Li Auto Q4 2024 Earnings Show Revenue & Cash Growth

Li Auto's Q4 2024 earnings call reveals strong total revenues at RMB 44.3 billion, alongside substantial cash reserves of RMB 112.8 billion. Investors may need to consider how these metrics influence future stock performance.

Date: 14-03-2025

AI Rating: 5

Revenue Growth: In Q4 2024, Li Auto reported total revenues of RMB 44.3 billion (approximately $6.1 billion), reflecting a 6.1% increase year over year and a 3.3% increase quarter over quarter. This revenue growth indicates a positive trend for the company, driven primarily by an increase in vehicle deliveries, although it was partially offset by a decline in the average selling price (ASP) due to a shift in product mix and customer incentives.

Net Income: The net income for Q4 2024 was RMB 3.5 billion (around $484 million), which signifies a significant 38.6% decrease year over year, although there was a quarter-over-quarter increase of 25.3%. This drop could raise concerns for investors about profitability, despite the quarterly rebound. Such fluctuations in net income may lead to varying market perceptions regarding the company's financial health.

Free Cash Flow (FCF): The free cash flow for Q4 2024 was reported as RMB 6.1 billion ($830.1 million), down from RMB 14.6 billion in Q4 2023. Investors will want to consider this decline in free cash flow as it may indicate potential liquidity concerns, even with the company's significant cash reserves.

Profit Margins: Li Auto's vehicle margin in Q4 was 19.7%, down from 22.7% year over year and 20.9% quarter over quarter, suggesting pressure on profitability due to increased costs or promotional activities. The gross margin also fell to 20.3%, compared to 23.5% in the same period last year. These declines in margins may influence investor sentiment negatively.

Outlook: Looking forward, Li Auto expects to deliver between 88,000 to 93,000 vehicles in Q1 2025, indicating growth; however, they anticipate total revenue for Q1 2025 to decrease between 8.7% to 3.5% year over year. This mixed outlook for revenue coupled with challenges in profitability may lead to cautious investor sentiment moving forward.

Stocks: LI