LI’s financial report in the first quarter of 2013 did not consider the coming of pure electricity at a reduced price.

Financial report for the first quarter of 2023: Without considering price reduction, pure electric vehicles are coming soon.

• At present, the price reduction is not considered, and the pure electric vehicle will be released in the fourth quarter of 2013.
• The performance in the first quarter reached a new high, hitting 30,000 deliveries in June.
• Marketing management fee rate dropped to 9.8%.
• The company will develop "intelligence" and "electric energy" in the next stage-"dual-energy strategy"

LI’s performance in the first quarter hit a new high, hitting 30,000 deliveries in June.

May 10th, LI (Nasdaq:LI；; 02015.HK) released the financial report for the first quarter of 2023. The financial report shows that LI achieved revenue of 18.79 billion yuan in the first quarter, a year-on-year increase of 96.5%, a record high, slightly higher than the market estimate of 18.68 billion yuan; The net profit was 934 million yuan, and the net loss in the first quarter of 2022 was 10.9 million yuan, up 252% from 265 million yuan in the fourth quarter of 2022.

LI’s outstanding financial performance in the first quarter was supported by the substantial increase in sales. In terms of delivery volume, in the first quarter of this year, LI delivered a total of 52,600 vehicles, up 65.8% year-on-year, achieving the best single-season delivery result.

For the second quarter of this year, LI gave delivery guidelines of up to 76,000 to 81,000 vehicles, up 164.9% to 182.4% year-on-year; It is estimated that the revenue will reach 24.22 billion yuan to 25.86 billion yuan, a year-on-year increase of 177.4%-196.1%.

At the conference call, Li Xiang, CEO of LI, said that the delivery volume of LI will continue to climb in the second quarter, and we should strive to achieve the goal of delivering 30,000 vehicles in a single month in June this year. The pure electric vehicles in LI will be released in the fourth quarter of this year. After the release, they will start the test drive in the store and gradually start the delivery, which will keep the same pace of release and delivery as the L9, L8 and L7 models.

Sales in management fee rate fell to 9.8%.

At present, the annual gross profit rate target is 20%, and the sales management fee rate is reduced to 9.8%. As far as gross profit rate is concerned, the overall gross profit rate and automobile gross profit rate in LI are both down year-on-year and up month-on-month. The gross profit margin was 20.4% in the first quarter, 22.6% in the same period last year and 20.2% in the fourth quarter of 2022. The gross profit margin of automobiles was 19.8%, compared with 22.4% in the same period last year and 20% in the fourth quarter of 2022.

Li Tie, CFO of LI, said that in the first quarter of this year, the overall gross profit margin of vehicles decreased, and it is expected that all sales in Li ONE will be completed in the first half of this year. At the same time, there is still room for improvement in the profit margin of the Air version. However, considering other potential factors, we still maintain the goal of 20% gross profit margin for the whole year.

LI’s R&D expenditure is also rising. In the first quarter, it invested a total of 1.85 billion yuan in R&D, up 34.8% year-on-year, and the R&D expenditure rate remained at around 10%, which was in line with LI’s previous expectations. Li Tie said that the R&D expenditure will remain the original annual plan, at around 10 billion to 12 billion yuan. Sales management expenses depend on the profit level and will be further optimized.

Due to LI CEO Li Xiang’s speech at the Weibo a few days ago, LI’s expenses have further become the focus of economic industry analysts.

Li Xiang released Weibo and said: "The market expense rate of LI brand is 0.6%, including all public relations, activities, advertisements, auto shows, press conferences, car owners’ operations, etc. I have to approve the expenses of tens of thousands of yuan to avoid wasting money." At the same time, he also mentioned that the market expense ratio of mainstream brands is 2%-3%, which is 4-5 times that of LI.

It has always been called the ideal of "picking factories", and many economic analysts have commented that the expense rate is properly controlled. The financial report for the first quarter shows that in the first quarter of 2023, LI’s sales, general and management expenses were RMB 1.65 billion, up 36.8% year-on-year and 0.9% quarter-on-quarter, accounting for 9.8% of revenue, further decreasing compared with 2022. In 2022, LI’s sales, general and management expenses will be 5.665 billion yuan, accounting for 12.5% of the total revenue, and both of them will exceed 20%.

At present, price reduction is not considered.

At present, the price of lithium carbonate, the raw material for batteries, has dropped sharply. Some analysts asked LI if there was any plan to reduce the price. Li wanted to reply, "There is no consideration of reducing the price at present, because when we made detailed long-term planning and pricing, we have already set the price at the most competitive price in the corresponding price range according to the level and size of each vehicle, and both upward and downward fluctuations will be problematic. This is the fundamental reason why we have been very cautious in pricing and insist on long-term consideration. "

The ideal pure electric vehicle was released in the fourth quarter of 2003.

There are market rumors that LI pure electric vehicles will be postponed until next year. At the earnings conference call, Li Xiang revealed that the pure electric vehicles in LI will be released in the fourth quarter of this year. After the release, they will start the test drive in the store and gradually start the delivery, which will keep the same release and delivery rhythm as the L9, L8 and L7 models. By 2025, the product layout of "1 super flagship model +5 extended-range electric vehicles +5 high-voltage pure electric vehicles" will be formed, which will face more than 200,000 markets and fully meet the needs of home users.

The ideal pure electric vehicle will use Kirin battery from Contemporary Amperex Technology Co., Limited, and the Kirin battery has been mass-produced. According to the technical parameters provided by Contemporary Amperex Technology Co., Limited, the volume utilization rate of Kirin battery can reach 72% at the highest. The new battery pack can increase the energy density of ternary battery system to 255Wh/kg, and the energy density of lithium iron phosphate battery system to 160Wh/kg. Kirin battery will be suitable for two battery types, which means that the ideal pure electric vehicle will have two battery versions.

At the same time, ideally, it is estimated that more than 3,000 charging stations will be built by 2025.

Changzhou factory has two production lines, and Beijing factory produces pure electric vehicles, with an annual production capacity of 100,000 units in the first phase.

In terms of production capacity, Ma Donghui, President and Chief Engineer of LI, introduced.

Changzhou factory has two production lines, one is double-shift production, which can produce 20,000-25,000 vehicles per month; Another single-shift production line produces ideal L7 and ideal L8, which can produce 10,000-12,000 vehicles per month. If both production lines are produced in double shifts, the monthly output can reach 50,000 vehicles, which can completely match the current ideal delivery volume.

For pure electric vehicles, the LI factory will plan to design a production capacity of 100,000 vehicles per year. At present, the current production capacity of Changzhou factory in LI can fully meet the delivery volume of ideal L-series vehicles. For example, the surge in orders can be solved by scheduling and recruitment functions.

The company will develop "intelligence" and "electric energy" in the next stage-"dual-energy strategy"

At the auto show on April 18th, Ideality released its next stage of development, "Double Energy Strategy".

"Intelligence" and "Electric Energy" —— "Dual Energy Strategy"

"intelligence": the era of intelligent driving 3.0 represented by urban NOA,

"Electric Energy": Opening a new chapter of keeping pace with extended-range electric and high-voltage pure electric.

It is more convenient to go to the overcharge station than to the gas station.

In terms of urban NOA, Ma Donghui introduced that at the end of this year, the urban NOA function will be pushed to 100 cities across the country, and the order of pushing is related to the logic and the number of local LI models. The technical architecture of an ideal city NOA does not depend on high-precision maps, so theoretically speaking, our city NOA function can be used wherever there is a navigation map. If the number of ideal L9, ideal L8 Max and ideal L7 Max in the city where the user lives is higher, and the number of driving miles is higher, the data packet in this city will be larger, and there will be an opportunity to release the NOA function of the local city earlier.

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