Li Auto unveiled its performance report for the first half of the fiscal year 2026, revealing a total operating revenue of RMB 48.65 billion, marking a 13.4% year-on-year decline. The net loss attributable to the parent company amounted to RMB 3.994 billion, representing a shift from profit to loss compared to the previous year, with a gross margin standing at 9.5%. Li Xiang noted that the introduction of new models will progressively enhance the gross margin; however, it is crucial to remain vigilant about the repercussions of escalating costs for semiconductors, including chips. Li Auto is committed to not transferring these cost hikes to consumers. Instead, it will strive to cut costs through a variety of approaches, holding the belief that a robust gross margin should range between 15% and 20%. Ma Donghui outlined two primary strategies to manage cost fluctuations: in the short run, exercising cost control through long-term contracts and streamlined operations; and in the medium to long term, stabilizing gross profit by leveraging the large-scale deployment of self-developed technologies. The company anticipates third-quarter deliveries to fall between 95,000 and 100,000 units, with total revenue projected between RMB 26.6 billion and RMB 28 billion. With model refreshes and the introduction of new pure electric offerings, the gross margin is expected to see further enhancement.