Li Auto's (LI) stock has had a brutal run in recent years. Shares of the Chinese electric vehicle maker are down around 75% from their record high, valuing it at a market cap of $10.3 billion. 

But the stock price only tells part of the story. While the stock has struggled, the company keeps adding customers amid rising vehicle deliveries. Let's see if LI stock is a bargain buy or a value trap in September 2026. 

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Li Auto Increased Vehicle Deliveries in August

Li Auto delivered 37,679 vehicles in August 2026, according to a company statement. That pushed cumulative deliveries to 1,801,834 as of Aug. 31. For comparison, the month before, Li Auto delivered 30,468 vehicles in July, bringing cumulative deliveries to 1,764,155 as of July 31. 

Put simply, Li Auto sold more cars in August than it did in July. The company increased deliveries by 32% year-over-year (YoY) last month, which is impressive given a challenging macro environment. 

The carmaker ended August 2026 with 487 retail stores across 160 cities, along with 533 servicing centers and authorized repair shops in 218 cities. It also had 4,162 supercharging stations equipped with 22,939 charging stalls across China.

A Focus on Profit Margins

In Q2 2026, Li Auto reported revenue of CNY 25.7 billion, or $3.86 billion, down 15.1% YoY. However, sales grew by almost 12% sequentially in the June quarter. 

However, investors are worried about narrowing profit margins. Li Auto reported vehicle margins of 9.4% in Q2, down from 19.4% last year. Comparatively, its gross margins fell from 20.1% to 11% over the last 12 months. 

The company swung to a net loss of about 1.7 billion yuan, or roughly $255 million, in Q2, versus a net profit of 1.1 billion yuan, or about $165 million, in the same quarter last year.

Li attributed margin pressure to rising battery and memory chip costs, an industry-wide headwind. Notably, the EV maker has chosen not to pass those higher costs on to customers and is instead leaning on its battery and chip development to control expenses over time. 

In fact, management expects long-term gross margin to settle between 15% and 20%. Even with the weaker margins, the balance sheet remains solid. The company ended the quarter with about 87.5 billion yuan in cash, or roughly $13.1 billion, and has repurchased 91.7 million Class A shares for about $631.5 million so far.