Jefferies cut Li Auto’s rating from Buy to Hold, citing a hardening SUV battle and a sluggish product cycle that could push the transition into 2026. The brokerage noted the brand’s market‑share loss in the extended‑range electric SUV segment since Q2 2025, as rivals offer larger batteries in the Chinese market today.

Competition is set to intensify in 2026, with Huawei expanding its SUV lineup through partners like AITO, Zhijie, Xiangjie and Huajing, plus new models from XPeng, Great Wall Motor and Zeekr. Li Auto plans to defend its niche with faster charging, simplified offerings and tighter cost controls, but margin pressure looms ahead.

Jefferies trimmed 2025 and 2026 earnings forecasts to RMB1.0 billion and RMB5.7 billion, citing tighter margins and higher battery costs. The firm lowered price targets to $17.5 in the U.S. and HKD68.3 in Hong Kong. Investors should watch Li Auto’s AI push, its AI glasses, and the 2026 launch of the M100 chip.