Li Auto swung to a quarterly loss as the Chinese automaker discounted older hybrid models while accelerating its push into battery electric vehicles. The Nasdaq-listed company faces mounting pressure in an intensely competitive market where price wars have become the norm rather than exception.

First-quarter revenue dropped 11% to 22.98 billion yuan, missing market expectations of 23.25 billion yuan. The net loss of 2.29 billion yuan ($337.8 million) marked a sharp reversal from the 650.3 million yuan profit recorded a year earlier. Analysts had forecast a 2.4 billion yuan loss, making the actual result slightly better than expected.

Li Auto's struggles stem from slowing demand for plug-in hybrid vehicles, its core competency. The company's transition to battery EVs puts it against established players like Tesla and BYD, both of which have significant manufacturing scale advantages. Intense competition has compressed margins across the sector.

The results highlight the challenges facing Chinese automakers as they navigate the shift from hybrid to fully electric vehicles while maintaining profitability. Li Auto's discounting strategy suggests inventory pressures that could weigh on future performance as the company burns cash to fund its EV ambitions.