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Li Auto Inc. Announces Unaudited Second Quarter 2023 Financial Results

August 8, 2023 4:30 AM

Quarterly total revenues reached RMB28.65 billion (US$3.95 billion)1Quarterly deliveries reached 86,533 vehicles

BEIJING, China, Aug. 08, 2023 (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, 2023.

Operating Highlights for the Second Quarter of 2023

Deliveries 2023 Q2 2023 Q1 2022 Q4 2022 Q3
86,533 52,584 46,319 26,524
Deliveries 2022 Q2 2022 Q1 2021 Q4 2021 Q3
28,687 31,716 35,221 25,116

Financial Highlights for the Second Quarter of 2023

Key Financial Results(in millions, except for percentages)
For the Three Months Ended % Change5
June 30, 2022 March 31, 2023 June 30, 2023 YoY QoQ
RMB RMB RMB
Vehicle sales8,483.6 18,327.3 27,971.9 229.7% 52.6%
Vehicle margin21.2% 19.8% 21.0% (0.2)% 1.2%
Total revenues8,732.6 18,787.1 28,652.7 228.1% 52.5%
Gross profit1,878.3 3,830.1 6,235.3 232.0% 62.8%
Gross margin21.5% 20.4% 21.8% 0.3% 1.4%
(Loss)/income from operations(978.5) 405.2 1,625.9 N/A 301.3%
Non-GAAP (loss)/income from operations(520.8) 885.4 2,043.3 N/A 130.8%
Net (loss)/income(641.0) 933.8 2,310.1 N/A 147.4%
Non-GAAP net (loss)/income(183.4) 1,414.1 2,727.5 N/A 92.9%
Operating cash flow1,129.4 7,780.4 11,112.4 N/A 42.8%
Free cash flow (non-GAAP)451.7 6,702.1 9,621.4 N/A 43.6%

Recent Developments

Delivery Update

Family Tech Day

Li L9 Pro

At-The-Market Offering

CEO and CFO Comments

Mr. Xiang Li, chairman and chief executive officer of Li Auto, commented, “We crossed the 30,000 monthly delivery milestone in June, closing the second quarter with an all-time high vehicle delivery, while all of the three Li L series models maintained sales leadership in their respective categories. These accomplishments solidified our standing as the preferred premium brand for families, firmly positioning us to achieve the revenue target of RMB100 billion in 2023. Facing the competitive market dynamics in China’s NEV industry, in the second quarter we achieved our highest-ever profitability while continuing to strengthen our competitive advantage through ongoing investments in research and development and business expansion, as well as improvements in our organizational processes and operational capabilities.”

“In June, we launched China’s first city NOA and commute NOA independent of high-definition maps for test drives, showcasing their outstanding abilities to perceive, plan, and control in complex urban traffic environments. Furthermore, our super flagship 5C BEV model, Li MEGA, is scheduled to be unveiled in the fourth quarter of this year. Embodying our latest technological advancements in electrification and intelligentization, we are confident that Li MEGA will become a new sales blockbuster in the RMB500,000 and higher price segment. As a growth-driven organization, we will relentlessly explore and train ourselves to achieve further developments while building products and services that exceed user needs.”

Mr. Tie Li, chief financial officer of Li Auto, added, “We had a strong showing in the second quarter, setting new records across revenue, net income, and free cash flow. Specifically, we grew our revenue by 228.1% year-over-year to RMB28.65 billion, fueled by the significant increase in vehicle deliveries. We achieved net income of RMB2.31 billion while recording free cash flow of RMB9.62 billion. The robust financial performance empowers the Company to deepen its commitment to research and development and accelerate business expansion as we strive to deliver greater value to our users, shareholders and society as a whole.”

Financial Results for the Second Quarter of 2023

Revenues

Cost of Sales and Gross Margin

Operating Expenses

Income/(Loss) from Operations

Net Income/(Loss) and Net Earnings/(Loss) Per Share

Cash Position, Operating Cash Flow and Free Cash Flow

Business Outlook

For the third quarter of 2023, the Company expects:

This business outlook reflects the Company’s current and preliminary view on the business situation and market condition, which is subject to change.

Conference Call

Management will hold a conference call at 8:00 a.m. U.S. Eastern Time on Tuesday, August 08, 2023 (8:00 p.m. Beijing/Hong Kong Time on August 08, 2023) 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/10032372-jb217p.html

A replay of the conference call will be accessible through August 15, 2023, 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:10032372

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

Non-GAAP Financial Measure

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/loss from operations, non-GAAP net income/loss, non-GAAP net income/loss attributable to ordinary shareholders, non-GAAP basic and diluted net earnings/loss per ADS attributable to ordinary shareholders, non-GAAP basic and diluted net earnings/loss 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, 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 net loss or other consolidated statements of comprehensive loss data 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 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 RMB7.2513 to US$1.00, the exchange rate on June 30, 2023, 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 to successfully commercialize extended-range electric vehicles in China. The Company started volume production in November 2019. Its current model lineup includes Li L9, a six-seat flagship family SUV, Li L8, a six-seat premium family SUV, and Li L7, a five-seat flagship family SUV. The Company leverages technology to create value for its users. It concentrates its in-house development efforts on its proprietary range extension system, next-generation electric vehicle technology, and smart vehicle solutions while expanding its product line by developing new BEVs and EREVs to target a broader user base.

For more information, please visit: http://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; 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 RelationsEmail: [email protected]

The Piacente Group, Inc.Yang SongTel: +86-10-6508-0677Email: [email protected]

Brandi PiacenteTel: +1-212-481-2050Email: [email protected]

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, 2022 March 31, 2023 June 30, 2023 June 30, 2023
RMB RMB RMB US$
Revenues:
Vehicle sales 8,483,612 18,327,316 27,971,944 3,857,507
Other sales and services 249,009 459,737 680,783 93,884
Total revenues 8,732,621 18,787,053 28,652,727 3,951,391
Cost of sales:
Vehicle sales (6,687,273) (14,705,143) (22,084,087) (3,045,535)
Other sales and services (167,048) (251,804) (333,362) (45,973)
Total cost of sales (6,854,321) (14,956,947) (22,417,449) (3,091,508)
Gross profit 1,878,300 3,830,106 6,235,278 859,883
Operating expense: 　 　
Research and development (1,531,644) (1,852,297) (2,425,600) (334,506)
Selling, general and administrative (1,325,113) (1,645,307) (2,309,210) (318,455)
Other operating income, net — 72,701 125,402 17,294
Total operating expenses (2,856,757) (3,424,903) (4,609,408) (635,667)
(Loss)/Income from operations (978,457) 405,203 1,625,870 224,216
Other (expense)/income: 　 　
Interest expense (21,172) (32,438) (28,440) (3,922)
Interest income and investment income, net 249,662 418,531 430,262 59,336
Others, net 104,695 181,488 324,291 44,722
(Loss)/Income before income tax (645,272) 972,784 2,351,983 324,352
Income tax benefit/(expense) 4,226 (38,947) (41,885) (5,776)
Net (loss)/income (641,046) 933,837 2,310,098 318,576
Less: Net (loss) /income attributable to noncontrolling interests (23,080) 4,169 16,945 2,337
Net (loss)/income attributable to ordinary shareholders of Li Auto Inc. (617,966) 929,668 2,293,153 316,239
Net (loss)/income (641,046) 933,837 2,310,098 318,576
Other comprehensive income/(loss) 　 　
Foreign currency translation adjustment, net of tax 1,058,208 27,607 (120,809) (16,660)
Total other comprehensive income/(loss) 1,058,208 27,607 (120,809) (16,660)
Total comprehensive income 417,162 961,444 2,189,289 301,916
Less: Net (loss) /income attributable to noncontrolling interests (23,080) 4,169 16,945 2,337
Comprehensive income attributable to ordinary shareholders of Li Auto Inc. 440,242 957,275 2,172,344 　 299,579
Weighted average number of ADSs
Basic 965,395,732 979,166,653 980,693,361 980,693,361
Diluted 965,395,732 1,052,402,047 1,053,852,487 1,053,852,487
Net (loss)/earnings per ADS attributable to ordinary shareholders
Basic (0.64) 0.95 2.34 0.32
Diluted (0.64) 0.89 2.18 0.30
Weighted average number of ordinary shares
Basic 1,930,791,463 1,958,333,306 1,961,386,723 1,961,386,723
Diluted 1,930,791,463 2,104,804,095 2,107,704,975 2,107,704,975
Net (loss)/earnings per share attributable to ordinary shareholders
Basic (0.32) 0.47 1.17 0.16
Diluted (0.32) 0.45 1.09 0.15

Li Auto Inc.Unaudited Condensed Consolidated Balance Sheets
(All amounts in thousands)
As of
December 31, 2022 June 30, 2023 June 30, 2023
RMB RMB US$
ASSETS
Current assets:
Cash and cash equivalents 38,478,016 60,741,006 8,376,568
Restricted cash 1,940,142 1,514,643 208,879
Time deposits and short-term investments 18,031,395 11,513,001 1,587,715
Trade receivable 48,381 84,394 11,638
Inventories 6,804,693 5,659,293 780,452
Prepayments and other current assets 1,689,860 3,084,491 425,371
Total current assets 66,992,487 82,596,828 11,390,623
Non-current assets:
Long-term investments 1,484,491 777,446 107,215
Property, plant and equipment, net 11,187,898 13,013,624 1,794,661
Operating lease right-of-use assets, net 3,538,911 3,817,676 526,482
Intangible assets, net 832,620 840,008 115,842
Goodwill 5,484 5,484 756
Deferred tax assets 74,767 — —
Other non-current assets 2,421,293 2,072,851 285,859
Total non-current assets 19,545,464 20,527,089 2,830,815
Total assets 86,537,951 103,123,917 14,221,438
LIABILITIES AND EQUITY
Current liabilities:
Short‑term borrowings 390,750 6,344,154 874,899
Trade and notes payable 20,024,329 31,269,120 4,312,209
Amounts due to related parties 7,190 6,741 930
Deferred revenue, current 569,234 1,125,700 155,241
Operating lease liabilities, current 696,454 813,495 112,186
Accruals and other current liabilities 5,684,644 7,186,468 991,057
Total current liabilities 27,372,601 46,745,678 6,446,522
Non-current liabilities:
Long-term borrowings 9,230,807 1,449,547 199,902
Deferred revenue, non-current 581,598 587,643 81,040
Operating lease liabilities, non-current 1,946,367 2,127,695 293,423
Deferred tax liabilities 77,809 45,512 6,276
Other non-current liabilities 2,142,462 2,924,365 403,288
Total non-current liabilities 13,979,043 7,134,762 983,929
Total liabilities 41,351,644 53,880,440 7,430,451
Total Li Auto Inc. shareholders’ equity 44,858,701 48,894,757 6,742,896
Noncontrolling interests 327,606 348,720 48,091
Total shareholders’ equity 45,186,307 49,243,477 6,790,987
Total liabilities and shareholders’ equity 86,537,951 103,123,917 14,221,438

Li Auto Inc.Unaudited Condensed Consolidated Statements of Cash Flows
(All amounts in thousands)
For the Three Months Ended
June 30,2022 March 31,2023 June 30,2023 June 30,2023
RMB RMB RMB US$
Net cash provided by operating activities 1,129,407 7,780,366 11,112,395 1,532,469
Net cash (used in)/provided by investing activities (740,518) (2,692,753) 7,573,941 1,044,494
Net cash provided by/(used in) financing activities 1,026,855 (195,821) (1,853,582) (255,621)
Effect of exchange rate changes 962,704 (25,241) 138,186 19,058
Net change in cash, cash equivalents and restricted cash 2,378,448 4,866,551 16,970,940 　 2,340,400
Cash, cash equivalents and restricted cash at beginning of period 34,716,572 40,418,158 45,284,709　6,245,047
Cash, cash equivalents and restricted cash at end of period 37,095,020 45,284,709 62,255,649 　 8,585,447
Net cash provided by operating activities 1,129,407 7,780,366 11,112,395 1,532,469
Capital expenditures (677,755) (1,078,295) (1,491,029) (205,622)
Free cash flow (non-GAAP) 451,652 6,702,071 9,621,366　 1,326,847

Li Auto Inc.Unaudited Reconciliation of 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 30,2022 March 31,2023 June 30,2023 June 30,2023
RMB RMB RMB US$
Cost of sales (6,854,321) (14,956,947) (22,417,449)　(3,091,508)
Share-based compensation expenses 9,301 11,186 9,449　1,303
Non-GAAP cost of sales (6,845,020) (14,945,761) (22,408,000)　 (3,090,205)
Research and development expenses (1,531,644) (1,852,297) (2,425,600)　(334,506)
Share-based compensation expenses 301,449 336,220 247,064　34,072
Non-GAAP research and development expenses (1,230,195) (1,516,077) (2,178,536)　 (300,434)
Selling, general and administrative expenses (1,325,113) (1,645,307) (2,309,210) (318,455)
Share-based compensation expenses 146,858 132,823 160,928 22,193
Non-GAAP selling, general and administrative expenses (1,178,255) (1,512,484) (2,148,282) (296,262)
(Loss)/Income from operations (978,457) 405,203 1,625,870　224,216
Share-based compensation expenses 457,608 480,229 417,441　57,568
Non-GAAP (loss)/income from operations (520,849) 885,432 2,043,311 　 281,784
Net (loss)/income (641,046) 933,837 2,310,098 318,576
Share-based compensation expenses 457,608 480,229 417,441 57,568
Non-GAAP net (loss)/income (183,438) 1,414,066 2,727,539 376,144
Net (loss)/income attributable to ordinary shareholders of Li Auto Inc. (617,966) 929,668 2,293,153 316,239
Share-based compensation expenses 457,608 480,229 417,441 57,568
Non-GAAP net (loss)/income attributable to ordinary shareholders of Li Auto Inc. (160,358) 1,409,897 2,710,594 373,807
Weighted average number of ADSs (non-GAAP)
Basic 965,395,732 979,166,653 980,693,361 980,693,361
Diluted 965,395,732 1,052,402,047 1,053,852,487 1,053,852,487
Non-GAAP net (loss)/earnings per ADS attributable to ordinary shareholders
Basic (0.17) 1.44 2.76　0.38
Diluted (0.17) 1.35 2.58　0.36
Weighted average number of ordinary shares (non-GAAP)
Basic 1,930,791,463 1,958,333,306 1,961,386,723 1,961,386,723
Diluted 1,930,791,463 2,104,804,095 2,107,704,975 2,107,704,975
Non-GAAP net (loss)/earnings per share attributable to ordinary shareholders7
Basic (0.08) 0.72 1.38　0.19
Diluted (0.08) 0.67 1.29　0.18

1 All translations from Renminbi (“RMB”) to U.S. dollar (“US$”) are made at a rate of RMB7.2513 to US$1.00, the exchange rate on June 30, 2023 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. See “Unaudited Reconciliation of GAAP and Non-GAAP Results” set forth at the end of this press release.

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

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

6 Each ADS represents two Class A ordinary shares.

7 Non-GAAP basic net earnings/loss per share attributable to ordinary shareholders is calculated by dividing non-GAAP net income/loss attributable to ordinary shareholders by the weighted average number of ordinary shares outstanding during the periods. Non-GAAP diluted net earnings/loss per share attributable to ordinary shareholders is calculated by dividing non-GAAP net income/loss attributable to ordinary shareholders by the weighted average number of ordinary shares, 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.

Source: Li Auto Inc.

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