理想汽車 (LI) 2023 Q4 法說會逐字稿

Hello, ladies and gentlemen. Thank you for standing by for Li Auto's fourth quarter and full year 2023 earnings conference call. At this time, all participants are in listen-only mode. Today's call is being recorded. I will now turn the call over to your host, Kobe Wang, the Head of Capital Markets of Li Auto. Please go ahead, Kobe.

女士們、先生們，大家好。感謝您出席理想汽車 2023 年第四季及全年財報電話會議。此時，所有參與者都處於只聽模式。今天的通話正在錄音。現在我將電話轉交給主持人理想汽車資本市場部負責人王科比。請繼續吧，Kobe。

Thank you, Operator. Good evening and good morning, everyone. Welcome to Li Auto's fourth quarter and full year 2023 earnings conference call. The Company's financial and operating results were published in a press release earlier today and were posted on the Company's IR website.

謝謝你，接線生。大家晚上好，早安。歡迎參加理想汽車第四季及2023年全年財報電話會議。本公司的財務和經營業績已在今天稍早發布的新聞稿中發布，並發佈在公司的投資者關係網站上。

On today's call, we will have our Chairman and CEO, Mr. Xiang Li, and our CFO, Mr. Johnny Tie Li, begin with prepared remarks. Our President, Mr. Donghui Ma, and Senior VP, Mr. James Liangjun Zou will join for the Q&A discussion.

在今天的電話會議上，我們的董事長兼執行長李翔先生和財務長李約翰尼先生將首先發表準備好的演講。我們的總裁馬東輝先生和高級副總裁鄒良軍先生將參加問答討論。

Before we continue, please be reminded that today's discussion will contain forward-looking statements made under the Safe Harbor provisions of the US Private Securities Litigation Reform Act of 1995. Forward-looking statements involve inherent risk and uncertainties. As such, the Company's actual results may be materially different from the views expressed today. Further information regarding risks and uncertainties is included in certain Company filings with the US SEC and the Hong Kong Stock Exchange. The Company does not assume any obligation to update any forward-looking statements except as required under applicable law.

在我們繼續之前，請注意，今天的討論將包含根據 1995 年美國私人證券訴訟改革法案的安全港條款做出的前瞻性陳述。前瞻性陳述涉及固有風險和不確定性。因此，公司的實際結果可能與今天表達的觀點有重大差異。有關風險和不確定性的更多資訊包含在向美國證券交易委員會和香港證券交易所提交的某些公司文件中。除適用法律要求外，本公司不承擔更新任何前瞻性聲明的義務。

Please also note that Li Auto's earnings press release and this conference call include discussion of unaudited GAAP financial information, as well as unaudited non-GAAP financial measures. Please refer to Li Auto's disclosure documents on our IR website which contain a reconciliation of the unaudited non-GAAP measures to comparable GAAP measures.

另請注意，理想汽車的獲利新聞稿和本次電話會議包括對未經審計的 GAAP 財務資訊以及未經審計的非 GAAP 財務指標的討論。請參閱理想汽車在我們的投資者關係網站上的揭露文件，其中包含未經審計的非公認會計原則措施與可比較的公認會計原則措施的調節表。

Our CEO will start his remarks in Chinese. There will be English translation after he finishes all his remarks. With that, I will now turn the call over to our CEO. Mr. Xiang Li, please go ahead.

我們的執行長將用中文開始講話。當他完成所有發言後，將會有英文翻譯。現在，我將把電話轉給我們的執行長。向李先生，請講。

(Interpreted) Welcome to today's earnings conference call. 2023 was a year of accelerated growth for Li Auto. We delivered a total of 376,000 vehicles for the entire year, exceeding our target set at the beginning of 2023 and also making us the first emerging new energy automaker in China to exceed the 300,000 annual deliveries mark.

（翻譯）歡迎參加今天的財報電話會議。 2023年對於理想汽車來說是加速成長的一年。全年累計交付汽車37.6萬輛，超額完成2023年初制定的目標，也成為國內首家年交付量突破30萬輛大關的新興新能源汽車企業。

Our total deliveries for the fourth quarter reached 131,805 vehicles, an increase of 184.6% year over year. In December, we reached another significant milestone of 50,000 monthly deliveries, setting a new record for Chinese premium car brands.

第四季我們的總交車量達到131,805輛，較去年同期成長184.6%。 12月，我們又達成了每月交付5萬輛的重要里程碑，創下了中國豪華汽車品牌的新紀錄。

According to China Automotive Technology & Research Centre's insurance registration data, in China's NEV market of RMB200,000 and higher, Li Auto's market share increased from 10.9% in Q1 2023 to [16.0%] in Q4, making us a leading Chinese automotive brand by market share.

According to China Automotive Technology & Research Centre's insurance registration data, in China's NEV market of RMB200,000 and higher, Li Auto's market share increased from 10.9% in Q1 2023 to [16.0%] in Q4, making us a leading Chinese automotive brand by市場占有率.

The growth will continue in 2024. I would like to take this opportunity to express our sincere gratitude to all of our family users, business partners and our team, for your unwavering trust, support and tireless efforts.

2024年，這一成長也將繼續。藉此機會，我謹向所有家庭用戶、商業夥伴和我們的團隊表示衷心的感謝，感謝你們的堅定信任、支持和不懈努力。

Moving on to our financial performance. Our scale expansion, effective cost control and increasing operating efficiency have continuously improved our financial performance.

延續我們的財務業績。我們的規模擴張、有效的成本控制和不斷提高的營運效率使我們的財務表現不斷改善。

Q4 total revenues reached RMB41.73 billion and annual revenues surpassed the RMB100 billion mark at RMB123.85 billion.

第四季總營收達417.3億元，全年營收突破千億元大關，達1,238.5億元。

Additionally, we achieved full year profitability for the first time in 2023, recording a healthy net income of RMB11.81 billion. By the end of 2023, our cash position reached RMB103.67 billion.

此外，我們在2023年首次實現全年獲利，錄得健康的淨利118.1億元。截至2023年底，我們的現金部位達到1,036.7億元。

In 2024, the virtuous cycle of our business growth will solidify our long-term profitability, cash generating capability, and capital base. This trajectory will further deepen our R&D efforts across products, platforms and systems, ensuring consistent delivery of exceptional products and services to our users in the long run.

2024年，我們業務成長的良性循環將鞏固我們的長期獲利能力、現金產生能力和資本基礎。這一軌跡將進一步深化我們在產品、平台和系統方面的研發工作，確保從長遠來看，為我們的用戶持續提供卓越的產品和服務。

2024 will be an unprecedented year of new product launches for Li Auto, beginning in March with the launch of our high-tech flagship family MPV, Li MEGA. Developed on a pure BEV platform, Li MEGA integrates the latest technological advancements in 5C BEV technology, smart space and autonomous driving. We also plan to begin mass delivery of 2024 model year Li L7, L8 and L9 models, starting in March.

2024年對於理想汽車來說將是史無前例的新品發布年，從3月份開始，我們將推出高科技旗艦MPV家族Li MEGA。 Li MEGA基於純電動車平台開發，整合了5C純電動車技術、智慧空間和自動駕駛的最新技術進步。我們還計劃從 3 月開始批量交付 2024 年 Li L7、L8 和 L9 車型。

You're all welcome to tune in to our Li Auto 2024 Spring Product Launch event this Friday, March 1, where we'll be unveiling more exciting details about Li MEGA and our 2024 model year L series.

歡迎大家收看我們於 3 月 1 日星期五舉行的理想汽車 2024 年春季產品發布會，我們將在會上公佈有關理想 MEGA 和 2024 年 L 系列的更多令人興奮的細節。

Furthermore, we'll introduce several new models over the course of the year, including Li L6, to broaden our product lineup even further. By the end of 2024, we will have eight models on the market, featuring four EREVs and four BEVs, forming a highly competitive product matrix and satisfying the diverse needs of our family users.

此外，我們將在年內推出包括Li L6在內的多款新車型，以進一步豐富我們的產品陣容。到2024年底，我們將有8款車型上市，其中4款增程式電動車和4款純電動車，形成極具競爭力的產品矩陣，滿足家庭用戶的多樣化需求。

New vehicle launches are only the starting point. Since the initial delivery of our L series, we have released over 20 over-the-air updates, upgrading over 700 features. Notably, the official release of our OTA 5.0 upgrades in December last year further enhanced product competitiveness of our vehicles.

新車的推出只是一個起點。自 L 系列首次交付以來，我們已經發布了 20 多個無線更新，升級了 700 多個功能。值得注意的是，去年12月我們正式發表OTA 5.0升級，進一步增強了我們車輛的產品競爭力。

Moving to autonomous driving, with the latest release of AD Max 3.0 full scenario NOA now covers all highways and city ring roads nationwide, as well as urban roads across over 110 cities. We anticipate to offer city NOA independent of HD Map in all of China by the end of the second quarter this year, and it will be delivered to all AD Max vehicles by NOA.

轉向自動駕駛，最新發布的AD Max 3.0全場景NOA現已覆蓋全國所有高速公路和城市環路，以及110多個城市的城市道路。我們預計今年第二季末將在全中國範圍內提供獨立於高精地圖的城市NOA，並且將由NOA交付給所有AD Max車輛。

As of today, our users have accumulated around 560 million kilometers on NOA. During the 10-day Chinese New Year holiday, from February 8 to 17, over 220,000 users enjoyed the convenience of NOA, covering close to 50 million kilometers on NOA.

截至目前，我們的NOA用戶累計行駛里程約5.6億公里。 2月8日至17日10天春節假期期間，超過22萬用戶享受了NOA的便利，NOA覆蓋近5000萬公里。

In terms of smart space, OTA 5.0 integrated Mind GPT into Li Xiang Tong Xue. Mind GPT is a full scenario multimodal large model, with real-time connectivity. This development has significantly increased Li Xiang Tong Xue's understanding, generating, memorizing and reasoning capabilities. Since its release, there's a notable increase in user engagement in giving instructions and seeking text-based information and services through natural conversation. During the 10-day Chinese New Year holiday, the percentage of such natural conversations amongst all effective communications reached 7.2%, twice the level before OTA 5.0.

智慧空間方面，OTA 5.0將Mind GPT整合到理想同學中。 Mind GPT是一個全場景多模態大模型，具有即時連接性。這一發展顯著提高了李想同學的理解、生成、記憶和推理能力。自發布以來，使用者透過自然對話發出指令和尋求基於文字的資訊和服務的參與度顯著增加。春節10天假期，自然對話佔所有有效溝通的比例達到7.2%，是OTA 5.0之前水準的兩倍。

Amidst our remarkable sales growth in 2023, we accelerated the expansion of our direct sales network. In Q4 2023, we opened 106 new retail stores, or over one store per day, creating the largest automobile direct sales network in China. As of January 31, 2024, we have 474 retail stores across 142 cities nationwide.

在2023年銷售額顯著成長的同時，我們加快了直銷網路的擴張。 2023年第四季度，我們開設了106家新零售店，即每天超過1家，打造了中國最大的汽車直銷網路。截至2024年1月31日，我們在全國142個城市擁有474家零售店。

In 2024, we aim to further expand our direct sales and servicing network, targeting 800 retail stores by year-end. While expanding our presence in first- and second-tier cities, we also plan to broaden our coverage in third- and fourth-tier cities.

2024年，我們的目標是進一步擴大直銷和服務網絡，目標是到年底零售店達到800家。在擴大一二線城市佈局的同時，我們也計劃擴大三、四線城市的覆蓋範圍。

Turning over to our supercharging network. To date, we have over 340 supercharging networks in operation. Starting from the Chinese New Year holiday, throughout the entire holiday we provided family users with free access to Li Auto's supercharging services. We delivered 57,000 free charging sessions to Li Auto's users and over 120,000 sessions to all EV users, delivering over 2.81 million kilowatt hours of electricity. Facing the exceptionally high demand during the holiday season, our superchargers maintained an online rate of over 99.3%, providing uninterrupted access to high quality and efficient charging experience to all users.

轉向我們的超級充電網路。迄今為止，我們已運營超過 340 個超級充電網路。從春節假期開始，整個假期我們為家庭用戶免費提供理想汽車的超級充電服務。為理想汽車用戶提供5.7萬次免費充電，為所有電動車用戶提供超過12萬次免費充電，累計電量超過281萬千瓦時。面對節慶期間異常旺盛的需求，我們的超級充電樁上線率維持在99.3%以上，為所有用戶提供不間斷的優質、高效的充電體驗。

In 2024, we will continue to accelerate our supercharging network expansion across highways and cities nationwide, targeting 2,000 supercharging stations by year-end.

2024年，我們將繼續加快全國高速公路和城市的超級充電網路建設，目標是年底前超級充電站達到2000個。

On the production front, Li Auto's Beijing green intelligent manufacturing base went into production towards the end of 2023, ready for volume production of Li MEGA and subsequent BEV models. With volume production delivery of Li MEGA and 2024 model year Li L7, L8 and L9, we expect our total vehicle deliveries for Q1 2024 to range between 100,000 units to 103,000 units, with March delivery exceeding 50,000 units.

生產方面，理想汽車北京綠色智慧製造基地將於2023年底投產，為理想MEGA及後續純電動車型的量產做好準備。隨著Li MEGA和2024款Li L7、L8和L9的量產交付，我們預計2024年第一季的車輛總交付量將在100,000輛至103,000輛之間，其中3月份的交付​​量將超過50,000輛。

In 2024, we'll continue to learn from the best enterprises, [iterate] ourselves and surpass expectations as we create mobile home and create happiness. With that, we'll turn it over to our CFO, Johnny, for a closer look at our financial performance.

2024年，我們將繼續向優秀企業學習，迭代自我，超越期望，打造移動之家，創造幸福。這樣，我們將把它交給我們的財務長約翰尼，以更仔細地了解我們的財務表現。

Thank you, Li Xiang. Hello, everyone. I will now walk you through some of our 2023 fourth quarter financials. Due to time constraints, I will address financial highlights here and encourage you to refer to our earnings press release for further details.

謝謝你，李翔。大家好。現在，我將向您介紹我們 2023 年第四季的一些財務數據。由於時間限制，我將在此討論財務要點，並鼓勵您參閱我們的收益新聞稿以了解更多詳細資訊。

Total revenue in the fourth quarter were RMB41.73 billion or US$5.88 billion, up 136.4% year over year and 20.3% quarter over quarter. This included RMB40.38 billion or US$5.69 billion from vehicle sales. Our margin grew 33.8% (sic -- see press release "133.8%") year over year and 20.1% quarter over quarter.

第四季總營收為417.3億元人民幣（58.8億美元），年增136.4%，季增20.3%。其中汽車銷售收入為 403.8 億元人民幣（56.9 億美元）。我們的利潤率年增 33.8%（原文如此－請參閱新聞稿「133.8%」），季增 20.1%。

The year-over-year increase was mainly attributable to the increase in vehicle deliveries, partially offset by the lower average selling price due to different product mix between the two quarters. The quarter-over-quarter increase was mainly attributable to the increase in vehicle deliveries.

同比增長主要歸因於車輛交付量的增加，但部分被兩個季度產品結構不同導​​致平均售價較低所抵消。環比增長主要歸因於車輛交付量的增加。

Cost of sales in the fourth quarter was RMB31.95 billion or US$4.5 million, up 126.8% year over year and 18.2% quarter over quarter.

第四季銷售成本為319.5億元人民幣（450萬美元），年增126.8%，季增18.2%。

Gross profit in the fourth quarter was RMB9.79 billion or US$1.38 billion, up 174.4% year over year and 28% quarter over quarter.

第四季毛利為97.9億元（13.8億美元），年增174.4%，季增28%。

Vehicle margin in the fourth quarter was 22.7% compared with 20% in the same period last year and 21.2% in the prior quarter. Excluding the impact of inventory provision related to Li ONE in the fourth quarter of last year and the true-up adjustments of warranty reserve in the fourth quarter of 2023 based on updated estimate of costs of further claims, the vehicle margin remained relatively stable over the fourth quarter of 2022. The increase in vehicle margin over the third quarter of 2023 was mainly due to the aforementioned true-up adjustments of warranty reserve in the fourth quarter.

第四季汽車利潤率為22.7%，去年同期為20%，上季為21.2%。剔除去年第四季與Li ONE相關的存貨撥備的影響以及根據進一步索賠成本的最新估計對2023年第四季度保固準備金進行的真實調整，車輛利潤率在2023年第四季度保持相對穩定。 2022年第四季。車輛利潤率較2023年第三季增加主要是由於前述第四季保固準備金的調整所致。

Gross margin in the fourth quarter was 23.5% compared with 20.2% in the same period of last year and 22% in the third quarter.

第四季毛利率為23.5%，去年同期為20.2%，第三季為22%。

Operating expenses in the fourth quarter were RMB6.75 billion or US$950.8 million, up 82.4% year over year and 27.2% quarter over quarter.

第四季營運支出為人民幣 67.5 億元（9.508 億美元），年增 82.4%，季增 27.2%。

R&D expenses in the fourth quarter were RMB3.49 billion or US$491.7 billion, up 68.6% year over year and 23.9% quarter over quarter, primarily driven by increased expense to support our expanding product portfolios and technologies, as well as increased employee compensation as a result of our growing number of staff.

第四季研發費用為人民幣 34.9 億元（4,917 億美元），年增 68.6%，環比增長 23.9%，主要是由於支持我們不斷擴大的產品組合和技術的費用增加，以及員工薪酬的增加這是我們員工數量不斷增加的結果。

SG&A expenses in the fourth quarter were RMB3.27 billion or US$460.5 million, up 100.6% year over year and 28.5% quarter over quarter, primarily driven by increased employee compensation as a result of our growing number of staff, as well as increased rental expenses associated with the expansion of our sales and servicing network.

第四季的銷售及管理費用為人民幣 32.7 億元或 4.605 億美元，年增 100.6%，環比增長 28.5%，主要是由於我們員工數量的增加導致員工薪酬增加以及租金增加與擴大我們的銷售和服務網路相關的費用。

Income from operations in the fourth quarter was RMB3.04 billion or US$427.7 million, compared with RMB133.6 million loss from operations in the same period last year and up 29.8% quarter over quarter.

第四季營運收入為人民幣30.4億元（4.277億美元），去年同期營運虧損為人民幣1.336億元，季增29.8%。

Operating margin in the fourth quarter was 7.3%, compared with negative 0.8% in the same period last year and 6.7% in the third quarter.

第四季營業利益率為7.3%，去年同期為負0.8%，第三季為6.7%。

Attributable to the increase of income from operations and the recognition of noncash tax benefit for the release of valuation allowance on certain deferred cash assets, net income in the fourth quarter was RMB5.75 billion or US$810.2 million, representing an increase of 2,068.2% year over year and increasing by 104.5% quarter over quarter.

由於營業收入增加以及確認釋放某些遞延現金資產評估備抵的非現金稅收優惠，第四季度淨利潤為人民幣57.5億元（8.102億美元），同比增長2,068.2%同比增長104.5%，環比增長104.5 %。

The diluted net earnings per ADS attributable to ordinary shareholders was RMB5.32 or US$0.75 in the fourth quarter, compared with RMB0.25 in the same period last year and RMB2.67 in the prior quarter.

第四季度稀釋後歸屬於普通股股東的每份ADS淨利潤為人民幣5.32元或0.75美元，去年同期為人民幣0.25元，上一季為人民幣2.67元。

Turning to our balance sheet and cash flow, our cash position remained strong and stood at RMB103.67 billion or US$14.6 billion as of 31 December 2023. Net cash provided by operating activities in the fourth quarter was RMB17.29 billion or US$2.44 billion, up 251.1% year over year and 19.2% quarter over quarter. Free cash flow was RMB14.64 billion or US$2.06 billion in the fourth quarter, up 349.4% year over year and 10.7% quarter over quarter.

就我們的資產負債表和現金流而言，截至2023 年12 月31 日，我們的現金狀況依然強勁，為1,036.7 億元人民幣（146 億美元）。第四季經營活動提供的淨現金為172.9 億元人民幣（24.4 億美元） ，年增251.1%，季增19.2%。第四季自由現金流為146.4億元人民幣（20.6億美元），年增349.4%，季增10.7%。

As of 31 December 2023, we had a total of 31,591 employees. For more information and details of our 2023 full year financial results, please refer to our earnings press release.

截至2023年12月31日，我們共有員工31,591人。有關我們 2023 年全年財務業績的更多資訊和詳情，請參閱我們的收益新聞稿。

Now for our business outlook. For the first quarter of 2024, the Company expects the deliveries to be between 100,000 and 103,000 vehicles, representing an increase of 90.2% to 95.9% from the first quarter of 2023. The Company also expects first quarter total revenues to be between RMB31.25 billion and RMB32.19 billion, or US$4.4 billion and US$4.53 billion, representing an increase of 66.3% to 71.3% from the first quarter of last year.

現在談談我們的業務前景。該公司預計2024年第一季的交付量將在10萬至10.3萬輛之間，較2023年第一季增長90.2%至95.9%。公司還預計第一季總收入將在人民幣31.25元之間億元和人民幣321.9億元，即44億美元和45.3億美元，比去年第一季成長66.3%至71.3%。

This business outlook reflects the Company's current and preliminary review on its business situation and market conditions, which is subject to change.

本業務展望反映了公司對其業務狀況和市場狀況的當前初步審查，可能會發生變化。

That concludes our prepared remarks. I will now turn the call over to the operator to start our Q&A session. Thank you.

我們準備好的演講到此結束。我現在將把電話轉給接線員以開始我們的問答環節。謝謝。

Thank you. If you wish to ask a question, please press star-one on your telephone and wait for your name to be announced. If you wish to cancel your request, please press star-two. For the benefit of all participants on today's call please limit yourself to two questions and if you have additional questions, you can reenter the queue. If you are a Mandarin speaker please ask your questions in Chinese first, then follow with English translation.

謝謝。如果您想提問，請按電話上的星號一，然後等待宣布您的名字。如果您想取消請求，請按二號星。為了今天電話會議所有參與者的利益，請將自己的問題限制為兩個問題，如果您還有其他問題，可以重新加入隊列。如果您會說普通話，請先用中文提問，然後再用英文翻譯。

Your first question comes from Bin Wang with. Please go ahead.

你的第一個問題來自王斌。請繼續。

(Spoken in Chinese) Congratulations for a great result. I've actually got two questions. Number one is that you previously mentioned you want to deliver (inaudible) 100,000 units [month of December] this year and the per unit for single products actually can reach 130,000 units. (Inaudible) condition, you'll change your guidance? If no, when do you think (inaudible) can reach this 100,000 units and can you provide a breakdown of this 100,000 units by model?

（中文）恭喜取得好成績。我其實有兩個問題。第一，您之前提到您希望今年（12 月）交付（聽不清楚）100,000 件，單件產品的單件實際上可以達到 130,000 件。 （聽不清楚）情況，你會改變你的指導嗎？如果不是，您認為（聽不清楚）什麼時候可以達到這 100,000 台？您能否按型號提供這 100,000 台的詳細資訊？

My second question is that the Company's previous guidance was you'd be the [first tier] in the self-driving technology in China. Can I ask what's the difference or gap between the leading players in China such as Huawei and XPeng and when you think you can catch up and [exceed their positions] thank you.

我的第二個問題是，公司之前的指導是你將成為中國自動駕駛技術的[第一梯隊]。請問華為和小鵬汽車等中國領先企業之間的區別或差距是什麼？您認為自己何時可以趕上並[超越他們的位置]謝謝。

Okay, I will take the first question. This is James Zou Liangjun from Li Auto, the SVP of the Sales and Service. Very good question, Mr. Wang Bin. Our guidance remains unchanged, so we are still [talking] to sales over 100,000 models by end of this year. Starting from 2024 March we will commence delivery of the Mega and also 2024 year model L9, L8 and L7 models, making our ranges into a brand new product cycle.

好的，我回答第一個問題。我是理想汽車的銷售與服務資深副總裁鄒良軍。王斌先生，這個問題問得非常好。我們的指導方針保持不變，因此我們仍在討論到今年年底銷量超過 100,000 輛的車型。從2024年3月開始，我們將開始交付Mega以及2024年款L9、L8和L7車型，使我們的產品系列進入一個全新的產品週期。

With the launch and delivery of more competitive new products we anticipate our monthly deliveries to exceed 50,000 vehicles in March, which is next month and 70,000 in June, so the first half year. When we hit the 70,000 monthly deliveries milestone in June, the market will have a better understanding of all of our Company's assumptions and dedication. We encourage you to watch our performance in the coming months.

隨著更具競爭力的新產品的推出和交付，我們預計 3 月（也就是下個月）的月交付量將超過 50,000 輛，6 月（也就是上半年）將超過 70,000 輛。當我們在 6 月達到每月 70,000 輛交付量的里程碑時，市場將更了解我們公司的所有假設和奉獻精神。我們鼓勵您在接下來的幾個月觀看我們的表現。

I will hand over to Mr. Ma to answer your second question.

第二個問題請馬先生回答。

(Interpreted) We released our OTA 5.0 around the end of 2023 and NOA - full scenario NOA is now available in over 110 cities around China. Based on our statistics two months after the release, the daily active usage for NOA has increased 50% compared to before the OTA and we have accumulated over 100 million kilometers on NOA since the release and NOA has helped our users with over 3 million parking maneuvers. AEB has avoided over 30,000 accidents for our users. All this data and all the positive feedback from users and media are great testament to our product competitiveness.

（解讀）我們在2023年底左右發布了OTA 5.0，NOA——全場景NOA現已覆蓋中國110多個城市。根據我們在發布兩個月後的統計，NOA 的日活躍使用量比OTA 之前增加了50%，自發布以來我們在NOA 上的累計行駛里程已超過1 億公里，NOA 已幫助我們的用戶完成了超過300 萬次的停車操作。 AEB 已為我們的用戶避免了 30,000 多起事故。所有這些數據以及來自用戶和媒體的所有正面回饋都很好地證明了我們的產品競爭力。

In the second quarter of 2024, our AD Max models will be delivering mapless capability city NOA in all cities in China and will not be constrained by number of cities and will be delivered to all cars equipped with AD Max through OTA.

2024年第二季度，我們的AD Max車型將在中國所有城市提供無地圖能力城市NOA，並且不受城市數量的限制，將透過OTA交付給所有配備AD Max的汽車。

In terms of AD Pro, cars equipped with AD Pro, we will also be deploying the EV big - large model to upgrade highway NOA features, increasing the [ramp] experience and lane change experience. We are very confident to say that 2024 in terms of our AD products and R&D capabilities, we're among the top in China.

AD Pro方面，搭載AD Pro的汽車，我們也會部署EV大-大型車型，升級高速公路NOA功能，增加【坡道】體驗與變換車道體驗。我們非常有信心地說，到2024年我們的AD產品和研發能力都在國內名列前茅。

Thank you.

謝謝。

Your next question comes from Tim Hsiao with Morgan Stanley. Please go ahead.

您的下一個問題來自摩根士丹利的 Tim Hsiao。請繼續。

(Spoken in Chinese) My first question is about the production and potential bottleneck because Li Auto first quarter volume guidance of 100,000 to 103,000 units implies a very significant ramp in March to 50,000 units or more. Considering several new models are coming to the market at around the same time, including Mega, L6 (inaudible) and the whole L series, will there be any risk of supply bottleneck into March and April? What has the Company done so far to ensure the smooth production run, deliveries, while keeping the [inventory]? That's my first question.

（中文）我的第一個問題是關於產量和潛在的瓶頸，因為理想汽車第一季的銷量指導為10萬至103,000輛，這意味著3月份銷量將大幅增長至5萬輛或更多。考慮到幾款新車型幾乎同時上市，包括Mega、L6（聽不清楚）以及整個L系列，進入3、4月是否會出現供應瓶頸的風險？到目前為止，公司採取了哪些措施來確保順利生產、交貨，同時保持[庫存]？這是我的第一個問題。

(Interpreted) First of all, we have a lot of great experience in new product launches and ramp up to achieve volume shortly after product launch. In the first calendar month after the launch of L7 and L9 respectively, we have been able to successfully produce and deliver over 10,000 units for each model and we have collected all these best practices and lessons learned and put them into our system. So, whether it's new factories or new employees, they are all able to very easily replicate the success in the past.

（解讀）首先，我們在新產品發布以及產品發布後不久就開始量產方面有很多豐富的經驗。在L7和L9分別推出後的第一個日曆月裡，我們已經能夠成功生產和交付每種型號的超過10,000台，我們收集了所有這些最佳實踐和經驗教訓，並將它們放入我們的系統中。所以，無論是新工廠還是新員工，都能夠非常輕鬆地複製過去的成功。

In terms of new models, on the R&D front, all the new vehicle lines are being developed on schedule. In terms of production, we have already completed the construction of our factory ahead of time and recruited and trained the relevant blue-collar workers.

新車型方面，研發方面，所有新車型都在按計劃開發。在生產方面，我們已經提前完成了工廠的建設，並招募和培訓了相關的藍領工人。

On the supply front, we have already built the supply capabilities and completed the risk analysis and have created plans and strategies based on the risks identified.

在供應方面，我們已經建立了供應能力，完成了風險分析，並根據識別的風險制定了計劃和策略。

On the planning front, using our new integrated planning system, we have connected supply and demand end to end and have locked down all of the necessary requirements from end to end.

在規劃方面，利用我們新的綜合規劃系統，我們將供應和需求端到端地連接起來，並從頭到尾鎖定了所有必要的要求。

2024 will be a big year in terms of new product launches, and we are very confident to maintain the consistency and timeliness of our supply.

2024年將是新產品推出的重要一年，我們非常有信心保持供應的一致性和及時性。

(Spoken in Chinese) The second question is about product planning. After Li Auto's launch of L6 in April, the Group's model portfolio would comprehensively cover segment about RMB250,000 or around $35,000. Will Li Auto consider to tap into the sub $35,000 market any time soon? That presents a more sizeable market for NEV conversion.

（中文） 第二個問題是關於產品規劃的。理想汽車於四月推出L6後，集團的車型組合將全面覆蓋約人民幣25萬元（約3.5萬美元）的細分市場。理想汽車是否會考慮很快進軍35,000美元以下的市場？這為新能源汽車轉換提供了更大的市場。

Separately, is there any tech constraint or disadvantage likely preventing Li Auto from building compact or low-price EREV SUV models to compete with the local peers? That is my second question.

另外，是否存在任何技術限製或劣勢可能阻止理想汽車生產緊湊型或低價的增程式SUV車型來與本土同行競爭？這是我的第二個問題。

(Interpreted) If we look five years down the road, we have no plans to launch any vehicles below the RMB200,000 price point. If we think about long term, up to 2030, even if we only focus on the market over RMB200,000, just family users, if we were able to take one-third of that market in China, our total sales would already be more than RMB1 trillion.

（解讀）如果放眼五年，我們沒有打算推出20萬元以下價位的車款。如果我們考慮長遠的話，到2030年，即使我們只專注於20萬元以上的市場，只是家庭用戶，如果我們能在中國拿下三分之一的市場，我們的總銷售額就已經更多了。超過1兆元。

If you consider overseas, by 2030, this market will create a business close to the revenue of all iPhones sold worldwide combined. This is a huge goldmine that we think we have only mined a very small portion of, so there is no need to distract ourselves at this point. Rather, we would like to focus exclusively on the over RMB200,000 family market globally, and our strategy is to continue to dive deep into this market, create a brand and expand our market share.

如果考慮海外，到 2030 年，這個市場創造的業務將接近全球銷售的所有 iPhone 的收入總和。這是一座巨大的金礦，我們認為我們只開採了其中的一小部分，因此此時無需分散注意力。相反，我們更願意專注於全球20萬以上的家庭市場，我們的策略是繼續深耕這個市場，打造品牌，擴大市場佔有率。

Thanks for sharing all the great color, and congratulations on a great result again. Thank you.

感謝您分享所有出色的色彩，並再次祝賀您取得了出色的成績。謝謝。

Your next question comes from Yingbo Xu with CITIC Securities. Please go ahead.

你的下一個問題來自中信證券的徐英波。請繼續。

(Spoken in Chinese) I have two questions. The first question is about pricing and volume balance, and how we see the profitability and volume increase by adjustment of pricing in different periods.

（用中文發言）我有兩個問題。第一個問題是關於定價和銷售的平衡，以及我們如何看待不同時期定價調整帶來的利潤和銷售的成長。

My second question is about the following EV models. How do we plan after the MEGA model? Could you please give us some more color? Thank you.

我的第二個問題是關於以下電動車車型。 MEGA模型之後我們如何規劃？你能給我們更多的顏色嗎？謝謝。

This is Johnny. For the first question, when we set out the full-year sales target, we have already considered about competition and also the pace we launch our product. So when we consider that, we still -- what we want to say as before, we will maintain healthy gross profit margin of over 20%, and based on the market competition, the gross margin will fluctuate between 20% to 25% for different quarters.

這是約翰尼。第一個問題，我們在設定全年銷售目標的時候，就已經考慮了競爭的情況，也考慮了產品上市的節奏。所以當我們考慮到這一點時，我們仍然——我們想說的是，我們將保持20%以上的健康毛利率，並且根據市場競爭情況，毛利率將在20%至25%之間波動。宿舍。

Just like last quarter, I think everyone was worried about the competition in the fourth quarter, there would be some promotion. But for every quarter, there will be some other (inaudible) from the supply side and also from the material price side. So net-net you can see from our fourth quarter, even we have some promotion in the fourth quarter, we have more good news from the (inaudible) side, even though our cost margin increased compared with the third quarter.

就像上季一樣，我想大家都擔心第四季的比賽，會有一些晉級。但每季都會有來自供應方和材料價格方的其他一些（聽不清楚）。因此，您可以從我們的第四季度看到，即使我們在第四季度有一些促銷，我們也從（聽不清楚）方面得到了更多好消息，儘管我們的成本利潤率與第三季度相比有增加。

(Interpreted) For the first half of the year, we will be releasing in our March 1 spring event Li MEGA as well as 2024 model year Li L7, L8 and L9. Also in the first half, we'll be releasing the L6.

（解讀）上半年，我們將在3月1日春季活動中發表Li MEGA以及2024年款Li L7、L8和L9。同樣在上半年，我們將發布 L6。

In the second half of the year, as we've communicated before, we will be releasing yet another three pure electric SUV models, all come standard with 5C charging and all-wheel drive. I would like to emphasize those cars are very competitive, and they will become the top choice for family users in their respective price segments.

下半年，正如我們之前溝通過的，我們將再推出三款純電動SUV車型，全部標配5C充電和全輪驅動。我想強調的是，這些車非常有競爭力，它們將成為各自價位段家庭用戶的首選。

2024 will be an unprecedented product year for Li Auto. By the end of the year, we will have four range extended models and four very competitive BEV models. These products are all very competitive, and they will together serve the needs of our family users.

2024年對於理想汽車來說將是前所未有的產品年。今年底，我們將擁有四款增程車型和四款極具競爭力的純電動車型。這些產品都非常具有競爭力，它們將共同服務於我們家庭用戶的需求。

Your next question comes from Tina Hou with Goldman Sachs.

您的下一個問題來自高盛的蒂娜·侯。

(Spoken in Chinese) Thanks, management, for taking my questions, and congrats on the very strong result. I have two questions. The first one is in terms of the three BEV models in the second half of the year. Considering the battery price as well as 5C charging capability and then initially smaller volumes versus your EREV models, what kind of margin difference should we expect for the BEV models?

（中文）感謝管理層回答我的問題，並祝賀取得了非常好的成績。我有兩個問題。第一個是下半年的三款純電動車款。考慮到電池價格以及 5C 充電能力，以及與 EREV 車型相比最初的較小體積，我們應該期望 BEV 車型有什麼樣的利潤差異？

The second question is in terms of the overseas expansion. What is the management's latest thought for overseas sales volume target over the next three to five years? Thank you.

第二個問題是關於海外擴張的問題。管理階層對未來三到五年海外銷售目標的最新想法是什麼？謝謝。

Tina, this is Johnny. For the gross margin, as we mentioned in the previous calls, both for the BEV and EREV series, the overall (inaudible) gross margin will be 25% for both series. So when we start from MEGA and then the 9 series, the gross margin will start from higher to lower.

蒂娜，這是強尼。對於毛利率，正如我們在先前的電話會議中所提到的，對於 BEV 和 EREV 系列，兩個系列的總體（聽不清楚）毛利率均為 25%。所以當我們從MEGA開始，然後是9系列時，毛利率就會從高到低。

Also we want still to emphasize the product gross margin established when you define your product. Our products are designed to ensure a healthy gross margin and also balance the customers' demand for each car. Also from the material side, like the battery material, since the second half of last year, I think it's a good time to launch our BEV models starting from this year.

此外，我們仍然想強調您定義產品時確定的產品毛利率。我們的產品旨在確保健康的毛利率，並平衡客戶對每輛車的需求。另外從材料方面來說，像是電池材料，從去年下半年開始，我覺得從今年開始就是推出我們純電動車型的好時機。

Okay, Tina. James. I will take your second question. First of all, the overseas market is very important to Li Auto. We are aiming to start to explore the overseas market and we are accelerating it.

好的，蒂娜。詹姆士。我來回答你的第二個問題。首先，海外市場對於理想汽車來說非常重要。我們的目標是開始開拓海外市場，並且正在加速前進。

Regarding our plan for overseas export, we remain committed to our direct sales model in the overseas market, focusing on building a robust sales network and comprehensive aftersales service offering infrastructure. With Li Auto's growing popularity globally, we are accelerating the development of product sales service networks and the spare parts supply chains to ensure outstanding service experience for our international customers.

關於海外出口計劃，我們仍致力於海外市場的直銷模式，專注於建立強大的銷售網絡和全面的售後服務基礎設施。隨著理想汽車在全球知名度的不斷提高，我們正在加快產品銷售服務網路和零件供應鏈的發展，以確保為國際客戶提供卓越的服務體驗。

By the way, we have successfully set up operations in the Middle East and initiated the recruitment of local sales and service teams in Dubai. In the first half year this year, we plan to establish a dedicated aftersales service network in central Asia and the Middle East.

順便說一句，我們已經成功在中東建立了業務，並在杜拜開始招募當地銷售和服務團隊。今年上半年，我們計劃在中亞和中東建立專門的售後服務網。

By the first quarter of this year, we will commence overseas delivery, starting with the introduction of L9 and L7 models in local regions, by the way, which is also customized for the local environment and the political and local policies.

今年第一季我們會開始海外交付，首先在當地推出L9、L7車型，順便說一句，這也是針對當地環境和政治、地方政策而定制的。

Your next question comes from Ming-Hsun Lee with Bank of America. Please go ahead.

您的下一個問題來自美國銀行的 Ming-Hsun Lee。請繼續。

(Spoken in Chinese) My first question is still related to gross margin trend in the first quarter and the second quarter. In the first quarter, because you are selling the 2023 version of L7, L8 and L9, will your gross margins be slightly lower than Q4?

（中文發言） 我的第一個問題仍然是關於第一季和第二季的毛利率趨勢。第一季度，因為你們在賣2023年版的L7、L8、L9，你們的毛利率會比Q4略低嗎？

In the second quarter, since you have a full quarter contribution from MEGA, do you expect the gross margin to recover? Also, how is the L6, to overall margin? (Spoken in Chinese),

第二季度，由於MEGA提供了整個季度的貢獻，您預計毛利率會恢復嗎？另外，L6的整體利潤率如何？ (以中文發言),

Hi, this is Johnny. I think all the factors you mentioned are clear for the gross margin. The Company will maintain a healthy gross margin of about 20% for the first quarter. As we mentioned earlier, the Company will also maintain a healthy gross margin, which means always about 20% throughout the full year.

嗨，這是約翰尼。我認為你提到的所有因素對於毛利率來說都是明確的。公司第一季毛利率將維持在20%左右的健康水準。正如我們之前提到的，該公司還將保持健康的毛利率，這意味著全年始終保持在 20% 左右。

For the MEGA and 2024 model of the L series, it will be a positive factor for the gross margin, starting from March.

對於L系列的MEGA和2024款來說，從3月開始，這將是毛利率的正面因素。

L6 will be [negative] if we want to say - to be for the over 20% gross margin, and with our volume growth, it will be a positive factor for the gross margin. For every quarter there are some positives and negatives, which is helpful for you.

如果我們想說，L6 將是[負] - 毛利率超過 20%，隨著我們銷量的增長，這將是毛利率的積極因素。每個季度都有一些正面和負面的事情，這對你有幫助。

(Spoken in Chinese) Li Auto plans to expand their charging stations to 2,000 by the end of this year. What do we expect total CapEx to be?

（中文）理想汽車計畫今年底將充電站數量增加至2,000個。我們預計總資本支出是多少？

Previously, the Chairman mentioned that charging stations could be a profitable investment project. So when do you expect your charging stations can reach breakeven or (inaudible) break even? Thank you.

此前，董事長提到充電站可能是個有利可圖的投資項目。那麼，您預計您的充電站何時可以達到收支平衡或（聽不清楚）收支平衡？謝謝。

I will take this question. James. By the end of 2024, the Company plans to build a total of 2,000 charging stations, as you just mentioned. By the end of this year, we will have built over 700 highway supercharging stations covering 70% of the highways in China as well as 90% of the highways in the four major economic zones.

我來回答這個問題。詹姆士。正如你剛才提到的，到2024年底，公司計畫建造充電站共2000個。今年底，我們將建造700多個高速公路增壓站，覆蓋全國70%的高速公路和四大經濟區90%的高速公路。

With the successive launches of BEV models this year, we have also begun to simultaneously accelerate the expansion of charging stations in cities. We anticipate that by the end of this year, the number of charging stations in cities will exceed 1,300, so totaling 2,000.

今年隨著純電動車型的陸續推出，我們也開始同步加速城市充電站的擴建。我們預計，到今年年底，城市充電站數量將超過1300個，總計2000個。

The Company's cash reserves are ample, and we have allocated sufficient capital for the construction of charging stations. The Company has detailed operating models for the valuation of each charging station, and by the way, personally, I am looking after each and every charging station investment. Each station has its own profitability and ROI target.

公司現金儲備充裕，有足夠的資金充電站建置。公司對於每一個充電站的估值都有詳細的營運模式，順便說一下，我個人是在關注每個充電站的投資的。每個站點都有自己的獲利能力和投資報酬率目標。

From a long-term perspective, we are very confident in our charging stations profitability prospect. Thank you.

從長遠來看，我們對充電站的獲利前景非常有信心。謝謝。

Your next question comes from Yuqian Ding with HSBC.

你的下一個問題來自匯豐銀行的丁宇謙。

(Spoken in Chinese) Two questions. The first, we noticed the industry is going through a painful consolidation. While Li Auto booked record high earnings, many are struggling. How to look at the inflection point of the industry consolidation against the weak car demand and a continuous pricing war, including Li Auto? What is Li Auto's strategy priority list this year?

（中文）兩個問題。首先，我們注意到該行業正在經歷痛苦的整合。雖然理想汽車的盈利創下歷史新高，但許多公司都在苦苦掙扎。在汽車需求疲軟、價格戰持續的情況下，包括理想車在內，如何看待產業整合的轉折點？理想汽車今年的策略重點是什麼？

Second question is, management talked about OTA and NOA in more cities and scenarios. When would be the iPhone moment for the autonomous driving development from management's perspective and how to read, in spite of the technology progress, the current autonomous driving market offering might be running homogenous and lack of revenue model in the near-term?

第二個問題是，管理層談到了更多城市和場景的OTA和NOA。從管理層的角度來看，自動駕駛發展的 iPhone 時刻是什麼時候？如何解讀儘管技術進步，但當前的自動駕駛市場產品在短期內可能運行同質化且缺乏收入模式？

(Interpreted). So, as we've always maintained before, we believe in the smart EV industry there will be a very clear [massive] effect as we'll see in the very near future. Here I'll make a prediction. By Q4 this year, in the market of RMB200,000 and above, the top three brands will command around close to 70% of market share, or in other words, CR3 will reach close to 70% and we can test this hypothesis by the end of this year.

（解釋）。因此，正如我們之前一直堅持的那樣，我們相信智慧電動車產業將會產生非常明顯的[巨大]影響，正如我們在不久的將來所看到的那樣。這裡我就做一個預測。到今年第四季度，在20萬元及以上的市場中，前三大品牌將佔據接近70%的市場份額，或者說CR3將達到接近70%的份額，我們可以透過以下方式來檢驗這個假設：今年年底。

In order to prevail in this competitive environment, we will continue to focus on user value creation, which will convert into our competitive advantage. So, on the product front, we will continue to focus on making all details perfect and delivering the full product experience to our users. On the R&D front, we will invest in our autonomous driving, smart space and high voltage and range extended EV platforms and convert all these investments into user value.

為了在這個競爭環境中獲勝，我們將繼續專注於用戶價值的創造，這將轉化為我們的競爭優勢。所以，在產品方面，我們會繼續專注於細節的完善，為使用者提供完整的產品體驗。在研發方面，我們將投資自動駕駛、智慧空間、高壓增程式電動車平台，並將這些投資全部轉化為使用者價值。

With that, our goal continues to be selling 800,000 units this year in 2024 and becoming the top 1 premium brand in China. The team is all lined up to be ready to achieve this goal this year.

因此，我們的目標是到2024年銷售量達到80萬台，成為中國第一高端品牌。團隊已做好準備，準備今年實現這一目標。

Personally, I believe the iPhone 4 moment for autonomous driving will come in two to three years. iPhone 4 completely changed people's perception of smartphones. The iPhone 4 itself may not be perfect, but it encompasses all the important factors for its success, including industrial design, user interaction, hardware, software, and business model.

就我個人而言，我相信 iPhone 4 的自動駕駛時刻將在兩到三年內到來。 iPhone 4徹底改變了人們對智慧型手機的看法。 iPhone 4本身可能並不完美，但它包含了其成功的所有重要因素，包括工業設計、使用者互動、硬體、軟體和商業模式。

Compare that to autonomous driving, with L2 and L3 reaching scale and being delivered in volume and data continues to accumulate, as well as the deployment of AI's large models. I believe that autonomous driving will reach an inflection point, reaching its iPhone 4 moment, and maybe all of a sudden, overnight, all of the cars equipped with the hardware, maybe hundred thousands of or even over a million will achieve autonomous driving.

對比自動駕駛，L2、L3已經達到規模、大量交付，數據不斷積累，AI大模型也開始部署。我相信自動駕駛將會到達一個拐點，到達iPhone 4時刻，也許突然之間，一夜之間，所有配備該硬體的汽車，也許幾十萬甚至上百萬輛都將實現自動駕駛。

So, for Li Auto, we continue to invest in making autonomous driving hardware standard for all of our vehicles and we have no plans for a subscription or extra charge at the moment. Making autonomous driving standard will bring us as many users as possible, collect as much data as possible and helps us to increase and improve our algorithms and improve the experience for our users. That creates a very positive cycle.

因此，對於理想汽車來說，我們將繼續投資為我們所有車輛制定自動駕駛硬體標準，目前我們沒有訂閱或額外收費的計劃。制定自動駕駛標準將為我們帶來盡可能多的用戶，收集盡可能多的數據，幫助我們增加和改進我們的演算法，改善用戶的體驗。這創造了一個非常積極的循環。

As we are reaching the end of our conference call now, I'd like to turn the call back over to Kobe Wang for any additional or closing comments.

現在我們的電話會議即將結束，我想將電話轉回給科比·王，以徵求任何補充或結束意見。

Thank you once again for joining us today. If you have any more questions, please feel free to contact Li Auto's IR team. That concludes this conference call. You may now disconnect your line. Thank you. Bye.

再次感謝您今天加入我們。如果您還有其他疑問，請隨時聯繫理想汽車IR團隊。本次電話會議到此結束。現在您可以斷開線路。謝謝。再見。