理想汽車 (LI) 2024 Q3 法說會逐字稿

Hello, ladies and gentlemen. Thank you for standing by for Li Auto's third-quarter 2024 earnings conference call. (Operator Instructions) Today's conference call is being recorded.

女士們、先生們，大家好。感謝您出席理想汽車 2024 年第三季財報電話會議。 （操作員指示）今天的電話會議正在錄音。

I will now turn the call over to your host, Ms. Janet Zhang, Investor Relations Director of Li Auto. Please go ahead, Janet.

現在我將把電話轉給你們的主持人，理想汽車投資者關係總監張靜女士。請繼續，珍妮特。

Thank you, operator. Good evening, and good morning, everyone. Welcome to Li Auto's third-quarter 2024 earnings conference call. The company's financial and operating results were published in our press release earlier today and are 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2024年第三季財報電話會議。該公司的財務和經營業績已在我們今天早些時候的新聞稿中發布，並發佈在該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 Vice President, Mr. James Liangjun Zou will join for the Q&A discussion.

出席今天的電話會議的有我們的董事長兼執行長李翔先生；我們的財務長 Johnny Tie Li 先生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 risks and uncertainties. As such, the company's actual results may be materially different from the views speak for us today. Further information regarding risks and uncertainties is included in certain company filings with US.

在我們繼續之前，請注意，今天的討論將包含根據美國安全港條款做出的前瞻性陳述。 1995 年私人證券訴訟改革法案。因此，該公司的實際結果可能與我們今天的觀點有重大差異。有關風險和不確定性的更多資訊包含在某些公司向美國提交的文件中。

Securities and Exchange Commission and the Stock Exchange of Hong Kong Limited. The company does not assume any obligation to update any forward-looking statements, except as required under applicable law. Please also note that Li Auto's earnings press release and this conference call include discussions of unaudited US. GAAP financial information as well as unaudited non-GAAP financial measures.

美國證券交易委員會及香港聯合交易所有限公司。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。另請注意，理想汽車的財報新聞稿和本次電話會議包括未經審計的美國討論。公認會計準則財務資訊以及未經審計的非公認會計準則財務指標。

Please refer to Li Auto's disclosure documents on the IR section of our website, which contains a reconciliation of the unaudited non-GAAP measures to comparable US. GAAP measures. 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.

請參閱我們網站IR部分的理想汽車揭露文件，其中包含未經審計的非公認會計準則指標與美國可比較指標的調節表。公認會計準則措施。我們的執行長將用中文開始講話。他發言結束後將有英文翻譯。現在我將把電話轉給我們的執行長李翔先生。請繼續。

(interpreted) Hello, everyone. This is Xiang Li, and thank you for joining today's earnings conference call. In the third quarter, China's NEV penetration rate has reached 50.3%, marking the first time NEV overtook ICE vehicles in terms of new vehicle registration. The market share of leading brands continue to expand, especially in the RMB200,000 and over NEV market, where the top three brands combined account for over 50% market share in Q3. Li Auto delivered over 152,000 vehicles in Q3, up 45.4% year-over-year and driving our segment market share to 17.3% in Q3 and compared to 14.4% in Q2.

（譯）大家好。我是李翔，感謝您參加今天的收益電話會議。第三季度，中國新能源汽車滲透率達50.3%，新車註冊量首次超過內燃機汽車。領先品牌市佔率持續擴大，特別是20萬元以上新能源汽車市場，第三季前三大品牌合計市佔率超過50%。理想汽車第三季交車超過15.2萬輛，較去年同期成長45.4%，使我們的細分市佔率從第二季的14.4%升至第三季的17.3%。

Our historically high quarterly deliveries and market shares solidify our market leadership in this segment.

我們創歷史新高的季度交付量和市場份額鞏固了我們在該領域的市場領導地位。

In addition, our sales in China's overall RMB200,000 above PV market surpassed multiple established European premium brands for the very first time, making us the top three brands among all brands and number one across all Chinese brands in this segment. With a multitude of players entering the ERV market, Li L-series sustained its strong sales performance. partly attributable to our ongoing innovation and high-quality monthly OTA updates, encompassing improvements in autonomous driving, smart cockpit and electric drive. In Q3, the average monthly sales of Li L series exceeded 50,000 units. It is worth noting that ABMAc's take rate continues to grow owing to our investments in R&D that have led to rapid iterations and breakthroughs in our vehicles autonomous driving capabilities.

此外，我們在中國整體20萬元以上光伏市場的銷售額首次超越多個老牌歐洲高端品牌，成為該細分市場所有品牌中的前三名、中國品牌中的第一名。隨著眾多廠商進入ERV市場，Li L系列持續保持強勁的銷售業績。部分歸功於我們持續的創新和高品質的每月 OTA 更新，包括自動駕駛、智慧駕駛艙和電力驅動方面的改進。第三季度，Li L系列月均銷售量突破5萬台。值得注意的是，ABMAc的採用率持續成長，得益於我們在研發上的投入，使得我們的車輛自動駕駛能力快速迭代和突破。

The deployment not only reflects user recognition of our technologies, but also improves our overall product rigs. In the third quarter, we continued to upgrade our sales and servicing network. As of the end of September, we had 479 retail stores located in 145 cities as well as 436 service centers and Li Auto authorized body and paint shops operating in 221 cities in China. Among these, 165 sales centers are located in major auto parts and premium commercial properties with 9 to 11 display spots per store driving our total display spots to over 3,000. This supports the sales growth of our existing models will also prepare us for the launch of PUV, SUV.

此次部署不僅體現了用戶對我們技術的認可，也提升了我們整體產品裝備。第三季度，我們持續升級銷售和服務網路。截至9月底，我們在中國145個城市擁有479家零售店，在中國221個城市擁有436家服務中心和理想汽車授權車身及噴漆店。其中，165個銷售中心分佈在各大汽配及高端商業地產，每店擁有9至11個展示點，總展示點超過3,000個。這支持了我們現有車型的銷售成長，也將為我們推出 PUV、SUV 做好準備。

On the supercharging network as of now, we have 1,000 supercharging stations with 4,888 charging stores operating in 175 cities across 31 provinces nationwide. Notably, our network includes 582 Li Auto supercharging stations along highways, the largest network of its kind in China. In addition, we continue to strengthen our collaboration with premium partners in the industry. On October 12, we officially formed strategic cooperation with Sinopec on charging station construction and platform interconnectivity. As of now, our Li selection supercharging network includes 1,200 high-power, highly stable third-party charging stations.

截至目前，我們的超級充電網路已擁有1,000個超級充電站、4,888個充電店，覆蓋全國31個省份的175個城市。值得注意的是，我們的網路包括高速公路沿線的 582 個理想汽車超級充電站，是中國同類網路中最大的。此外，我們持續加強與業界優質合作夥伴的合作。 10月12日，我們與中國石化在充電站建置、平台互聯方面正式形成策略合作。截至目前，我們的鋰選超級充電網路包括1,200個高功率、高穩定的第三方充電站。

We remain on track in terms of our BV strategy, charging efficiency and reliability remain top concerns for BV customers.

我們的 BV 策略仍處於正軌，充電效率和可靠性仍然是 BV 客戶最關心的問題。

We will continue to accelerate the deployment of our charging network while actively exploring new technologies aiming to establish an industry-leading charging network covering both highways and urban areas by next year. The initiative will prepare us for the launch of our BUV electric SUVs and ensure that we continue to provide convenient and reliable charging experience for a growing number of users.

我們將繼續加快充電網路部署，積極探索新技術，力爭明年建成覆蓋高速公路和城市區域的業界領先充電網路。這項措施將為我們推出 BUV 電動 SUV 做好準備，並確保我們繼續為越來越多的用戶提供便利可靠的充電體驗。

Moving on to autonomous driving. Since its release in July, our proprietary full fact end-to-end and vision language model, autonomous driving solution has been iterating at a rate of two to three versions per week. In just three months, the amount of training data per model went from 1 million video clips to 4 million, while the average mileage per intervention increased nearly 2.5 times. Our new system one system two autonomous driving solutions significantly enhanced user experience with its robust model and deep comprehension of the traffic environment.

轉向自動駕駛。自7月發布以來，我們專有的全事實端到端和視覺語言模型自動駕駛解決方案一直以每週兩到三個版本的速度迭代。短短三個月內，每個模型的訓練資料量從 100 萬個影片片段增加到 400 萬個影片片段，而每次介入的平均里程數增加了近 2.5 倍。我們的新系統一系統二自動駕駛解決方案憑藉其強大的模型和對交通環境的深入理解，顯著增強了使用者體驗。

On October 23, we began rolling out OTA 6.4 for Li MEGA and Li L series. The update includes our new autonomous driving solution, which is now fully deployed on over 320,000 Li AD Max vehicles, only three months after we rolled out our nationwide map lease in LA in July. The OTA 6.4 update also features a more lively Li Xiang Tong Xue, Task Master 2.0 powered by large language models, and improved charging experience, among many other improvements. Our industry-leading amount of real-world training data is a key competitive advantage and powers rapid innovations in autonomous driving.

10 月 23 日，我們開始為 Li MEGA 和 Li L 系列推出 OTA 6.4。此次更新包括我們新的自動駕駛解決方案，該解決方案現已全面部署在超過 320,000 輛 Li AD Max 車輛上，距離我們 7 月在洛杉磯推出全國地圖租賃僅三個月。 OTA 6.4 更新還包括更活潑的理象同學、由大型語言模型提供支援的 Task Master 2.0、改進的充電體驗等諸多改進。我們業界領先的真實世界訓練資料量是一項關鍵的競爭優勢，並為自動駕駛領域的快速創新提供動力。

As of October 30, our total real-world training mileage has reached 2.6 billion kilometers with NOE mileage hitting 1.39 billion kilometers and automated parking has been activated 60 million tonnes. Additionally, our active safety features have prevented 3.45 million potential accident, including 516 severe accidents. In Q3 2024, our total revenues reached a record high of RMB42.9 billion, up 23.6% year-over-year. Our gross margin expanded to 21.5% and non-GAAP income from operations hit an all-time high of RMB4.4 billion and operating cash flow reached RMB11 billion. The solid financial performance is driven by our improving product mix, economies of scale and operating efficiency.

截至10月30日，實訓總里程已達26億公里，其中NOE里程達13.9億公里，自動停車累計啟動量6000萬噸。此外，我們的主動安全功能已避免潛在事故345萬起，其中嚴重事故516起。 2024年第三季度，我們的總營收創歷史新高，達到人民幣429億元，年增23.6%。毛利率擴大至21.5%，非美國通用會計準則經營收入創歷史新高，達到人民幣44億元，營運現金流達人民幣110億元。穩健的財務表現得益於我們不斷改善的產品組合、規模經濟和營運效率。

In October, we reached an important milestone of 1 million cumulative vehicle deliveries in just 58 months the first among emerging new energy vehicle automotive brands in China. The milestone marked a new beginning. Looking forward, we will continue to innovate through R&D and develop outstanding products and services. while maintaining our production and delivery efficiency as an industry leader. In Q4 of this year, we expect vehicle deliveries to be between 160,000 to 170,000 units with full year deliveries falling between 502,000 and 512,000 units.

10月，我們在短短58個月內實現了累計交付100萬輛汽車的重要里程碑，成為中國新興新能源汽車品牌第一。這一里程碑標誌著一個新的開始。展望未來，我們將持續透過研發創新，開發出優秀的產品與服務。同時保持我們作為行業領導者的生產和交付效率。今年第四季度，我們預計汽車交付量將在 16 萬至 17 萬輛之間，全年交付量將在 50.2 萬至 51.2 萬輛之間。

Last but not least, I would like to share the highlights in our ESG performance. In September, we received MSCI's highest AAA BSG rating for the second consecutive year, a testament to our outstanding performance in corporate governance, product quality and safety and clean energy technology. We will continue to explore cutting-edge low-carbon technologies and implement green operational management practices, proactively fulfilling our social responsibilities. I will now turn it over to our CFO, Johnny, to walk you through our financial performance.

最後但並非最不重要的一點是，我想分享我們 ESG 表現的亮點。 9月，我們連續第二年獲得MSCI最高的AAA BSG評級，證明了我們在公司治理、產品品質安全、清潔能源技術方面的出色表現。我們將持續探索前沿低碳技術，推行綠色營運管理實踐，積極履行社會責任。現在我將把它交給我們的財務長約翰尼，讓您了解我們的財務表現。

Thank you, Xiang. Hello, everyone. I will now walk you through some of our 2024, third 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. Total revenues in the third quarter were RMB42.9 billion or USD 6.1 billion, up 23.6% year-over-year and 35.3% quarter-over-quarter.

謝謝你，翔。大家好。現在，我將向您介紹我們 2024 年第三季的一些財務數據。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。第三季總營收為429億元人民幣（61億美元），年增23.6%，季增35.3%。

It included RMB41.3 billion or USD 5.9 billion from vehicle sales up 22.9% year-over-year and 36.3% quarter-over-quarter. The year-over-year and sequential increase was primarily attributable to the increase in vehicle deliveries, partially offset by the lower average selling price mainly due to the different product mix. Cost of sales in the third quarter was RMB33.6 billion or USD 4.8 billion, up 24.5% year-over-year and 32% quarter-over-quarter.

其中汽車銷量為 413 億元（59 億美元），年增 22.9%，季增 36.3%。年比和環比增長主要歸因於車輛交付量的增加，部分被由於產品組合不同而導致的平均售價較低所抵消。第三季銷售成本為336億元人民幣（48億美元），較去年同期成長24.5%，較上季成長32%。

Gross profit in the third quarter was RMB9.2 billion or USD 1.3 billion up 20.7% year-over-year and 49.3% quarter-over-quarter. Vehicle margin in the third quarter was 20.9%, relatively stable compared with 21.2% in the same period last year and improved from 18.7% in the last quarter. The sequential increase was mainly due to the cost reduction, partially offset by the lower average selling price mainly due to the different product mix. Gross margin in the third quarter was 21.5% versus 22% in the same period last year and 19.5% in the prior quarter.

第三季毛利為92億元人民幣（13億美元），較去年同期成長20.7%，季增49.3%。第三季整車利潤率為20.9%，與去年同期的21.2%相比相對穩定，較上季的18.7%有所改善。環比成長主要是由於成本降低，但部分被產品組合不同導致的平均售價降低所抵銷。第三季毛利率為21.5%，去年同期為22%，上一季毛利率為19.5%。

Operating expenses in the third quarter were RMB5.8 billion or USD 825.4 million, up 9.2% year-over-year and 1.5% quarter-over-quarter. R&D expenses in the third quarter were RMB2.6 billion or USD 368.6 million, down 8.2% year-over-year and 14.6% quarter-over-quarter. The year-over-year and sequential decrease was primarily due to the decreased design and development costs for new products and technology and decreased employee compensation . SG&A expenses in the third quarter were RMB3.4 billion or USD 478.7 million up 32.1% year-over-year and 19.3% quarter-over-quarter. The year-on-year and the sequential increase was primarily due to the increase employee compensation associated with the recognition of share-based compensation expenses regarding the CEO's performance-based awards in the third quarter of this year as the achievement of the related performance condition was deemed profitable.

第三季營運費用為58億元人民幣（8.254億美元），年增9.2%，季增1.5%。第三季研發費用為26億元（3.686億美元），年減8.2%，季減14.6%。年比和環比下降主要是由於新產品和技術的設計和開發成本下降以及員工薪酬下降。第三季銷售管理及行政費用為 34 億元（4.787 億美元），年增 32.1%，季增 19.3%。年比及環比增加主要是由於今年第三季CEO績效獎勵的股權激勵費用因實現相關業績條件而確認的員工薪酬增加所致被視為有利可圖。

Income from operations in the third quarter was RMB3.4 billion or USD 489.2 million, up 46.7% year-over-year and 633.4% quarter-over-quarter. Operating margin in the third quarter was 8%. It grew from 6.7% in the same period last year and 1.2% in the prior quarter. Net income in the third quarter was RMB2.8 billion, USD 401.9 million, up 0.3% year-over-year and 156.2% quarter-over-quarter. Diluted net earnings per ADS attributable to ordinary shareholders was RMB2.66 or USD 0.38 in the third quarter versus RMB2.67 in the same period last year and RMB1.05 in the prior quarter.

第三季營業收入為34億元人民幣（4.892億美元），較去年同期成長46.7%，較上季成長633.4%。第三季營業利益率為8%。較去年同期的 6.7% 和上一季的 1.2% 有所成長。第三季淨利為28億元（4.019億美元），年增0.3%，季增156.2%。第三季稀釋後歸屬於普通股股東的每股美國存託股淨利為人民幣2.66元或0.38美元，去年同期為人民幣2.67元，上一季為人民幣1.05元。

And now turning to our balance sheet and cash flow. Our cash position remained strong and stood at RMB106.5 billion or USD 15.2 billion as of September 30, 2024. Net cash provided by operating activities in the third quarter was RMB11 billion or USD 1.6 billion versus net cash provided by operating activities of RMB14.5 million in the same period last year, and net cash used in operating activities of RMB429.4 million in the prior quarter. Free cash flow was RMB9.1 billion or USD 1.3 billion in the third quarter versus RMB13.2 billion in the same period last year, a negative RMB1.9 billion in the prior quarter.

現在轉向我們的資產負債表和現金流。截至2024 年9 月30 日，我們的現金狀況依然強勁，為1,065 億元人民幣（152 億美元）。提供的現金淨額為14 億元人民幣。第三季自由現金流為 91 億元人民幣（13 億美元），去年同期為 132 億元人民幣，較上一季負 19 億元。

And now for our business outlook. For the fourth quarter of 2024, the company expects the deliveries to be between 160,000 and 170,000 vehicles representing a year-over-year increase of 21.4% to 29%. The company also expects fourth quarter total revenues to be between RMB43.2 billion and RMB45.9 billion or USD 6.2 billion and USD 6.5 billion, representing a year-over-year increase of 3.5% to 10%. This business outlook reflects the company's current and the preliminary review on its business situation and market condition, which is subject to change. That concludes our prepared remarks.

現在談談我們的業務前景。該公司預計2024年第四季的交付量將在16萬至17萬輛之間，年增21.4%至29%。該公司也預計第四季總營收將在432億元人民幣至459億元人民幣或62億美元至65億美元之間，年增3.5%至10%。本業務展望反映了公司目前及其對其業務狀況和市場狀況的初步審查，可能會發生變化。我們準備好的演講到此結束。

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

我現在將把電話轉給接線員以開始我們的問答環節。謝謝。

(Operator Instructions) Tim Hsiao, Morgan Stanley.

（操作員指示）Tim Hsiao，摩根士丹利。

(interpreted) So my first question is about the potential growth potential -- the full year target of (inaudible) units implies the average multi-sales of L Series could they exceed 53,000 in fourth quarter. So looking to next year, how much upside do you think the L Series would still have? If there is ample upside, where would the opportunities be emerging from is going to be new models like L5, faceless, export or further penetration into the lower tier cities in China? So that's my first question.

（解釋）所以我的第一個問題是關於潛在的成長潛力 - （聽不清楚）單位的全年目標意味著 L 系列的平均多銷量可能會在第四季度超過 53,000 輛。那麼展望明年，您認為L系列還有多少上漲空間？如果有足夠的上升空間，L5、Faceless、出口或進一步滲透到中國低線城市等新模式的機會會來自哪裡？這是我的第一個問題。

Okay. Tim, this is James. I will take your first question. And overall, we hope our sales growth next year will be twice the growth rate of RMB200,000 and higher any market. Thank you.

好的。提姆，這是詹姆斯。我將回答你的第一個問題。總體而言，我們希望明年的銷售額成長將是任何市場 20 萬元人民幣成長率的兩倍，甚至更高。謝謝。

(interpreted) My second question is about the autonomous driving. So in September, we also launched a better version of point-to-point whole senior smart driving with a judgment click. So when will such function be officially deployed in full scale, -- and in addition, is there any chance that Li Auto will launch is a cDNA function on the new Pro version with how we spec operate next year?

（解釋）我的第二個問題是關於自動駕駛的。所以在9月份，我們也推出了更好的點對點全高級智慧駕駛判斷點擊版本。那麼這樣的功能什麼時候才能正式全面部署，——另外，理想汽車明年有沒有可能在新的Pro版本上推出cDNA功能，具體操作方式如何？

(interpreted) In the past 10 months, we have went through several major iterations in our autonomous driving features. We went from reducing reliance on maps to (inaudible) and to end to end, which you've seen today. And in the meantime, people's recognition and expectations for our NOA have kept increasing. And in terms of parts parking space at One click, -- our plan is to launch it to all of you use AD Max users by the end of December of this year. And along with this launch, we will also be releasing the feature to pass all of ETC pull station automatically, which revives on our VLN model to recognize ETC pull stations so that our users can drive from highway to urban road highway through ETC toll stations without exiting NOA, which provides a more fluid user experience.

（解讀）過去10個月，我們的自動駕駛功能經歷了幾次重大迭代。我們從減少對地圖的依賴到（聽不清楚）和端到端，正如您今天看到的那樣。同時，人們對我們NOA的認可和期望也在不斷提高。至於一鍵停車位，我們的計畫是在今年 12 月底前向所有使用 AD Max 的用戶推出。伴隨著這次的推出，我們還將推出自動通過所有ETC收費站的功能，該功能在我們的VLN模型上復活，以識別ETC收費站，以便我們的用戶可以從高速公路開車通過ETC收費站到城市公路。

And in terms of whether our city NOA will be released on pro models, - and because city NOA relies on stronger perception and larger amount of computing power, the current city NOA features unfortunately won't be provided on our Pro model. As for specifics of future models and information, please stay tuned to our product launch events in the future.

至於我們的城市NOA是否會在Pro機型上發布——由於城市NOA依賴更強的感知和更大的計算能力，所以遺憾的是我們的Pro機型上不會提供目前的城市NOA功能。至於未來的具體型號和訊息，請繼續關注我們未來的產品發布會。

Bin Wang, Deutsche Bank.

王斌，德意志銀行。

(interpreted) My first question is about the new upcoming TOE products kind of what's the timing for the first product and what's the pricing range that to be? And what's your expectation for the most source volume because some of the local media reports actually will have (inaudible)6 . Can you confirm that?

（解釋）我的第一個問題是關於即將推出的新 TOE 產品，第一個產品的上市時間是什麼？您對最大來源量的期望是什麼，因為一些當地媒體報道實際上會有（聽不清楚）6 。你能證實嗎？

(interpreted) First of all, as for exact information about our launch plan, I will be releasing this information at the appropriate time in a formal product launch event because for automotive products, confidentially, LEV is quite important. And overall, we're still very confident about our best products overall. As you've seen with our L Series REV models, they have performed very strongly in the high-end new energy vehicle market. And it is also our goal to make our best SUVs, our Tier 1 players in the high-end fab market.

（解讀）首先，關於我們具體的上市計劃，我會在正式的產品發布會上適當的時候發布這個信息，因為對於汽車產品來說，LEV是非常重要的。總的來說，我們仍然對我們最好的產品充滿信心。正如您所看到的，我們的L系列REV車型在高階新能源車市場表現非常強勁。打造我們最好的SUV，打造高階晶圓廠市場的Tier 1玩家，也是我們的目標。

(interpreted) My question is about share-based compensation for the CEO. We know that previously announcements that (inaudible) units in the past 12 months we can get (inaudible) options and I know how much expense you're booking in the third quarter and how much we were going to be in the #4 quarter this year?

（解釋）我的問題是關於執行長的股權薪酬。我們知道之前宣布過去 12 個月的（聽不清楚）單位我們可以獲得（聽不清楚）選項，我知道您在第三季度預訂了多少費用以及我們在今年第四季度的費用是多少年？

This is Johnny. Regarding the CEO share-based compensation, this as of September 3, the company expects the Q4, the fourth quarter delivery plus the delivery in the first three quarters will probably meet the CEO stock performance required for the first batch of share-based compensation was which means the total delivery in the trailing 12 months, first reach over 5,000 -- so as a result, we accrue -- we recognize the share-based compensation expenses in the third quarter of RMB593 million. And there will be additional RMB42 million in the fourth quarter and and every batch of the reward, which means the next 500,000 milestone the expense will be the same as each fetch.

這是約翰尼。關於CEO股權激勵，截至9月3日，公司預計第四季、第四季交付加上前三季交付將大概滿足第一批股權激勵所需的CEO股票表現。總交付量首先超過5,000 份——因此，我們應計——我們確認第三季的股權激勵費用為人民幣5.93 億元。第四季和每批獎勵將額外增加4,200萬元人民幣，這意味著下一個50萬里程碑的費用將與每次領取相同。

Tina Hou, Goldman Sachs.

蒂娜·侯，高盛。

(interpreted) So my first question is regarding our sales policy strategy into the fourth quarter of the year. And then also in relation to that, our fourth quarter volume guidance seems to be quite conservative incremental volume in 4Q versus 3Q compared to last year. So wondering how we're thinking about the volume and the sales policy?

（解釋）所以我的第一個問題是關於我們今年第四季的銷售政策策略。與此相關的是，與去年相比，我們第四季的銷售指引似乎是第四季與第三季的增量銷售相當保守。那麼想知道我們如何考慮銷售和銷售政策？

Okay. Tina, this is James. I will take your first question. First of all, against the competition, sales of the service remains strong. Mainly due to the strengthening momentum of our brand relation with over 1 million deliveries and the rapid breakthrough of autonomous driving capabilities.

好的。蒂娜，這是詹姆斯。我將回答你的第一個問題。首先，在競爭中，服務銷售依然強勁。主要得益於我們品牌關係的增強勢頭，交付量超過100萬輛，以及自動駕駛能力的快速突破。

We are very confident about our sales in the first quarter. The competition has been intense since the beginning of this year against such tough competition, our market share has been continuously increasing.

我們對第一季的銷售非常有信心。今年以來競爭非常激烈，在如此激烈的競爭下，我們的市佔率不斷提高。

In the third quarter, our market share in the RMB200,000 and above NEV market reached 17.3%, a record high year-to-date. Meanwhile, since L6 launch is mostly delivery have exceed 25,000 units with cumulative deliveries exceeding 139,000. Li L6 is the best selling model among the new vehicles released this year. As to sales, we initiated a new round of change in the second half this year to give more operating autonomy to each region. The person in charge in each province will be responsible for overall operators, not just the sales as in the past with operating autonomy each province can run region specific sales and marketing activities according to the local market conditions, further increasing brand awareness and market share -- if we look at this region by region, the competition landscape varies for different provinces, we will formulate region-specific sales policies according to the local conditions.

第三季度，我們在20萬元及以上新能源汽車市場的市佔率達到17.3%，創下新高。同時，L6上市以來多交量已超過25,000輛，累計交車量超過139,000輛。麗L6是今年發表的新車中銷量最好的車款。在銷售方面，我們今年下半年啟動了新一輪的變革，給予各區域更多的經營自主權。各省負責人將負責整體運營，不再像過去那樣只負責銷售，擁有經營自主權，各省可以根據當地市場情況開展區域性的銷售和營銷活動，進一步提高品牌知名度和市場佔有率—— - 如果從從地區來看，不同省份的競爭格局有所不同，我們會根據當地情況制定針對該地區的銷售政策。

My second question is regarding our sales network expansion plan. So what will be our target store number by end 2024 and also by end 2025? Thank you.

我的第二個問題是關於我們的銷售網絡擴張計劃。那麼到 2024 年底和 2025 年底我們的目標商店數量是多少？謝謝。

Okay. So we expect our retail stores to reach about 500 at the end of this year. Our key channel adjustments we have been implementing this year is to gradually replaced lower performing shopping mall stores in our network with sales center in leading and autopark -- as a result, the proportion of sales centers in auto parts will increase to over 40% at the end of this year from 24% at the end of 2023. Our total display sports in China is expected to reach over 3,600 at the end of 2024 from over from over 2,600 at the end of 2023. Meanwhile, we are expanding our coverage in the third-tier cities and some key fourth and fifth tier cities in terms of sales and service networks.

好的。所以我們預計今年年底我們的零售店將達到500家左右。今年我們重點介紹的通路調整是，將網路中業績較差的商場店逐步替換為龍頭、汽車公園的銷售中心，這樣，汽車零件銷售中心的比例將提高到40%以上。我們在中國的展示運動總數將從2023 年底的2,600 多場增至2024 年底的3,600 多場。

As to the store target next year, we will share that after the first quarter earnings release. Thank you.

至於明年的門市目標，我們將在第一季財報發布後分享。謝謝。

[Jing Chang], CICC.

[張靜]，中金公司。

(interpreted) So my first question, as Mr. Li Xiang has just mentioned, so we have more and more new players to compete with us in the our EV sector. So if looking into our L Series has already been released able nearly two years. So if there are some factors that we can upgrade our products or what assets do we think can be greatly improved anyhow?

（解釋）我的第一個問題，正如李想先生剛才提到的，我們電動車領域有越來越多的新參與者與我們競爭。所以如果看看我們的L系列已經發布了近兩年了。那麼我們的產品是否有一些可以升級的因素或是我們認為哪些資產可以得到很大的提升呢？

(interpreted) The competition in the automotive industry encompasses technology, products, supply chain, sales and service. It's a holistic competition. And our UV technology is only a pretty important one among all technologies, but definitely not the whole picture. For the Li L series in the next few years, it's still considered, if you were to make an analogy to a human being, it's still in its youth stage. And after consumers buy our Li Auto vehicles, we will continue to improve our features and experience through OTAs, which improves the value of products that they receive.

（解讀）汽車產業的競爭包括技術競爭、產品競爭、供應鏈競爭、銷售競爭和服務競爭。這是一場綜合性的競爭。而我們的UV技術只是所有技術中相當重要的一項，但絕對不是全部。未來幾年的李L系列，還是考慮到，如果用人來比喻的話，還處於青年階段。當消費者購買我們的理想汽車後，我們將繼續透過OTA來改善我們的功能和體驗，從而提高他們收到的產品的價值。

So software, hardware and user experience and product this integrated experience, Li Auto is still the leader in the industry. And if we look at the next three to five years, I think the biggest variable is going to be autonomous artificial intelligence, which includes AI-powered autonomous driving and AI-powered smart assistant. It will create a completely different experience for our users, and that I consider as the beginning of real step change. And one thing I want to remind everyone, is since the beginning of 2024, the most popular and well-received automotive products in the entire world is Li L6, and that's hard results that we've seen in our stores. from launch to today in a matter of only six months, Li L6 has delivered over 139,000 units and demand is still oversupply, which requires us to expand our production facility during Spring festival in 2025.

所以軟體、硬體和使用者體驗以及產品這個綜合體驗，理想汽車仍然是行業的領導者。如果我們看未來三到五年，我認為最大的變數是自主人工智慧，包括AI驅動的自動駕駛和AI驅動的智慧助理。它將為我們的用戶創造完全不同的體驗，我認為這是真正的改變的開始。我想提醒大家的一件事是，自2024年初以來，全球最受歡迎和最受好評的汽車產品是Li L6，這是我們在商店中看到的硬成果。從上市到今天，僅僅六個月的時間，Li L6已經交付了超過139,000輛，需求仍然供過於求，這需要我們在2025年春節期間擴大生產設施。

(interpreted) So my second question is about overseas market. Do we have a more aggressive strategy to go in going overseas -- and if yes, what consolation we shall based on. Can you give us a brief plan, including which markets we should focus on how to develop the product dealership -- and if we look into 2025, whether the overseas market will be a key driver for our sales growth?

（解釋）我的第二個問題是關於海外市場的。我們是否有更積極的出海策略？ 如果有，我們應該基於什麼安慰。您能否給我們一個簡單的計劃，包括我們應該重點關注哪些市場，如何發展產品經銷——以及如果我們展望2025年，海外市場是否會成為我們銷售成長的關鍵驅動力？

Okay. This is James. And we answer your question. Absolutely, the overseas market is very important to us. Our overseas strategy is different from other automakers.

好的。這是詹姆斯。我們回答你的問題。毫無疑問，海外市場對我們來說非常重要。我們的海外策略與其他汽車製造商不同。

As of now, we have established a service the servicing networks in several countries and regions such as (inaudible). These servicing stores also helped us expand our market share in the overseas market. Regarding the choice of the overseas region, the Middle East and Central Asia will be our first target regions. Building on this, we will continuously explore and evaluate other markets with high growth potential to expand our global footprint. However, we are not considering entering Western Europe and North America for the time being.

截至目前，我們已在（聽不清楚）等多個國家和地區建立了服務服務網絡。這些服務店也幫助我們擴大了海外市場的市佔率。在海外區域的選擇上，中東和中亞將是我們的首要目標區域。在此基礎上，我們將不斷探索和評估其他具有高成長潛力的市場，以擴大我們的全球足跡。不過，我們暫時不考慮進入西歐和北美。

Thank you.

謝謝。

Ming Hsun Lee, BofA.

李明勳，美國銀行。

(interpreted) So in October 2024, Li Auto officially OTA, the end-to-end, latest AD Max functions. And how does the user experience improved feel so far? And year-to-date, do you see significant sales mix change for your AD Max version?

（解讀）於2024年10月，理想汽車正式OTA，端到端的，最新的AD Max功能。到目前為止，使用者體驗的改善感覺如何？今年迄今為止，您是否發現 AD Max 版本的銷售組合發生了重大變化？

(interpreted) Since we launched what we call end-to-end BLM automomous driving functionality, we view autonomous driving no longer as a feature city and and highway way. So more as a capability, the ability to offer supervised autonomous driving. And that marks the change from rule-based algorithm to real AI model-driven algorithms. And for users, the values are pretty significant. I'll give a few examples.

（解釋）自從我們推出了所謂的端到端 BLM 自動駕駛功能以來，我們認為自動駕駛不再是城市和高速公路的特色。因此，更多的是一種能力，提供監督自動駕駛的能力。這標誌著從基於規則的演算法到真正的人工智慧模型驅動演算法的轉變。對用戶來說，這些價值非常重要。我舉幾個例子。

First of all, in NPI, what we call miles per intervention have increased very steadily as we increase the amount of training model parameters and training data and the increase is actually very perfectly into scaling law, which means companies with high-quality training data will have a significant competitive advantage in the future. in this industry in the future.

首先，在NPI中，隨著我們訓練模型參數和訓練資料量的增加，我們所說的每次幹預的里程數已經非常穩定地增加，而且這種增加實際上非常完美地符合縮放定律，這意味著擁有高品質訓練資料的公司將未來具有顯著的競爭優勢。未來在這個行業。

Second example I want to give is MPA, which is miles per accident have also been increasing steadily. My estimate is that with this current end-to-end version, the MPA is going to be 35 times compared to human drivers. And lastly, as we increased the big model capability. Our active safety features like AEB and AS have also been improving very significantly. The number of severe accidents have dropped dramatically.

我想舉的第二個例子是MPA，即每次事故的里程數也穩定增加。我估計，在目前的端到端版本中，MPA 的速度將是人類駕駛者的 35 倍。最後，我們增加了大模型功能。我們的 AEB 和 AS 等主動安全功能也得到了顯著改善。嚴重事故數大幅下降。

And in terms of sales take rate, AD MAX take has steadily increased, not only for cars priced over 300,000. But also for the DL6, we have seen a very dramatic increase in AD Max take rate.

而從銷售來看，AD MAX 的銷售量穩定上升，不僅是30萬以上的車款。而且對於 DL6，我們也看到 AD Max 拍攝率有了非常顯著的提升。

(interpreted) So what's our plan for the charging station by the end of next year. And what is your current breakdown for your own building charging station and also the charging station by the third party. And right now, what is the utilization especially since you have so many charging stations, but your -- the BEV backup total population is still not high. Does this mean that many other brands use your charging brands. So your charging station did not impact your gross margin?

（解釋）那麼到明年年底我們對充電站的計畫是什麼？您自己的充電站和第三方充電站目前的故障狀況是如何的？現在，利用率是多少，特別是因為你有這麼多充電站，但你的——BEV 備用總人口仍然不高。這是否意味著許多其他品牌都在使用你的充電品牌。那麼您的充電站沒有影響您的毛利率嗎？

Okay. This is James. I will take your question. So overall, we plan to establish the industry's largest OEM charging network and have been absolutely before our new BEV models come to market, we expect to have more charging stations than Tesla in key cities for sales. By the time our new BEV model launches, we target to have more than 2,000 charging stations in operation which will scale up to 4,000 by the end of 2025 next year.

好的。這是詹姆斯。我會回答你的問題。所以總體來說，我們計劃建立行業最大的OEM充電網絡，並且絕對在我們的新BEV車型上市之前，我們預計在重點銷售城市擁有比特斯拉更多的充電站。到我們推出新的純電動車車型時，我們的目標是營運超過 2,000 個充電站，到明年 2025 年底將增加至 4,000 個。

Our supercharging station network now covers nine national highways total of over 54,000 kilometers with a coverage ratio of 63% of national highway trunk lines. By the end of 2025, we will build more than 1,200 supercharging stations along highways covering 90% of national high risk. And in addition to highway and urban coverage, we will also selectively cover medium and non distilled self-driving route to meet the lead our users for family travel. For instance, our month average supercharging station commerce the operation in October this year, and we expect to achieve end-to-end coverage to national highway, the national highway 318 in April next year. And also regarding the cooperative supercharging station in the city -- so far, we have already built more than 500, and we are expecting by end of next year, we will also have this cooperative supercharge station in city more than 3,000.

充電站網路現已覆蓋9條國道，總里程超過5.4萬公里，覆蓋率達到國道幹線的63%。至2025年底，沿線建設充電站1,200個以上，覆蓋全國90%的高風險地區。而且除了高速公路和城市覆蓋範圍外，我們還將選擇性地覆蓋中型和非蒸餾型自駕路線，以滿足我們家庭出行的主導用戶。例如我們的月均超級充電站今年10月就已經投入運營，預計明年4月份就可以實現對國道、318國道的端到端覆蓋。還有在城市裡的合作充電站，到目前為止，我們已經建造了500多個，預計到明年年底，我們在城市裡的合作充電站也將超過3000個。

Thank you.

謝謝。

Yuqian Ding, HSBC.

丁宇謙，匯豐銀行。

(interpreted) The first question is about the consolidation for the pricing category above RMB200,000. We discussed that at the beginning of the year in the industry consolidation shaping the way as management expected. How do we take the competition coming from the mass market brands high-end model and tech brands all to line up.

（解讀）第一個問題是關於20萬元以上定價品類的合併問題。我們在年初討論了產業整合的塑造方式正如管理層所預期的那樣。我們如何應對大眾市場品牌、高階車型和科技品牌的競爭。

Today, even before we launch our pure electric SUVs, we have been increasing our market share very steadily every quarter and it has reached 17.3% in Q3. And for the longest time, no matter who enters the market, the fundamental challenge is the same for everyone. Can we offer products that provides the most value for our target users in their respective price range. That's the key to everything. And our long-term goal is still to -- through our BEV and REV products together capture over 25% of market share in the NEV market over RMB200,000.

如今，在我們推出純電動SUV之前，我們每季的市佔率都在非常穩定地成長，第三季已達到17.3%。長期以來，無論誰進入市場，每個人面臨的根本挑戰都是相同的。我們能否提供在各自價格範圍內為目標用戶提供最大價值的產品？這是一切的關鍵。我們的長期目標仍然是－透過我們的BEV和REV產品合計佔據20萬元以上新能源汽車市場25%以上的市場。

(interpreted) The second question is on the segment and boundary. We noticed there's more model supply among the mid- to larger size, the family, utility, SUV and MPV. Will the company management see the boundary limits for the current segment or will family use the market saturated to a certain extent, which are the other segments that the company would identify promising ?

（解釋）第二個問題是關於線段和邊界的。我們注意到中大型車、家庭車、實用車、SUV 和 MPV 的車型供應量增加。公司管理階層是否會看到目前細分市場的邊界限制，或者家庭使用市場是否會飽和到一定程度，公司認為還有哪些其他細分市場有前景？

(interpreted) My view is that we've only started scratch the surface in terms of family users market, especially if you take into account the power of AI changes that will be powered by AI in terms of autonomous driving and smart cockpit experience. There's going to be so much room for imagination for family users. So in this regard, we're not in a rush for new markets. And the other opportunity is in pure electric or best market. If you look at the market of that products over RMB300,000, there is no product that offers the equivalent or comparable product value to L7, L8 and L9.

（解釋）我的觀點是，我們在家庭用戶市場方面才剛開始觸及表面，特別是如果你考慮到人工智慧變革的力量，這些變革將由人工智慧在自動駕駛和智慧座艙體驗方面提供動力。對於家庭用戶來說將會有很大的想像空間。所以在這方面，我們並不急於開拓新市場。另一個機會是純電動或最好的市場。若放眼30萬以上的產品市場，沒有任何產品能提供與L7、L8、L9同等或可比較的產品價值。

So there's simply no good supply, and we believe that's another big opportunity for us. So whether it's AI or fab market, we think there's a big opportunities in terms of large SUVs for family users. So this is something we will continue to explore before we look at other potential markets or niche markets and an analogy would be, we actually have a golden bull in our hands, and we shouldn't be bagging with the Golden ball.

因此，根本沒有良好的供應，我們相信這對我們來說是另一個巨大的機會。所以無論是AI還是晶圓廠市場，我們認為家庭用戶的大型SUV都有很大的機會。因此，在我們考慮其他潛在市場或利基市場之前，我們將繼續探索這一點，打個比方，我們實際上手裡有一頭金牛，我們不應該拿著金球裝袋。

Your next question comes from (inaudible) with Citic.

你的下一個問題來自（聽不清楚）中信集團。

(interpreted) My first question is about self-driving. So could you give us some interaction about progress and plans in the field of (inaudible) with the speed of self-driving iteration slowdown in the long term and will add them potentially lead to a narrowing difference between companies' technology?

（解釋）我的第一個問題是關於自動駕駛的。那麼，您能否就（聽不清楚）領域的進展和計劃與我們進行一些互動，從長遠來看，自動駕駛迭代速度會放緩，並且將它們添加到公司技術之間可能會縮小差異？

(interpreted) Our current direction is to use to iterate on supervised autonomous driving and provide parking to parking autonomous driving experience and completely seamless user experience. In the meantime, we are innovating in terms of human vehicle interaction when it comes to supervise autonomous driving. And we are currently running through some internal tests, and we will be releasing these to all of our users in the near term and look at the long term, we also already launched primary research on L4 autonomous driving. And it builds on top of our current end-to-end BLM model and we are looking into reinforced learning systems that combines VLE models on the car side and world model on the cloud side.

（解讀）我們目前的方向是用迭代監督自動駕駛，提供停車到停車的自動駕駛體驗和完全無縫的使用者體驗。同時，在監管自動駕駛方面，我們正在人車互動方面進行創新。目前我們正在進行一些內部測試，短期內我們會向所有用戶發布這些測試，從長遠來看，我們也已經啟動了L4級自動駕駛的初步研究。它建立在我們目前的端對端 BLM 模型之上，我們正​​在研究將汽車端的 VLE 模型和雲端的世界模型結合起來的強化學習系統。

And in the meantime, we will continue to invest in infrastructure and to sustain our leadership in computing power as well as comms driving mileage. And finally, in terms of autonomous driving capability and the gap between different players, I don't think it will narrow. But in fact, I think it will widen over time. And the reason for that is because first of all, the requirement for car side and cloud side computing power requirement for training data and resource investment is continue to be very large and has trend to increase. And there's also a higher requirement on the algorithm capabilities for autonomous driving.

同時，我們將繼續投資基礎設施，維持我們在運算能力和通訊里程方面的領先地位。最後，在自動駕駛能力和不同參與者之間的差距方面，我認為不會縮小。但事實上，我認為隨著時間的推移，它會擴大。究其原因，首先是因為車端和雲端對訓練資料和資源投入的算力需求仍然很大，而且有增加的趨勢。而且自動駕駛對演算法能力也提出了更高的要求。

So overall, I think the gap will widen.

總體而言，我認為差距將會擴大。

So my second question is about the future cost reduction. As we know that with our increasing sales, so how do we look future cost reduction including procurement, technology, depreciation and other aspects ?

所以我的第二個問題是關於未來成本的降低。我們知道，隨著我們的銷售量不斷增加，那麼我們如何看待未來包括採購、技術、折舊等方面的成本降低？

(interpreted) First, overall, we will look at the full value chain end to end to find opportunities to increase efficiency and lower cost. -- which includes technology innovation, economy scale in procurement and reducing quality-related waste and also includes working with our partners to increase their capacity utilization, more efficient logistics. All these require very detailed and very skillful operations. And to give an example in terms of technology innovation, it is a key to driving lower cost over the long term. For example, with our REV system and our electric drive system, if we could integrate them and integrate the central control unit.

（解釋）首先，整體而言，我們將端到端地審視整個價值鏈，尋找提高效率和降低成本的機會。 ——其中包括技術創新、採購的經濟規模和減少與品質相關的浪費，還包括與我們的合作夥伴合作提高產能利用率、提高物流效率。這些都需要非常細緻、非常熟練的操作。舉一個技術創新的例子，從長遠來看，它是降低成本的關鍵。比如說我們的REV系統和我們的電力驅動系統，如果我們能夠把它們整合起來，整合中央控制單元。

It will not only make our products more competitive, but also like our costs more competitive. On the supplier end, -- we are building a joint innovation platform with the supplier so that our suppliers can get involved much earlier.

它不僅使我們的產品更具競爭力，而且使我們的成本更具競爭力。在供應商方面，我們正在與供應商建立一個聯合創新平台，以便我們的供應商可以更早參與。

We can work together to find better solutions in terms of designs and processes to find opportunities for lowering cost. Also in working with suppliers, our value has always been a win-win philosophy because only this is beneficial to the long-term development of the industry. On the other hand, we will design our parts so that they share the same platform, and we enlarge the volume of each product, which we call hit products.

我們可以共同努力，在設計和工藝方面找到更好的解決方案，找到降低成本的機會。同樣在與供應商的合作中，我們的價值觀始終是雙贏的理念，因為只有這樣才有利於產業的長期發展。另一方面，我們會設計我們的零件，使它們共享同一個平台，並擴大每個產品的體積，我們稱之為熱門產品。

And in terms of supplier strategy, our strategy has been to concentrate the volume on a smaller number of suppliers increase their capacity utilization and drive cost down over the long term. And lastly, we will continue to leverage digitization, smart technologies on our factories as well as to empower our partners to reduce waste in the manufacturing process, increased running rate for online rate of equipment to drive down costs over the long term.

在供應商策略方面，我們的策略是將銷售量集中在少數供應商身上，提高產能利用率，並從長遠來看降低成本。最後，我們將繼續在工廠中利用數位化、智慧技術，並幫助我們的合作夥伴減少製造過程中的浪費，提高設備在線率的運作率，以長期降低成本。

As we are reaching the end of our conference call now, I'd like to turn the call back over to the company for closing remarks. Ms. Janet Zhang, please go ahead.

由於我們的電話會議即將結束，我想將電話轉回公司進行結束語。張女士，請講。

Thank you once again for joining us today. If you have further questions, please feel free to contact Li Auto's Investor Relations team through the contact information provided on our website. This concludes this conference call. You may now disconnect your lines. Thank you.

再次感謝您今天加入我們。如果您還有其他疑問，請隨時透過我們網站上提供的聯絡方式聯繫理想汽車的投資者關係團隊。本次電話會議到此結束。現在您可以斷開線路。謝謝。

Portions of this transcript that are marked (interpreted) were spoken by an interpreter present on the live call. The interpreter was provided by the company sponsoring this event.

此文字記錄中標記（翻譯）的部分是由現場通話中的口譯員說出的。口譯員由贊助本次活動的公司提供。