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Li Auto Inc. Announces Unaudited Second Quarter 2024 Financial Results

Bay Street

Quarterly total revenues reached RMB31.7 billion (US$4.4 billion)1
Quarterly deliveries reached 108,581 vehicles

BEIJING, China, Aug. 28, 2024 (GLOBE NEWSWIRE) — Li Auto Inc. (“Li Auto” or the “Company”) (Nasdaq: LI; HKEX: 2015), a leader in China’s new energy vehicle market, today announced its unaudited financial results for the quarter ended June 30, 2024.

Operating Highlights for the Second Quarter of 2024

    2024 Q2   2024 Q1   2023 Q4   2023 Q3    
Deliveries   108,581   80,400   131,805   105,108    
                     
    2023 Q2   2023 Q1   2022 Q4   2022 Q3    
Deliveries   86,533   52,584   46,319   26,524    
                     

Financial Highlights for the Second Quarter of 2024

Key Financial Results

(in millions, except for percentages and per ADS data)

  
   
  For the Three Months Ended   % Change6  
  June 30,
2023		   March 31,
2024		   June 30,
2024		   YoY   QoQ  
  RMB   RMB   RMB          
Vehicle sales 27,971.9   24,251.6   30,319.7   8.4%   25.0%  
Vehicle margin 21.0%   19.3%   18.7%   (2.3)pts   (0.6)pts  
                     
Total revenues 28,652.7   25,633.7   31,678.4   10.6%   23.6%  
Gross profit 6,235.3   5,284.3   6,176.9   (0.9)%   16.9%  
Gross margin 21.8%   20.6%   19.5%   (2.3)pts   (1.1)pts  
                     
Operating expenses (4,609.4)   (5,869.2)   (5,708.9)   23.9%   (2.7)%  
Income/(Loss) from operations 1,625.9   (584.9)   468.0   (71.2)%   N/A  
Operating margin 5.7%   (2.3)%   1.5%   (4.2)pts   3.8pts  
                     
Net income 2,310.1   591.1   1,100.9   (52.3)%   86.2%  
Non-GAAP net income 2,727.5   1,276.4   1,503.1   (44.9)%   17.8%  
                     
Diluted net earnings per ADS attributable to ordinary shareholders 2.18   0.56   1.05   (51.8)%   87.5%  
Non-GAAP diluted net earnings per ADS attributable to ordinary shareholders 2.58   1.21   1.42   (45.0)%   17.4%  
                     
Net cash provided by/(used in) operating activities 11,112.4   (3,342.4)   (429.4)   N/A   (87.2)%  
Free cash flow (non-GAAP) 9,621.4   (5,055.2)   (1,852.7)   N/A   (63.4)%  
                     

Recent Developments

Delivery Update

OTA 6.0 and 6.1 Updates

Product Health Evaluation Results

CEO and CFO Comments

Mr. Xiang Li, chairman and chief executive officer of Li Auto, commented, “Since the second quarter, Li Auto has emerged as the sales champion of Chinese automotive brands in the RMB200,000 and above NEV market amid intense competition, driven by segment leadership across all Li Auto models and enhanced store efficiency. Our second-quarter deliveries exceeded 108,000 vehicles, increasing by 25.5% year over year, a strong testament to our product strength and the effectiveness of our recalibrated operating strategy. In June 2024, we surpassed the 800,000-vehicle milestone in cumulative deliveries, making history for Chinese premium automotive brands. In addition to our strong sales results, we made substantial progress in autonomous driving. In July, we rolled out our high-definition map-independent NOA with nationwide coverage to over 240,000 Li AD Max users and launched our next-generation autonomous driving technological architecture that integrates an E2E model and a VLM. We will relentlessly pursue innovation and excellence to solidify our position as a preferred premium automotive brand for Chinese families, providing our users with products and services that exceed their expectations, and creating happiness for families.”

Mr. Tie Li, chief financial officer of Li Auto, added, “Amid intense market competition during the second quarter, we focused on creating user value and improving operating efficiency. Our solid second-quarter deliveries drove revenues to increase 10.6% year over year to RMB31.7 billion. Despite the impact from ramping up a new model, our gross margin remained healthy at 19.5%. As Li L6 production stabilizes and our cost reduction and efficiency enhancement measures take full effect, we expect an increase in both our margins and cash flow in the second half of the year. Looking ahead, we are committed to investing in technological and product advancements to drive steady business growth, while simultaneously optimizing our cost structure.”

Financial Results for the Second Quarter of 2024

Revenues

Cost of Sales and Gross Margin

Operating Expenses

Income/(Loss) from Operations

Net Income and Net Earnings Per Share

Cash Position, Operating Cash Flow and Free Cash Flow

Business Outlook

For the third quarter of 2024, the Company expects:

This business outlook reflects the Company’s current and preliminary views on its business situation and market conditions, which are subject to change.

Conference Call

Management will hold a conference call at 8:00 a.m. U.S. Eastern Time on Wednesday, August 28, 2024 (8:00 p.m. Beijing/Hong Kong Time on August 28, 2024) to discuss financial results and answer questions from investors and analysts.

For participants who wish to join the call, please complete online registration using the link provided below prior to the scheduled call start time. Upon registration, participants will receive the conference call access information, including dial-in numbers, passcode, and a unique access PIN. To join the conference, please dial the number provided, enter the passcode followed by your PIN, and you will join the conference instantly.

Participant Online Registration: https://s1.c-conf.com/diamondpass/10041167-jgh57t.html

A replay of the conference call will be accessible through September 4, 2024, by dialing the following numbers:

United States: +1-855-883-1031
Mainland China: +86-400-1209-216
Hong Kong, China: +852-800-930-639
International: +61-7-3107-6325
Replay PIN: 10041167
   

Additionally, a live and archived webcast of the conference call will be available on the Company’s investor relations website at https://ir.lixiang.com.

Non-GAAP Financial Measures

The Company uses non-GAAP financial measures, such as non-GAAP cost of sales, non-GAAP research and development expenses, non-GAAP selling, general and administrative expenses, non-GAAP income from operations, non-GAAP net income, non-GAAP net income attributable to ordinary shareholders, non-GAAP basic and diluted net earnings per ADS attributable to ordinary shareholders, non-GAAP basic and diluted net earnings per share attributable to ordinary shareholders and free cash flow, in evaluating its operating results and for financial and operational decision-making purposes. By excluding the impact of share-based compensation expenses and release of valuation allowance on deferred tax assets, the Company believes that the non-GAAP financial measures help identify underlying trends in its business and enhance the overall understanding of the Company’s past performance and future prospects. The Company also believes that the non-GAAP financial measures allow for greater visibility with respect to key metrics used by the Company’s management in its financial and operational decision-making.

The non-GAAP financial measures are not presented in accordance with U.S. GAAP and may be different from non-GAAP methods of accounting and reporting used by other companies. The non-GAAP financial measures have limitations as analytical tools and when assessing the Company’s operating performance, investors should not consider them in isolation, or as a substitute for financial information prepared in accordance with U.S. GAAP. The Company encourages investors and others to review its financial information in its entirety and not rely on a single financial measure.

The Company mitigates these limitations by reconciling the non-GAAP financial measures to the most comparable U.S. GAAP performance measures, all of which should be considered when evaluating the Company’s performance.

For more information on the non-GAAP financial measures, please see the table captioned “Unaudited Reconciliation of U.S. GAAP and Non-GAAP Results” set forth at the end of this press release.

Exchange Rate Information

This press release contains translations of certain Renminbi amounts into U.S. dollars at a specified rate solely for the convenience of the reader. Unless otherwise noted, all translations from Renminbi to U.S. dollars and from U.S. dollars to Renminbi are made at a rate of RMB7.2672 to US$1.00, the exchange rate on June 28, 2024, set forth in the H.10 statistical release of the Federal Reserve Board. The Company makes no representation that the Renminbi or U.S. dollars amounts referred could be converted into U.S. dollars or Renminbi, as the case may be, at any particular rate or at all.

About Li Auto Inc.

Li Auto Inc. is a leader in China’s new energy vehicle market. The Company designs, develops, manufactures, and sells premium smart electric vehicles. Its mission is: Create a Mobile Home, Create Happiness (创造移动的家, 创造幸福的家). Through innovations in product, technology, and business model, the Company provides families with safe, convenient, and comfortable products and services. Li Auto is a pioneer in successfully commercializing extended-range electric vehicles in China. While firmly advancing along this technological route, it builds platforms for battery electric vehicles in parallel. The Company leverages technology to create value for users. It concentrates its in-house development efforts on proprietary range extension systems, innovative electric vehicle technologies, and smart vehicle solutions. The Company started volume production in November 2019. Its current model lineup includes Li MEGA, a high-tech flagship family MPV, Li L9, a six-seat flagship family SUV, Li L8, a six-seat premium family SUV, Li L7, a five-seat flagship family SUV, and Li L6, a five-seat premium family SUV. The Company will continue to expand its product lineup to target a broader user base.

For more information, please visit: https://ir.lixiang.com.

Safe Harbor Statement

This press release contains statements that may constitute “forward-looking” statements pursuant to the “safe harbor” provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as “will,” “expects,” “anticipates,” “aims,” “future,” “intends,” “plans,” “believes,” “estimates,” “targets,” “likely to,” “challenges,” and similar statements. Li Auto may also make written or oral forward-looking statements in its periodic reports to the U.S. Securities and Exchange Commission (the “SEC”) and The Stock Exchange of Hong Kong Limited (the “HKEX”), in its annual report to shareholders, in press releases and other written materials, and in oral statements made by its officers, directors, or employees to third parties. Statements that are not historical facts, including statements about Li Auto’s beliefs, plans, and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties. A number of factors could cause actual results to differ materially from those contained in any forward-looking statement, including but not limited to the following: Li Auto’s strategies, future business development, and financial condition and results of operations; Li Auto’s limited operating history; risks associated with extended-range electric vehicles and high-power charging battery electric vehicles; Li Auto’s ability to develop, manufacture, and deliver vehicles of high quality and appeal to customers; Li Auto’s ability to generate positive cash flow and profits; product defects or any other failure of vehicles to perform as expected; Li Auto’s ability to compete successfully; Li Auto’s ability to build its brand and withstand negative publicity; cancellation of orders for Li Auto’s vehicles; Li Auto’s ability to develop new vehicles; and changes in consumer demand and government incentives, subsidies, or other favorable government policies. Further information regarding these and other risks is included in Li Auto’s filings with the SEC and the HKEX. All information provided in this press release is as of the date of this press release, and Li Auto does not undertake any obligation to update any forward-looking statement, except as required under applicable law.

For investor and media inquiries, please contact:

Li Auto Inc.
Investor Relations
Email: ir@lixiang.com

Christensen Advisory
Roger Hu
Tel: +86-10-5900-1548
Email: Li@christensencomms.com

Li Auto Inc.
Unaudited Condensed Consolidated Statements of Comprehensive Income

(All amounts in thousands, except for ADS/ordinary share and per ADS/ordinary share data)

  
   
    For the Three Months Ended
    
    June 30, 2023   March 31, 2024   June 30, 2024   June 30, 2024    
    RMB   RMB   RMB   US$    
Revenues:                    
Vehicle sales   27,971,944   24,251,553   30,319,728   4,172,133    
Other sales and services   680,783   1,382,107   1,358,668   186,959    
Total revenues   28,652,727   25,633,660   31,678,396   4,359,092    
Cost of sales:                    
Vehicle sales   (22,084,087)   (19,561,658)   (24,635,504)   (3,389,958)    
Other sales and services   (333,362)   (787,697)   (865,950)   (119,159)    
Total cost of sales   (22,417,449)   (20,349,355)   (25,501,454)   (3,509,117)    
Gross profit   6,235,278   5,284,305   6,176,942   849,975    
Operating expense:                    
Research and development   (2,425,600)   (3,048,886)   (3,027,581)   (416,609)    
Selling, general and administrative   (2,309,210)   (2,977,585)   (2,815,105)   (387,371)    
Other operating income, net   125,402   157,264   133,773   18,408    
Total operating expenses   (4,609,408)   (5,869,207)   (5,708,913)   (785,572)    
Income/(Loss) from operations   1,625,870   (584,902)   468,029   64,403    
Other (expense)/income:                    
Interest expense   (28,440)   (28,598)   (43,231)   (5,949)    
Interest income and investment income, net   430,262   1,068,888   370,034   50,918    
Others, net   324,291   220,184   383,237   52,735    
Income before income tax   2,351,983   675,572   1,178,069   162,107    
Income tax expense   (41,885)   (84,446)   (77,129)   (10,613)    
Net income   2,310,098   591,126   1,100,940   151,494    
Less: Net income/(loss) attributable to noncontrolling interests   16,945   (1,432)   (1,653)   (227)    
Net income attributable to ordinary shareholders of Li Auto Inc.   2,293,153   592,558   1,102,593   151,721    
                     
Net income   2,310,098   591,126   1,100,940   151,494    
Other comprehensive (loss)/income                    
Foreign currency translation adjustment, net of tax   (120,809)   (59,936)   12,444   1,712    
Total other comprehensive (loss)/income   (120,809)   (59,936)   12,444   1,712    
Total comprehensive income   2,189,289   531,190   1,113,384   153,206    
Less: Net income/(loss) attributable to noncontrolling interests   16,945   (1,432)   (1,653)   (227)    
Comprehensive income attributable to ordinary shareholders of Li Auto Inc.   2,172,344   532,622   1,115,037   153,433    
Weighted average number of ADSs                    
Basic   980,693,361   993,308,654   994,833,579   994,833,579    
Diluted   1,053,852,487   1,066,436,872   1,062,428,185   1,062,428,185    
Net earnings per ADS attributable to ordinary shareholders                    
Basic   2.34   0.60   1.11   0.15    
Diluted   2.18   0.56   1.05   0.14    
Weighted average number of ordinary shares                    
Basic   1,961,386,723   1,986,617,307   1,989,667,158   1,989,667,158    
Diluted   2,107,704,975   2,132,873,744   2,124,856,370   2,124,856,370    
Net earnings per share attributable to ordinary shareholders                    
Basic   1.17   0.30   0.55   0.08    
Diluted   1.09   0.28   0.52   0.07    
                     

 

Li Auto Inc.
Unaudited Condensed Consolidated Balance Sheets

(All amounts in thousands)
 
        As of      
    December 31, 2023   June 30, 2024   June 30, 2024  
    RMB   RMB   US$  
ASSETS              
Current assets:              
Cash and cash equivalents   91,329,030   80,783,571   11,116,189  
Restricted cash   479   5,225   719  
Time deposits and short-term investments   11,933,255   16,463,169   2,265,407  
Trade receivable   143,523   157,954   21,735  
Inventories   6,871,979   8,307,534   1,143,155  
Prepayments and other current assets   4,247,318   4,090,179   562,827  
Total current assets   114,525,584   109,807,632   15,110,032  
Non-current assets:              
Long-term investments   1,595,376   1,492,010   205,307  
Property, plant and equipment, net   15,745,018   21,238,080   2,922,457  
Operating lease right-of-use assets, net   5,939,230   7,053,875   970,646  
Intangible assets, net   864,180   892,188   122,769  
Goodwill   5,484   5,484   755  
Deferred tax assets   1,990,245   2,317,350   318,878  
Other non-current assets   2,802,354   2,303,580   316,983  
Total non-current assets   28,941,887   35,302,567   4,857,795  
Total assets   143,467,471   145,110,199   19,967,827  
LIABILITIES AND EQUITY              
Current liabilities:              
Short-term borrowings   6,975,399   922,219   126,902  
Trade and notes payable   51,870,097   46,832,038   6,444,303  
Amounts due to related parties   10,607   10,284   1,415  
Deferred revenue, current   1,525,543   1,732,534   238,405  
Operating lease liabilities, current   1,146,437   1,258,938   173,236  
Finance lease liabilities, current   —   44,766   6,160  
Accruals and other current liabilities   11,214,626   11,658,692   1,604,287  
Total current liabilities   72,742,709   62,459,471   8,594,708  
Non-current liabilities:              
Long-term borrowings   1,747,070   7,982,516   1,098,431  
Deferred revenue, non-current   812,218   790,023   108,711  
Operating lease liabilities, non-current   3,677,961   4,576,145   629,699  
Finance lease liabilities, non-current   —   679,419   93,491  
Deferred tax liabilities   200,877   508,547   69,978  
Other non-current liabilities   3,711,414   4,800,203   660,530  
Total non-current liabilities   10,149,540   19,336,853   2,660,840  
Total liabilities   82,892,249   81,796,324   11,255,548  
Total Li Auto Inc. shareholders’ equity   60,142,624   62,884,362   8,653,176  
Noncontrolling interests   432,598   429,513   59,103  
Total shareholders’ equity   60,575,222   63,313,875   8,712,279  
Total liabilities and shareholders’ equity   143,467,471   145,110,199   19,967,827  

 

   
Li Auto Inc.
Unaudited Condensed Consolidated Statements of Cash Flows

(All amounts in thousands)

  
   
    For the Three Months Ended
    
    June 30,
2023		   March 31,
2024		   June 30,
2024		   June 30,
2024		    
    RMB   RMB   RMB   US$    
Net cash provided by/(used in) operating activities   11,112,395   (3,342,386)   (429,397)   (59,087)    
Net cash provided by/(used in) investing activities   7,573,941   (3,098,206)   (3,839,308)   (528,306)    
Net cash (used in)/provided by financing activities   (1,853,582)   185,257   (104,743)   (14,413)    
Effect of exchange rate changes on cash, cash equivalents and restricted cash   138,186   55,813   32,257   4,438    
Net change in cash, cash equivalents and restricted cash   16,970,940   (6,199,522)   (4,341,191)   (597,368)    
Cash, cash equivalents and restricted cash at beginning of period   45,284,709   91,329,509   85,129,987   11,714,276    
Cash, cash equivalents and restricted cash at end of period   62,255,649   85,129,987   80,788,796   11,116,908    
                     
Net cash provided by/(used in) operating activities   11,112,395   (3,342,386)   (429,397)   (59,087)    
Capital expenditures   (1,491,029)   (1,712,843)   (1,423,332)   (195,857)    
Free cash flow (non-GAAP)   9,621,366   (5,055,229)   (1,852,729)   (254,944)    

 

   
Li Auto Inc.
Unaudited Reconciliation of U.S. GAAP and Non-GAAP Results

(All amounts in thousands, except for ADS/ordinary share and per ADS/ordinary share data)

  
   
    For the Three Months Ended  
    June 30,
2023		   March 31,
2024		   June 30,
2024		   June 30,
2024		  
    RMB   RMB   RMB   US$  
Cost of sales   (22,417,449)   (20,349,355)   (25,501,454)   (3,509,117)  
Share-based compensation expenses   9,449   13,469   7,652   1,053  
Non-GAAP cost of sales   (22,408,000)   (20,335,886)   (25,493,802)   (3,508,064)  
                   
Research and development expenses   (2,425,600)   (3,048,886)   (3,027,581)   (416,609)  
Share-based compensation expenses   247,064   433,764   224,332   30,869  
Non-GAAP research and development expenses   (2,178,536)   (2,615,122)   (2,803,249)   (385,740)  
                   
Selling, general and administrative expenses   (2,309,210)   (2,977,585)   (2,815,105)   (387,371)  
Share-based compensation expenses   160,928   237,994   170,129   23,411  
Non-GAAP selling, general and administrative expenses   (2,148,282)   (2,739,591)   (2,644,976)   (363,960)  
                   
Income/(Loss) from operations   1,625,870   (584,902)   468,029   64,403  
Share-based compensation expenses   417,441   685,227   402,113   55,333  
Non-GAAP income from operations   2,043,311   100,325   870,142   119,736  
                   
Net income   2,310,098   591,126   1,100,940   151,494  
Share-based compensation expenses   417,441   685,227   402,113   55,333  
Non-GAAP net income   2,727,539   1,276,353   1,503,053   206,827  
                   
Net income attributable to ordinary shareholders of Li Auto Inc.   2,293,153   592,558   1,102,593   151,721  
Share-based compensation expenses   417,441   685,227   402,113   55,333  
Non-GAAP net income attributable to ordinary shareholders of Li Auto Inc.   2,710,594   1,277,785   1,504,706   207,054  
                   
Weighted average number of ADSs                  
Basic   980,693,361   993,308,654   994,833,579   994,833,579  
Diluted   1,053,852,487   1,066,436,872   1,062,428,185   1,062,428,185  
Non-GAAP net earnings per ADS attributable to ordinary shareholders                  
Basic   2.76   1.29   1.51   0.21  
Diluted   2.58   1.21   1.42   0.20  
Weighted average number of ordinary shares                  
Basic   1,961,386,723   1,986,617,307   1,989,667,158   1,989,667,158  
Diluted   2,107,704,975   2,132,873,744   2,124,856,370   2,124,856,370  
Non-GAAP net earnings per share attributable to ordinary shareholders8                  
Basic   1.38   0.64   0.76   0.10  
Diluted   1.29   0.60   0.71   0.10  

______________________________________

1  All translations from Renminbi (“RMB”) to U.S. dollars (“US$”) are made at a rate of RMB7.2672 to US$1.00, the exchange rate on June 28, 2024 as set forth in the H.10 statistical release of the Federal Reserve Board.

2  Vehicle margin is the margin of vehicle sales, which is calculated based on revenues and cost of sales derived from vehicle sales only.

3  The Company’s non-GAAP financial measures exclude share-based compensation expenses and release of valuation allowance on deferred tax assets. See “Unaudited Reconciliation of U.S. GAAP and Non-GAAP Results” set forth at the end of this press release.

4  Each ADS represents two Class A ordinary shares.

5  Free cash flow represents operating cash flow less capital expenditures, which is considered a non-GAAP financial measure.

6 Except for vehicle margin, gross margin, and operating margin, where absolute changes instead of percentage changes are presented.

7 Cash position includes cash and cash equivalents, restricted cash, time deposits and short-term investments, and long-term time deposits and financial instruments included in long-term investments.

8 Non-GAAP basic net earnings per share attributable to ordinary shareholders is calculated by dividing non-GAAP net income attributable to ordinary shareholders by the weighted average number of ordinary shares outstanding during the periods. Non-GAAP diluted net earnings per share attributable to ordinary shareholders is calculated by dividing non-GAAP net income attributable to ordinary shareholders by the weighted average number of ordinary shares and dilutive potential ordinary shares outstanding during the periods, including the dilutive effects of convertible senior notes as determined under the if-converted method and the dilutive effect of share-based awards as determined under the treasury stock method. 


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