• If you are wondering whether Li Auto's current share price still reflects its long term potential, you are not alone. Many investors are asking what the stock is really worth right now.
• The stock closed at US$17.33, with returns of 1.0% over 7 days, a 9.7% decline over 30 days, roughly flat year to date at 0.5%, and a 36.9% decline over the last year, which has shifted how some investors may be thinking about both upside potential and risk.
• Recent news flow around Li Auto has focused on broader sentiment toward Chinese electric vehicle makers and changing expectations for the sector, which has kept valuation in the spotlight. Commentary has often linked the share price moves to how investors weigh long term growth stories against current market conditions and competitive pressures.
• Right now, Li Auto scores 0 out of 6 on our valuation checks, and you can see the full breakdown in our valuation scorecard. Next, we will look at what different valuation methods say about the stock today and finish with a tool that can help you go one step further in judging fair value.

Li Auto scores just 0/6 on our valuation checks. See what other red flags we found in the full valuation breakdown.

Approach 1: Li Auto Discounted Cash Flow (DCF) Analysis

A Discounted Cash Flow, or DCF, model takes estimates of a company’s future cash flows and discounts them back to what they might be worth today, giving you an implied value per share.

For Li Auto, the model used is a 2 Stage Free Cash Flow to Equity approach, based on cash flow projections in CN¥. The latest twelve month free cash flow is a loss of CN¥14,053.38m. Analysts provide free cash flow estimates out to 2028, with Simply Wall St extrapolating further to build a 10 year path using those inputs.

Within those projections, the 2028 free cash flow estimate is CN¥12,385.25m, and the later years in the model range from around CN¥7,674.30m to CN¥19,340.73m, all treated in millions of CN¥ and discounted back under the DCF framework.

Putting this together, the DCF model arrives at an estimated intrinsic value of US$13.96 per share. Against the recent share price of US$17.33, the model suggests Li Auto is about 24.1% overvalued on this cash flow view.

Result: OVERVALUED

Our Discounted Cash Flow (DCF) analysis suggests Li Auto may be overvalued by 24.1%. Discover 48 high quality undervalued stocks or create your own screener to find better value opportunities.

Approach 2: Li Auto Price vs Earnings

For profitable companies, the P/E ratio is a useful way to relate what you pay for each share to the earnings that company is currently generating. It lets you compare how the market prices one stream of earnings against another, across both sectors and individual stocks.

What counts as a “normal” P/E depends a lot on how the market views a company’s growth potential and risk. Higher expected growth or lower perceived risk can support a higher P/E, while slower expected growth or higher risk usually goes with a lower P/E. Li Auto is currently trading on a P/E of 108.48x, compared with the Auto industry average of 18.58x and a peer group average of 38.04x.

Simply Wall St’s Fair Ratio is a proprietary estimate of what P/E might make sense for Li Auto given its earnings growth profile, industry, profit margins, market cap and company specific risks. Because it blends these factors, it can be more tailored than a simple comparison with peers or the broad industry. Li Auto’s Fair Ratio is 35.28x, which is well below the current P/E of 108.48x, suggesting the shares trade at a richer earnings multiple than this framework would indicate.

Result: OVERVALUED

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Upgrade Your Decision Making: Choose your Li Auto Narrative

Earlier we mentioned that there is an even better way to understand valuation. Let us introduce you to Narratives, which are Simply Wall St community views that connect a clear story about Li Auto to explicit forecasts for revenue, earnings, margins and a fair value. They then compare that fair value with the current price to help you judge whether the company looks attractive or expensive, all inside an easy to use tool on the Community page. This tool updates automatically when fresh news or earnings land and already captures very different viewpoints, such as bearish investors who anchor on a fair value close to the lower analyst price target of US$18.13 and more optimistic investors who lean toward the higher target of US$39.04.

For Li Auto, here are previews of two leading Li Auto narratives:

Fair value in this bullish narrative: US$24.43 per share

Implied undervaluation versus the last close of US$17.33: about 29.0%

Revenue growth assumption: 18.23% a year

• Views Li Auto as potentially benefiting from a shift toward battery electric vehicles, smart driving technology and software-driven services that could support revenue and margin growth over time.
• Sees the fast build-out of ultra-fast charging, expansion into lower-tier Chinese cities and early global efforts as key supports for higher sales and reduced reliance on the domestic market alone.
• Flags meaningful risks around heavy investment needs, competition in China, regulatory changes and the challenge of shifting from EREV to BEV, which could affect how quickly the bullish case plays out.

Fair value in this bearish narrative: US$14.05 per share

Implied overvaluation versus the last close of US$17.33: about 23.3%

Revenue growth assumption: 12.39% a year

• Focuses on headwinds from trade tensions, regulatory hurdles and heavy reliance on China, which could weigh on overseas expansion, growth and margin stability.
• Highlights intense competition and pressure to move fully to BEVs as sources of potential price pressure, higher costs and the risk that Li Auto’s technology loses ground.
• Notes that significant investment in AI, batteries, charging infrastructure and international build-out could still support growth, but sees execution and demand risks as central to the story at today’s price.

Do you think there's more to the story for Li Auto? Head over to our Community to see what others are saying!

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.