26,421 new vehicles in February. Combined with January's deliveries of 27,668 units, total deliveries for the first two months of 2026 reached 54,089 vehicles. Data from the Passenger Car Association showed that in January, China's overall passenger vehicle retail sales reached 1.544 million units, a year-on-year decrease of 13.9%. Retail sales of new energy passenger vehicles were 596,000 units, down 20.0% year-on-year. The penetration rate of new energy vehicles in the total domestic passenger vehicle retail market was 38.6%, a decline of 3 percentage points compared to the same period last year. Amid the sluggish start to the year for the domestic new energy vehicle market in January, Li Auto demonstrated strong market resilience through stable delivery performance, laying the groundwork for its annual sales target. By the end of February 2026, Li Auto's cumulative historical deliveries reached 1,594,304 vehicles, surpassing the 1.59 million milestone and indicating a continuously expanding customer base.

This performance is supported by its expanding sales and service network. Currently, Li Auto operates 539 retail centers across 160 cities in China, along with 548 after-sales service and authorized service centers covering 223 cities. The company has also put into operation 4,054 supercharging stations nationwide, equipped with 22,447 charging piles, steadily improving charging convenience for users.

Despite a steady start to the year, Li Auto faces significant market challenges. Financial reports revealed that the company's third-quarter revenue fell 36.2% year-on-year, with a net loss of 624 million yuan. This contrasts with net profits of 2.8 billion yuan in the third quarter of 2024 and 1.1 billion yuan in the second quarter of 2025. Industry analysis points to a J.P. Morgan report suggesting that the performance of the Chinese auto market this year will resemble a mix of conditions seen in 2018 and 2025. First, with overall passenger vehicle market growth turning negative (similar to 2018), the industry's full-year performance may be relatively weak. Second, driven by new model launches, seasonal fluctuations, and changes in profit expectations (similar to 2025), market volatility is expected to intensify. Ultimately, achieving absolute or relative returns will depend on whether corporate profits can exceed expectations, a challenge made more difficult against a backdrop of rising costs. Market forecasts suggest Li Auto has preliminarily set a growth target of approximately 40% for 2026. With the upcoming launch of the new L9 model in the second quarter, Li Auto's critical turnaround effort for 2026 is set to enter a decisive phase. As the new energy vehicle market transitions from rapid growth to high-quality development, it remains to be seen whether this transformation will help the company achieve its growth targets, warranting continued market attention.

UBS stated that Li Auto's current valuation level is attractive. The stock is trading at a valuation lower than over 95% of its history since listing, with net cash accounting for about two-thirds of its market capitalization, reflecting considerable market pessimism. With the L9 launch imminent, UBS believes a recovery is on the horizon. Given the attractive risk-reward profile, UBS reiterated its "Buy" rating. The bank believes that market sentiment is likely to improve gradually from now until the official second-quarter launch, which should also enhance investor visibility regarding updates for other models. The flagship SUV L9 is set for a refreshed launch in the second quarter, potentially driving a re-acceleration of growth from a low base in 2025. Despite challenges from rising commodity costs, the company's premium positioning and profit buffers are expected to make it more resilient than most peers. UBS views the current time as opportune for refocusing on the stock.

Li Auto is making significant bets on AI. In response to skepticism, CEO Li Xiang clarified that 70% of his focus remains on the automotive business. The company is fully committed to embodied intelligence, with the new L9 serving as its first major implementation platform. In early February, CEO Li Xiang promoted the new L9 and announced its official launch within the second quarter of this year. He stated, "Many people have asked me over the past two years if going all-in on AI means less focus on cars. On the contrary, we deeply understand that embodied intelligence must be built upon a good car to truly create value for users. Therefore, I spend 70% of my time focused on the car, which helps us better understand how to evolve a car into a true robot." Li Xiang added, "The new Li L9 is not just a good car; it is the pioneering work of an embodied intelligent robot." Huatai Securities released a report stating that Li Auto aims to become the top performer in the field of embodied intelligence within the next 3-5 years. The brokerage believes that organizational efficiency improvements could accelerate technology implementation, and that embodied intelligence achieving scenario-specific breakthroughs through VLA (Vision-Language-Action), combined with synergistic effects, will form the core of Li Auto's differentiated competitive advantage in 2026.