Chinese electric vehicle manufacturer Li Auto is facing significant challenges due to weaker-than-expected sales and missed earnings targets. The company announced it will lay off 18% of its workforce following disappointing sales of its new MPV MEGA model. Li Auto's first-quarter vehicle sales fell short of analyst estimates, leading to a 14% drop in its stock price in Hong Kong and a 4% drop in the pre-market session. Additionally, the company has delayed the launch of its pure electric SUV to the first half of 2025, citing an insufficient fast charging network. The company's first-quarter profit and revenue also missed expectations, contributing to a negative free cash flow of $700 million and a 39% decline in revenue quarter-on-quarter. Q2 guidance also missed expectations, further impacting investor sentiment. The broader Hang Seng Index dropped 1.27% amid these developments.