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Light tanks do maintain some marginal use in a supporting capacity for your motorised divisions. They are fast enough to not negatively impact the speed and ultimately they do add a little hardness and a decent bit of soft attack. They also make for decent QRF's against enemy invasions. But they are pretty much a spent force for front line work from 1940 onwards.
However, there is a caveat, light tanks are dirt cheap. They are so cheap in fact that cheese strategies of spamming THOUSANDS of the things on the eastern front can work out. The strategy being that they will take losses, but the enemy loses organisation from continuous battle and retreats, but does not manage to outrun the speed of the light tanks. So literally everything gets overrun and encircled. Iv'e not done it to a human and would not dare try cause of how easy it would be to counter, But I have done it as Russia and Germany vs the AI to surprising effect.
I still strongly suggest Medium tanks for a more 'normal' game, but light tanks can be made to work.
And even after mediums are introduced and you've built enough of those with your newly-started production line to switch your tank divisions you can still attach your stockpiled LTs to mot divisions or convert them into light SPAA/SPART en masse at low cost to keep making use of them.
Use the starting tank divisions in the Spanish Civil war and in the Japan- China war and you can build up the 12 width template to make a 20 width light tank division and a 40 width tank division with mixed light and medium tanks. Mixing both tanks has big advantages in production costs, training, supply and fuel as well as scheduling when things are available.
Adding the first battalion of medium 1 tanks to a 40 width division with light tank 2 has a huge impact, adding 14.7 armour and 13.1 piercing as well as slowing down the max speed. Each extra battalion that is replaced after the first has a much smaller impact only adding 1.2 armour to 24 and 0.7 piercing to 35.9 and a few more soft attack and 8 hard attack for more weight, supply and fuel. At 24 the armour of the division is already enough to stop light tanks and flak 1 penetrating, while the piercing of 35.9 will penetrate most early medium tank divisions.
Has anybody mentioned that a L.tank BN (60 tanks), when converted into L.SPA OR L.SPAA, you get a 2 for 1 deal; as these L.SPA and L.SPAA line BNs have ONLY 30 units/ BN ??,
and support companies only have 20 L.SPAA ??; that's a 3 for 1 deal !
Possibly a good reason to keep in production as your sole SPAA Flakpanzer (upgradable to 2s and 3s) in Wheeled [Armor/Motor/Mech] XXs .
For cheap nastyness, get both support AND line BNs in L.SPAA; Bozo's air will hate you for that .
And did I mention they are cheap and build fast? This matters a lot, because while many people write them off because they aren't all that strong, they are a hell of a lot stronger than having wait 127 days to make up a short fall of medium tanks. This also matters for their artillery variant for the same reason.
AA in general is better than people give it credit for, suffice to say without AA, your tanks won't over run anyone if you lack air superiority.
Tank destroyer lights are a thing that exist, they trade a tiny bit of soft attack for hard attack but not much of each, frankly they seem pointless, unless someone has experimented with them and knows more?
The usage is to either keep them alone or naturally combine them with some motorized troops (boosting their org. to be able stay in real combat) for early mechanized army (= fast army with task to breakthrough and encircle enemy). Should be noted that such army is very ineffective almost anywhere else than (western) Europe with good infrastructure and plains.
As others noted, sure they become obsolete with medium tanks, but at same time are cheap and production line can be started quite early - it take decent time and production effort prior you can really change for your mechanized armies from mot+ligtht tanks toward medium+mech infantry (though i highly suggest this overall, once you can afford it - not only they are betetr but your manpower losses will thank you as well)
But tbh all in all as I mostly play only against AI +/- historical way/times at the end of day I somehow feel ok with skiping light tanks - small nations that could use them in early expansions often can not afford them due lack of research and production slots (unless proritize them for some specific strategies) and for larger countries I feel better focus and prepare my infantry armies prior 39 and than fully focus on medium tank+mechanized infantry right away as they are true workhorse for whole war. Usually light tanks dont fit into my strategy there so I just use those starting at beginning (they are excellent expedition forces too - eg. in Spain or China those light tank units can cut off lot of enemies and do trendemous amount of work if microed properly) and replace them asap. Possible utilize them as light AA for field mech+medium batallions faster and save some medium production for later is pretty nice Idea.
The line up fro Barbarossa was 57 tanks battalions with a total of 3417 tanks of which 965 were Pz 3, 439 were Pz 4 and the rest were an assortment of light tanks including some Pz 1 and Pz 2 and 772 Pz 38t. Most Panzer divisions were a mix of light and medium tanks.
Yea I am well aware of that. I meant by "historical" that I do not exactly cheese my games by ahistorical wars and grand strategy(by eg. very early invading UK or US in 36 or things like that) - simply say I like the development toward "normal" WW2 starting in 39..
Sure reality was more complex in general - like Germans were overall more dependant on horse power than motorized or trains, lot of their equipment and parts were dependant on stuff they could posses/capture directly on battlefield (or had from annexed countries), their tanks followed same pattern and it was pretty rare they were able field tank platoons consisted from their own new models, same as early war models were still in service till last years (sometime they just adjusted cannon or things like that if possible but sometime not even that) - simply because of terribly shortage of "everything" germans had for whole war and kept so long only due strategic genius of commanders and discipline.
But game is (thanks god!) not so much complex (though I like that eg. captured equipment is there:-) and there is not exactly advantage of mix medium and light models there (beside production cost/availability)
If you (can) send Volunteer Divisions, for instance, you can turn the tide in Spain and China early-game, and can always lend-lease any spares mid-game of you don't need to convert them.
EDIT: "Them" being Light Tanks
EDITED EDIT: Depending which Industrial route you chose, it can also be worth producing a line of them so that when you convert the line you keep some productivity % :)
That said, I've used light tanks to great effect late into the game. Since you can produce them en masse you can simply create really fat tank divisions. Meaning adding more tank battalions per division. This isn't great if you have limited population or can easily produce medium tanks. Really this strat is good for countries with a decent population and inability to produce a large number of medium tanks.
If you're playing with other players who are producing large amounts of late game medium-heavy tanks this is a poor strategy as you'll lose any tank to tank engagement. Same is true if they simply have enough piercing on their divisions.
As with any equipment or strategy in the game, it's entirely situational and the outcome is up to your best judgement.