(Yicai) March 17 -- Li Auto’s stock price slid as the Chinese electric vehicle startup forecast lower revenue for this quarter after reporting a 32 percent drop in profit last year despite it delivering a record number of cars.

Li Auto [HKG: 2015] closed 7.2 percent lower at HKD105.10 (USD13.52) a share in Hong Kong today. In pre-market trading in New York, its stock [NASDAQ: LI] was down 1.6 percent at USD27.02  as of 4.36 a.m. local time.

Net profit was CNY8 billion (USD1.1 billion) in the 12 months ended Dec. 31, compared with CNY11.8 billion the year before, the Beijing-based company said in its latest financial statement on March 14. Revenue rose 17 percent to CNY144.5 billion (USD19.8 billion).

For the three months ending March 31, Li Auto said it expects revenue to decline by 3.5 percent to 8.7 percent to between CNY23.4 billion and CNY24.7 billion.

Deliveries soared more than 33 percent year on year to a record 500,508 in 2024, with sales up 15 percent at CNY138.5 billion. However, vehicle margin shrank to 19.8 percent from 21.5 percent, while gross margin narrowed to 20.5 percent from 22.2 percent.

Being the first premium auto brand in China to deliver over 500,000 cars and maintaining its sales in the market segment for autos priced above CNY200,000 (USD27,640) "reflect our ability to drive innovation, efficiency, and value creation for users," said Chairman and Chief Executive Li Xiang.

Li Auto set a first-quarter target of between 88,000 and 93,000 deliveries, up 9.5 percent to 16 percent from a year earlier.

In the fourth quarter of last year, net profit sank 39 percent to CNY3.5 billion, while revenue rose 6.1 percent to CNY44.3 billion (USD6.1 billion). Deliveries surged over 20 percent to 158,696, with sales up 5.6 percent to CNY42.6 billion.

Investment, Expansion Plans

Li Auto is ramping up investment in several key areas this year. The company plans to expand its charging network to 4,000 stations by the end of December, up from 1,874 at the end of last month, and hike research and development spending in artificial intelligence and autonomous driving technologies, executives said on Li Auto’s earnings conference call.

"Moving forward, we remain committed to expanding our business and driving technological innovation while striving for financial excellence," said Chief Financial Officer Li Tie. “By continuously enhancing our comprehensive capabilities, we aim to grow sustainably and steadily advance toward our long-term vision in this intelligent era, creating value for all our stakeholders.”

International expansion remains another major focus for Li Auto in 2025, as the firm established its first overseas R&D center in Munich, Germany, in January. The company has created a dedicated overseas market development department, signaling its commitment to global growth despite rising trade barriers in various markets.

The decline in Li Auto's profits may also be related to broader challenges brought by the complex external environment that Chinese EV manufacturers are now facing.

China-made EVs and their industrial and supply chains are making a splash in the international market, so many foreign markets have raised entry barriers to protect their own auto industries, according to Great Wall Securities. As a result, the external environment now poses a greater challenge for those EV makers that expanded overseas.

"The auto industry is capital-intensive, especially during this period of new energy transition and technological upgrading," said Pan Jun, investment manager at Cheese Fund. “Continuous iteration of battery, motor, and electronic control technologies, coupled with the early-stage development of advanced autonomous driving, require substantial human and financial resources.”

Editor: Futura Costaglione