Chinese electric vehicle (EV) maker Li Auto (LI) reported disappointing results for the second quarter of 2025 and issued a weak outlook for Q3 2025, reflecting continued troubles amid intense competition. In reaction to the results, Bank of America downgraded LI stock to Hold from Buy while analysts at Barclays and U.S. Tiger Securities lowered their price targets to reflect continued weakness in the company’s deliveries.
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Notably, Li Auto reported a year-over-year decline in its Q2 adjusted earnings per share (EPS) and missed the Street’s expectations. Moreover, the company expects Q3 vehicle deliveries in the range of 90,000 to 95,000 units, reflecting a year-over-year decline of about 38% to 41%.
Bank of America Downgrades Li Auto Stock
Following the Q2 print, Bank of America Securities analyst Ming Hsun Lee downgraded Li Auto stock to Hold from Buy and lowered the price target to $26 from $31. The 4-star analyst explained that his rating downgrade was based on lower sales volume and gross profit margin guidance for Q3 2025.
Lee believes that Li Auto’s outlook reflects intense competition. Accordingly, the analyst lowered his sales volume estimates for 2025, 2026, and 2027 by 12%, 12%, and 8%, respectively. Furthermore, he increased his operating expenses to sales ratio projections by 2.1, 2.1, and 1.5 percentage points, respectively. Lee also cut his 2025, 2026, and 2027 non-GAAP earnings estimates by 38%, 33%, and 31%, respectively.
Analysts Lowered Li Auto Stock Price Targets
Meanwhile, Barclays analyst Jiong Shao lowered the price target for Li Auto stock to $24 from $31 and reiterated a Hold rating. Shao stated that the Q3 deliveries guidance seems soft, particularly in light of the fact that the newly launched first-ever BEV SUV i8 is expected to contribute about 8,000 to 10,000 units in the third quarter. He highlighted that, excluding i8, the decline in Q3 deliveries of LI’s EREV portfolio of flagship models would be steeper.
Shao contended that while Li Auto made some significant changes in terms of sales strategy, sales team organization, training, and store location choices, what is really needed is for the i6 model to be a top seller, particularly since it is designed to be a volume product. Shao expects the price of the i6 model to be in the low RMB 200,000 range as this model competes with Tesla’s (TSLA) Model Y and several Chinese Model Y challengers. In terms of profitability, Shao contends that Li Auto may barely break even in Q3, which could be a victory for many other loss-making EV players, but not a great outcome for the company, as it has been profitable for 11 straight quarters.
Additionally, U.S. Tiger Securities analyst Bo Pei cut his price target for Li Auto stock to $28 from $33, while reaffirming a Buy rating. Pei noted that Q2 deliveries increased by a modest 2% year-over-year to 111,074 units, but revenue declined by 4.5% due to a lower average selling price resulting from product mix changes and higher incentives.
Is Li Auto Stock a Buy Right Now?
Overall, Wall Street has a Hold consensus rating on Li Auto stock based on seven Holds, four Buys, and two Sell recommendations. The average LI stock price target of $28.13 indicates about 21% upside potential. LI stock is down 3% year to date.
More analysts might revise their price targets and ratings for Li Auto stock in reaction to Q2 results and outlook.
