理想汽車 (LI) 2021 Q2 法說會逐字稿

Hello, ladies and gentlemen. Thank you for standing by for Li Auto's Second Quarter of 2021 Earnings conference call. (Operator instructions). Today's conference call is being recorded. I will now turn the call over to your host, Janet Zhang, Director of Investor Relations of the Company. Please go ahead, Janet.

女士們，先生們，您好。感謝您耐心等待理想汽車2021年二季度財報電話會議。 （操作員說明）。今天的電話會議正在錄製中。我現在將把電話轉給你的主持人，公司投資者關係總監 Janet Zhang。請繼續，珍妮特。

Thank you, Annie. Good evening and good morning everyone. Welcome to Li Auto's Second Quarter 2021 Earnings conference call. The Company's financial and operating results were published in the press release earlier today and are posted on the Company's IR website.

謝謝你，安妮。大家晚上好，早上好。歡迎來到理想汽車 2021 年第二季度財報電話會議。公司的財務和經營業績已在今天早些時候的新聞稿中發布，並發佈在公司的 IR 網站上。

On today's call, we have our President, Mr. Kevin Yanan Shen, and our CFO, Mr. Johnny Tie Li, to begin with prepared remarks. Our founder and CEO, Xiang Li, and our CTO, Mr. Kai Wang, will join for the Q&A discussion.

在今天的電話會議上，我們的總裁 Kevin Yanan Shen 先生和我們的首席財務官 Johnny Tie Li 先生首先準備好的發言。我們的創始人兼首席執行官李翔和我們的首席技術官王凱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 expressed today. Further information regarding risks and uncertainties is included in certain filings of the Company with the US Securities and Exchange Commission and announcement published on the website of the Hong Kong Stock Exchange and the Company. 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作出的前瞻性陳述。前瞻性陳述涉及固有的風險和不確定性。因此，公司的實際結果可能與今天表達的觀點存在重大差異。有關風險和不確定性的更多信息包含在公司向美國證券交易委員會提交的某些文件以及在香港聯交所和公司網站上發布的公告中。除非適用法律要求，否則公司不承擔任何更新任何前瞻性陳述的義務。

Please also note that Li Auto's earnings press release and this conference call include discussions of unaudited GAAP financial information as well as unaudited non-GAAP financial measures. Please refer to Li Auto's press release and interim results announcement which contains a reconciliation of the unaudited non-GAAP measures to comparable GAAP measures. With that, I will now turn the call over to our President. Please go ahead, Kevin.

另請注意，理想汽車的收益新聞稿和本次電話會議包括對未經審計的 GAAP 財務信息以及未經審計的非 GAAP 財務指標的討論。請參閱理想汽車的新聞稿和中期業績公告，其中包含未經審計的非 GAAP 指標與可比 GAAP 指標的調節。有了這個，我現在將把電話轉給我們的總統。請繼續，凱文。

Thank you, Janet. Hello, everyone, and thank you for joining our call today. First of all, we are proud that our Class A ordinary shares started trading on the main board of the Hong Kong Stock Exchange on August 12, opening a new chapter for our Company. We are honored and also humbled by the support we received from all investors.

謝謝你，珍妮特。大家好，感謝您今天加入我們的電話會議。首先，我們感到自豪的是，我們的 A 類普通股於 8 月 12 日在香港聯合交易所主板開始交易，為我們的公司開啟了新的篇章。我們對所有投資者的支持感到榮幸和謙卑。

With the Hong Kong dual primary listing, we significantly strengthened our equity base with over US$1.5 billion of net proceeds raised. This will provide strong financial support for our R&D initiatives and the direct sales and servicing network expansion, as well as enhanced protection for our shareholders.

通過在香港雙重主要上市，我們顯著加強了我們的股權基礎，募集資金淨額超過 15 億美元。這將為我們的研發計劃、直銷和服務網絡擴展提供強大的財務支持，並加強對股東的保護。

We will continue to take the responsibilities associated with being a publicly traded company seriously, work to build out our long-term vision and create value for our users, shareholders and our employees alike.

我們將繼續認真對待與上市公司相關的責任，努力構建我們的長期願景，為我們的用戶、股東和員工創造價值。

Next, moving to the key highlights of our second quarter result. Our 2021 Li ONE has been an exceptional performer since its debut on May 25. Our 2021 Li ONE boosts and enhanced the NEDC range of 1080 kilometers, optimized the mobility comfort, and a more intelligent cockpit. It has received rave reviews and strong user endorsement for its outstanding feature and performance.

接下來，轉向我們第二季度業績的主要亮點。我們的2021 Li ONE自5月25日首次亮相以來一直表現出色。我們的2021 Li ONE提升並增強了1080公里的NEDC續航里程，優化了移動舒適性以及更智能的座艙。它以其出色的功能和性能獲得了好評如潮和強烈的用戶認可。

Our second quarter deliveries achieved 17,575 units, increasing 166% year over year. Our July deliveries reached 8,589, hitting a new record. In July, Li ONE topped sales charts in the new energy SUV and the large SUV categories, according to new car insurance registration data reported by China Automotive Technology and the Research Center. It is a powerful testament to Li ONE's highly competitive product features, making us a leading domestic [EV] manufacturer in China.

我們第二季度的交付量達到 17,575 台，同比增長 166%。我們 7 月份的交付量達到 8,589 輛，創下新紀錄。根據中國汽車技術研究中心發布的新車保險登記數據顯示，7月，理想在新能源SUV和大型SUV類別銷量榜上名列前茅。它有力地證明了立一的極具競爭力的產品特性，使我們成為中國領先的國產 [EV] 製造商。

While these rankings and the Li ONE's strong performance and popularity are exciting achievements, yesterday's home run do not win today's game. We will continue to be disciplined and dedicated and we will strive to constantly surpass ourselves in products and services to earn the support, trust and the loyalty from our users. Our record high deliveries would not have been possible without the cooperation and the assistance of our supply chain partners. They have been helping us navigate the ongoing semiconductor shortages.

雖然這些排名和 Li ONE 的強勁表現和人氣都是令人興奮的成就，但昨天的本壘打並沒有贏得今天的比賽。我們將繼續自律敬業，努力在產品和服務上不斷超越自我，贏得用戶的支持、信任和忠誠。如果沒有我們供應鏈合作夥伴的合作和協助，我們不可能實現創紀錄的交付量。他們一直在幫助我們解決持續的半導體短缺問題。

Turning to the profitability, our gross margin reached 18.9% this quarter, up 5.6 percent points year over year, and 1.6% quarter over quarter. Our operating cash flow was RMB1.4 billion or $218 million during the second quarter, demonstrating our consistent high operating capability.

談到盈利能力，本季度我們的毛利率達到 18.9%，同比增長 5.6 個百分點，環比增長 1.6%。第二季度，我們的經營現金流為人民幣 14 億元或 2.18 億美元，展示了我們一貫的高運營能力。

In the second quarter, we aimed to further broaden and deepen city coverage to address increasing demand from prospective users across China and prepare ourselves for our new model launches in 2022 and beyond. Thus, we accelerated the expansion of our direct sales and servicing network. As of July 31, 2021, we had 109 retail stores covering 67 cities and 176 servicing centers and the Li Auto authorized body and paint shops operating in 134 cities. We are on track to reach our year-end target of 200 retail stores. We have expanded our footprint through lower tier cities in China.

在第二季度，我們的目標是進一步擴大和深化城市覆蓋範圍，以滿足中國潛在用戶日益增長的需求，並為 2022 年及以後的新車型發布做好準備。因此，我們加快了直銷和服務網絡的擴張。截至2021年7月31日，我們擁有覆蓋67個城市的109家零售店和176個服務中心，以及在134個城市運營的理想汽車授權車身和噴漆店。我們有望實現 200 家零售店的年終目標。我們通過中國的低線城市擴大了我們的足跡。

In August, we opened a retail store in Lhasa, Tibet. This has taken our direct sales and servicing network geographical coverage of provinces, autonomous regions and centrally administered municipalities in mainland China to 100%.

八月，我們在西藏拉薩開了一家零售店。這使我們在中國大陸各省、自治區和直轄市的直銷和服務網絡地理覆蓋率達到100%。

The industry-wide semiconductor shortage has affected our monthly deliveries in recent months, resulting in undelivered backlogs as our new order exceeded 10,000 in June. We tried our best to utilize alternative solutions to enhance our flexibility and acquire industry sources. Going forward, we'll continue to collaborate closely with our supply chain partners to mitigate the semiconductor shortage and minimize the impact on our production.

整個行業的半導體短缺影響了我們近幾個月的月度交貨，導致我們在 6 月份的新訂單超過 10,000 件時出現積壓。我們盡力利用替代解決方案來增強我們的靈活性並獲取行業資源。展望未來，我們將繼續與我們的供應鏈合作夥伴密切合作，以緩解半導體短缺並將對我們生產的影響降至最低。

Given the proven success of our Li ONE catering to the needs of families, we are working to diversify our product portfolio to appeal to an even broader family user base. We have three platforms under development - the X platform for our next generation EREV with the first model to be released in 2022 and the Whale and the Shark platform for our BEV models to be launched in 2023. The development of these new platforms are progressing smoothly and we are confident to launch new vehicle models on time.

鑑於我們的 Li ONE 在滿足家庭需求方面取得的成功，我們正在努力豐富我們的產品組合，以吸引更廣泛的家庭用戶群。我們正在開發三個平台——用於我們下一代 EREV 的 X 平台，首款車型將於 2022 年發布，用於我們的 BEV 車型的 Whale 和 Shark 平台將於 2023 年推出。這些新平台的開發進展順利我們有信心按時推出新車型。

In July, we also signed an MOU with a local company for collaboration in reconstruction and expansion project of an automobile manufacturing plant in Beijing. This will further extend our production capacity and support increasing vehicle sales volume with future models.

7月，我們還與當地一家公司簽署了合作備忘錄，合作進行北京某汽車製造廠的改擴建項目。這將進一步擴大我們的生產能力，並支持增加未來車型的汽車銷量。

On August 27, 2021, we also signed an investment agreement with a wholly owned subsidiary of Xinchen China Power Holding Limited to form a new company in Mianyang, Sichuan Province, China, to develop and manufacture our next generation range extension system. We firmly believe that smart EREVs will be a superior replacement to ICEV vehicles and the increased overall EREV penetration rate in the medium to long term. We continue to view it as one of our core strategic development directions. The cooperation will leverage the R&D and the production capabilities of both companies to provide high quality products and further extend the market share of smart EREVs in the domestic market.

2021 年 8 月 27 日，我們還與新晨中國電力控股有限公司的全資子公司簽署了一項投資協議，在中國四川省綿陽成立一家新公司，以開發和製造我們的下一代增程系統。我們堅信，智能 EREV 將成為 ICEV 車輛的卓越替代品，並在中長期內提高 EREV 的整體滲透率。我們繼續將其視為我們的核心戰略發展方向之一。此次合作將充分發揮雙方的研發和生產能力，提供優質產品，進一步擴大智能增程汽車在國內市場的份額。

With respect to international market, we will keep our strategy to always make plans before taking actions as we want to be a winner, not just a mere participant in the global market. To win market share overseas, a car company has to develop the right product to attract customer with tastes and requirements that are different from domestic customers. We have set up a team dedicated to the overseas market, and we are meticulously working on the plans to find a winning formula.

在國際市場方面，我們將堅持先謀後行動的戰略，我們要成為贏家，而不僅僅是全球市場的參與者。為了贏得海外市場份額，汽車公司必須開發合適的產品來吸引具有與國內客戶不同的品味和要求的客戶。我們已經成立了一個專門負責海外市場的團隊，我們正在精心製定計劃，尋找制勝法寶。

As a corporate citizen, we are proud to have passionately engaged in social relief activities to help people in need. In July, in response to the floods in Henan Province, we organized the emergency relief with donations to support the affected people, including our users. We also mobilized [all trailers] we have access in the adjacent provinces to join the rescue efforts.

作為企業公民，我們很自豪能夠熱心參與社會救助活動，幫助有需要的人。 7月，為應對河南省洪澇災害，我們組織了緊急捐款救助，支持包括我們用戶在內的受災群眾。我們還動員了我們在鄰近省份可以進入的[所有拖車]加入救援工作。

In addition, we provide our users with service such as warranty extension for replacement parts, free replacement of flood-damaged charging poles and free vehicle inspections for all disaster-stricken vehicles. We made our effort to reassure them and help in any way possible for a smooth transition back to normalcy.

此外，我們還為用戶提供配件延保、免費更換被水淹充電樁、所有受災車輛免費驗車等服務。我們努力安撫他們，並以任何可能的方式幫助他們順利過渡到正常狀態。

Lastly, we achieved a AA MSCI ESG rating in April, making us a leader in ESG among 40 rated automotive companies. Going forward, we will continue to undertake social responsibilities, and build this as an integral part of our vision to build smart electric vehicles that make families happier. Now, I will turn this call over to our CFO, Mr. Tie Li, to review our financial performance in the second quarter.

最後，我們在 4 月獲得了 AA MSCI ESG 評級，使我們在 40 家評級汽車公司中成為 ESG 方面的領導者。未來，我們將繼續承擔社會責任，並將此作為我們打造智能電動汽車，讓家庭更幸福的願景的組成部分。現在，我將把這個電話轉交給我們的首席財務官李鐵先生，以審查我們第二季度的財務業績。

Thank you, Kevin. Hello, everyone. I will now walk you through some of our financial results for the second quarter of 2021. Due to the time constraints, I will address our financial highlights here, and I encourage you to refer to our earnings press release for further details.

謝謝你，凱文。大家好。我現在將向您介紹我們 2021 年第二季度的一些財務業績。由於時間有限，我將在這裡介紹我們的財務重點，我鼓勵您參閱我們的收益新聞稿以了解更多詳細信息。

Total revenues in the second quarter of 2021 were RMB5.04 billion, or US$780.4 million, representing an increase of 40.7% (sic - see press release "40.9%) from RMB3.58 billion in the first quarter of 2021. This included RMB4.9 billion, or US$759.4 million from vehicle sales, which increased 41.6% quarter over quarter. This increase in vehicle sales was mainly driven by the increase in delivery of the 2021 Li ONE since its release on 25 May 2021.

2021 年第二季度的總收入為人民幣 50.4 億元，即 7.804 億美元，較 2021 年第一季度的人民幣 35.8 億元增長 40.7%（原文如此 - 參見新聞稿“40.9%”）。其中包括人民幣 4 9 億美元，即 7.594 億美元的汽車銷售額，環比增長 41.6%。汽車銷售額的增長主要是由於 2021 Li ONE 自 2021 年 5 月 25 日發布以來交付量的增加。

Revenues from other sales and services were RMB135.7 million or US$21 million in the second quarter of 2021, representing an increase of 21.7% quarter over quarter. The increase in revenue from other sales and services over the first quarter was mainly due to the increased sales of charging stalls, accessories and services in line with higher accumulated vehicle sales.

2021 年第二季度其他銷售和服務收入為人民幣 1.357 億元或 2100 萬美元，環比增長 21.7%。第一季度其他銷售和服務收入的增加主要是由於隨著累計汽車銷量的增加，充電樁、配件和服務的銷售額增加。

Cost of sales in the second quarter was RMB4.09 billion, or US$632.9 million, representing an increase of 38.2% quarter over quarter. Gross profit in the second quarter of 2021 was RMB952.8 million, or US$147.6 million, growing 54.5% compared with the first quarter of 2021.

第二季度銷售成本為人民幣 40.9 億元，或 6.329 億美元，環比增長 38.2%。 2021 年第二季度毛利為 9.528 億元人民幣（1.476 億美元），比 2021 年第一季度增長 54.5%。

Vehicle margin in the second quarter was 18.7%, compared with 16.9% in the first quarter of 2021. The increase in vehicle margin from the first quarter was primarily driven by higher average selling price in the second quarter of 2021, due to our launch of the 2021 Li ONE in late May.

第二季度的汽車利潤率為 18.7%，而 2021 年第一季度為 16.9%。與第一季度相比，汽車利潤率的增長主要是由於 2021 年第二季度平均售價較高，這是由於我們推出了5月下旬的2021 Li ONE。

Gross margin in the second quarter of 2021 was 18.9%, compared to 17.3% in the first quarter of 2021, which was mainly attributable to the increase of vehicle margins.

2021 年第二季度的毛利率為 18.9%，而 2021 年第一季度為 17.3%，這主要歸因於汽車利潤率的增加。

Operating expenses in the second quarter of 2021 were RMB1.49 billion, or US$230.6 million, representing an increase of 45.3% quarter over quarter. Research and development expenses in the second quarter of 2021 were RMB653.4 million, or US$101.2 million, representing an increase of 27% quarter over quarter.

2021 年第二季度的營業費用為人民幣 14.9 億元，或 2.306 億美元，環比增長 45.3%。 2021 年第二季度的研發費用為 6.534 億元人民幣（1.012 億美元），環比增長 27%。

Excluding share-based compensation expenses, non-GAAP research and development expenses were RMB543.7 million, or US$84.2 million, increasing 36.6% quarter over quarter. The increase in research and development expenses over the first quarter of 2021 was primarily attributable to the increased headcount, and the increased research and development activities for the Company's future vehicle models.

不計入股權激勵費用，非美國通用會計準則研發費用為人民幣 5.437 億元，即 8,420 萬美元，環比增長 36.6%。研發費用較 2021 年第一季度增加的主要原因是員工人數增加，以及公司未來車型的研發活動增加。

Selling, general and administrative expenses in the second quarter of 2021 were RMB835.3 million, or US$129.4 million, representing an increase of 63.8% quarter over quarter. Excluding share-based compensation expenses, non-GAAP selling, general and administrative expenses were RMB780.9 million, or US$120.9 million, increasing 73.6% quarter over quarter. The increase over the first quarter of 2021 was primarily driven by increased marketing and promotional activities, as well as increased headcount and rental expenses with the expansion of the Company's distribution network.

2021 年第二季度的銷售、一般和管理費用為人民幣 8.353 億元，即 1.294 億美元，環比增長 63.8%。不計入股權激勵費用，非美國通用會計準則銷售、一般和管理費用為人民幣 7.809 億元，或 1.209 億美元，環比增長 73.6%。與 2021 年第一季度相比的增長主要是由於營銷和促銷活動的增加，以及隨著公司分銷網絡的擴張而增加的員工人數和租金費用。

Loss from operations in the second quarter of 2021 was RMB535.9 million, or US$83 million, representing an increase of 31.4% compared with the first quarter. Excluding share-based compensation expenses, the non-GAAP loss from operations was RMB365.5 million, or US$56.6 million, representing an increase of 62.6% quarter over quarter.

2021 年第二季度的經營虧損為人民幣 5.359 億元（8300 萬美元），較第一季度增長 31.4%。不計入股權激勵費用，非美國通用會計準則運營虧損為人民幣 3.655 億元，即 5660 萬美元，環比增長 62.6%。

Net loss was RMB235.5 million, or US$36.5 million in the second quarter of 2021, compared with RMB360 million net loss in the first quarter of 2021. Non-GAAP net loss was RMB65.1 million, or US$10.1 million in the second quarter of 2021, compared with RMB177 million net loss in the first quarter of 2021.

2021 年第二季度淨虧損為人民幣 2.355 億元，即 3650 萬美元，而 2021 年第一季度為淨虧損人民幣 3.6 億元。第二季度非美國通用會計準則淨虧損為人民幣 6510 萬元，即 1010 萬美元2021 年第一季度淨虧損 1.77 億元人民幣。

Turning to our balance sheet and cash flow, our cash and cash equivalents, restricted cash, time deposits and short-term investments total RMB36.53 billion, or US$5.66 billion as of 30 June 2021. Operating cash flow in the second quarter of 2021 was RMB1.41 billion, or US$218 million. Free cash flow was RMB982.1 million, or US$152.1 million in the second quarter.

談到我們的資產負債表和現金流，截至 2021 年 6 月 30 日，我們的現金和現金等價物、受限制的現金、定期存款和短期投資總計人民幣 365.3 億元，或 56.6 億美元。2021 年第二季度的經營現金流為人民幣 14.1 億元，或 2.18 億美元。第二季度自由現金流為人民幣 9.821 億元，合 1.521 億美元。

Now for our business outlook. For the third quarter of 2021, the Company expects deliveries to be between 25,000 and 26,000 vehicles, representing an increase of approximately 188.7% to 200.2% from the third quarter of 2022 (sic - see press release, "2020").

現在是我們的業務前景。對於 2021 年第三季度，公司預計交付量將在 25,000 至 26,000 輛之間，比 2022 年第三季度增長約 188.7% 至 200.2%（原文——參見新聞稿，“2020”）。

The Company also expects the third quarter total revenue to be between RMB6.98 billion and RMB7.25 billion, or US$1.08 billion and US$1.12 billion, representing an increase of 177.8% to 188.9% from the third quarter of 2022 (sic - see press release, "2020").

公司還預計第三季度總收入將在人民幣 69.8 億元至人民幣 72.5 億元之間，即 10.8 億美元至 11.2 億美元，較 2022 年第三季度增長 177.8% 至 188.9%（原文如此 - 見新聞稿，“2020”）。

This business outlook reflects the Company's current and preliminary view on the business situation and market condition, in particular, the ongoing industry-wide semiconductor shortage due to the global COVID-19 pandemic, which are all subject to change. I will now turn the call to the operator to facilitate our Q&A session. Thank you.

該業務展望反映了公司對業務狀況和市場狀況的當前和初步看法，特別是由於全球 COVID-19 大流行導致全行業半導體持續短缺，這些都可能發生變化。我現在將把電話轉給接線員，以方便我們的問答環節。謝謝你。

Thank you. (Operator Instructions) The first question is from the line of Fei Fang of Goldman Sachs. Your line is open, please go ahead.

謝謝你。 （操作員說明）第一個問題來自高盛的方飛。您的線路已開通，請繼續。

Great, thanks for the opportunity, congratulations on the results. Can management talk a little bit about competition and regulation? On competition, some of your incumbent peers have really sped up launching new products, Great Wall, Geely, BYD, for instance. The frequency of their launches has increased, and the hit rate seems to also increase. I just wonder if you have refreshed thoughts on their progress, and also, the potential for them to enter into the premium segment. That's the first question.

太好了，感謝機會，祝賀結果。管理層能否談談競爭和監管？在競爭方面，你的一些現有同行確實加快了推出新產品的速度，例如長城、吉利、比亞迪。他們的發射頻率增加了，命中率似乎也增加了。我只是想知道你是否對他們的進步以及他們進入高端市場的潛力有了新的想法。這是第一個問題。

Second is about regulation. What are your thoughts on regulatory risk around autonomous driving and assisted driving development? Do you think, if there is any regulatory intention to slow down things a bit in order to perfect the safety and customer experience? (Spoken in Mandarin)

二是關於監管。您對自動駕駛和輔助駕駛開發的監管風險有何看法？你認為，如果有任何監管意圖放慢速度以完善安全和客戶體驗？ (普通話)

This is Kevin, thank you for the question. I think for the product development cycle, we have our own strategy and schedule to launch new product. Basically, we are accelerating our development of our next generation of EIV platform, and also, the HVC-PD platform. As we shared before, we will roll out our brand new EIV models based on our next generation EIV platform next year. In 2023, we will have EREV platform next year. The 2023 will be a big year for us. We'll have two new models on the X platform and another two HPC BEV model launch. Yes.

我是凱文，謝謝你的提問。我認為對於產品開發週期，我們有自己的戰略和時間表來推出新產品。基本上，我們正在加速開發下一代 EIV 平台以及 HVC-PD 平台。正如我們之前分享的那樣，明年我們將推出基於我們下一代 EIV 平台的全新 EIV 模型。 2023年，我們明年會有EREV平台。 2023 年對我們來說將是重要的一年。我們將在 X 平台上推出兩款新車型，並推出另外兩款 HPC BEV 車型。是的。

For the regulation, in fact we have been closely communicating and engaging with the authorities. I think the intention from the [MIIP] is to standardize the overall smart electrical vehicle industry and reach the technology requirement for the ADAS solution.

對於監管，其實我們一直在跟官方進行密切的溝通和接觸。我認為 [MIIP] 的意圖是標準化整個智能電動汽車行業並達到 ADAS 解決方案的技術要求。

I think overall this is a good thing. This will ensure the healthy development of this industry. Yes.

我認為總的來說這是一件好事。這將確保該行業的健康發展。是的。

I think the impact to us is basically, in the future, we need to be more cautious when we launch the product with ADAS solution. I think it will take us more effort to fully develop a function, yes, before the launching to the market.

我認為對我們的影響基本上是，未來我們在推出帶有ADAS解決方案的產品時需要更加謹慎。我認為我們需要更多的努力來充分開發功能，是的，在投放市場之前。

That was our (inaudible), so there is no change of our strategy. But overall, I think our focus on ADAS will not change. Yes.

那是我們的（聽不清），所以我們的戰略沒有改變。但總體而言，我認為我們對 ADAS 的關注不會改變。是的。

This is very helpful color. Thank you, Kevin.

這是非常有用的顏色。謝謝你，凱文。

Thank you.

謝謝你。

Thank you. Our next question is from the line of Tim Hsiao of Morgan Stanley. Line is open. Please go ahead.

謝謝你。我們的下一個問題來自摩根士丹利的 Tim Hsiao。線路開通。請繼續。

Thanks for taking my question and congratulations on a solid result. I have two questions. The first question is could the management team shed some light on what components or type of chips are currently in short supply for Li Auto? Because if you look at the numbers, I think Li Auto's production seems more resilient than peers. How can we manage the supply disruption better than our peers? Is there any alternative sources? Li Auto could secure the component and the support, likely more than 12,000 monthly run rate into fourth quarter. This is the first question about the supply.

感謝您提出我的問題並祝賀您取得了不錯的成績。我有兩個問題。第一個問題是管理團隊能否說明理想汽車目前供應短缺的組件或芯片類型？因為如果你看數字，我認為理想汽車的生產似乎比同行更有彈性。我們如何才能比同行更好地管理供應中斷？有沒有其他來源？理想汽車可以確保組件和支持，到第四季度可能超過 12,000 個月的運行率。這是第一個關於供給的問題。

My second question I think Johnny touched briefly on during the presentation. What's the progress in our new plans for capacity expansion in Beijing? What's the nameplate capacity and when will the contribution from the new capacity start to kick in?

我認為約翰尼在演講中簡要提到了我的第二個問題。我們在北京的新產能擴張計劃進展如何？銘牌產能是多少？新產能的貢獻何時開始發揮作用？

(Spoken in Mandarin)

(普通話)

Thank you, Tim. This is Kevin. I will answer the first question about the shortage. Right now, the single biggest shortage we are facing is an industry-common shortage due to the COVID-19 situation in Malaysia, especially from [FT], so this is an industry-common shortage. In the past several months, we have been fighting every day for the supply. I don't think our situation is better than the other competitors. Yes.

謝謝你，蒂姆。這是凱文。我會回答第一個關於短缺的問題。目前，我們面臨的最大短缺是由於馬來西亞的 COVID-19 情況導致的行業普遍短缺，尤其是來自 [FT]，因此這是行業普遍短缺。在過去的幾個月裡，我們每天都在為供應而戰。我不認為我們的情況比其他競爭對手好。是的。

But the outlook for the next quarter, if the COVID-19 situation will getting better, we believe overall the industry supply will become more balanced. But the COVID-19 situation is not predictable, so it's still a risk for us. Yes.

但展望下個季度，如果 COVID-19 情況好轉，我們相信整體行業供應將變得更加平衡。但是 COVID-19 的情況是不可預測的，所以它對我們來說仍然是一個風險。是的。

Johnny, you want to comment on this?

約翰尼，你想對此發表評論嗎？

Oh, yes. For the Beijing [plant], I think we will release more details, yes, in the future. One thing we can make sure is on track to get ready for the BEV launch in 2023. Tim, thank you.

哦是的。對於北京[工廠]，我想我們會在未來發布更多細節。我們可以確保的一件事是為 2023 年推出 BEV 做好準備。蒂姆，謝謝你。

Great. Thanks for sharing.

偉大的。感謝分享。

Thank you. Our next question is from the line of Ming-Hsun Lee of BofA Securities. Please go ahead. Line is open.

謝謝你。我們的下一個問題來自美國銀行證券的 Ming-Hsun Lee。請繼續。線路開通。

Thank you. (Spoken in Mandarin)

謝謝你。 (普通話)

My first question is regarding the gross margin improvement trend. Especially in the second quarter, your SP is increasing but also your cost of goods sold per car is also decreasing, so could you elaborate more and also comment on the third quarter and the fourth quarter trend? This is my first question.

我的第一個問題是關於毛利率改善趨勢。尤其是二季度，你們的SP在增加，但是你們每輛車的銷售成本也在下降，所以你能不能詳細說說，也評論一下三季度和四季度的趨勢？這是我的第一個問題。

Second question, could you give us more details regarding your collaboration with Xinchen Power and the collaboration of EREV? Thank you.

第二個問題，您能否詳細介紹一下您與新晨動力的合作以及與EREV的合作？謝謝你。

Lee, thank you. This is Kevin. Very quickly your first question, besides our sales price increase of the new Li ONE, from the cost perspective, primarily we had - partially due to the [bond] cost reduction from some of our suppliers and also because of the sales volume increase. Therefore, the amortization will reduce, so that results in the gross margin increase.

李，謝謝你。這是凱文。很快你的第一個問題，除了我們新 Li ONE 的銷售價格上漲外，從成本的角度來看，主要是我們 - 部分原因是我們的一些供應商降低了 [債券] 成本，也因為銷量增加。因此，攤銷將減少，從而導致毛利率增加。

I think for the third quarter and the fourth quarter, we'll continue to see the gross margin will gradually improve also, yes. We still see that overall for this year blended gross margin will be somewhere between 19% to 20%. Yes.

我認為對於第三季度和第四季度，我們將繼續看到毛利率也將逐漸提高，是的。我們仍然看到今年的總體混合毛利率將在 19% 至 20% 之間。是的。

Your second question is about our joint venture with Xinchen [Donghi]. Yes. Actually, Xinchen Donghi is the leading engine company in China. Especially they have been a long-term partner with BMW. Yes. We have this joint venture, jointly develop and manufacture our next-generation EREV engine with Xinchen. For this, our joint venture, we have 51% of the share. Thank you, Lee.

你的第二個問題是關於我們與 Xinchen [Donghi] 的合資企業。是的。實際上，新晨東海是中國領先的發動機公司。尤其是他們一直是寶馬的長期合作夥伴。是的。我們有這個合資企業，與新晨共同開發和製造我們的下一代 EREV 發動機。為此，我們的合資企業擁有 51% 的股份。謝謝你，李。

Thank you.

謝謝你。

Thank you. Our next question is from the line of Bin Wang of Credit Suisse. Line is open. Please go ahead.

謝謝你。我們的下一個問題來自瑞士信貸的王斌。線路開通。請繼續。

Thank you. I've got two questions. Number 1 about long-term borrowing. We found out in the second quarter our long-term borrowing actually got to RMB5.6 billion. Given you have [plenty] cash on hand, can you explain why that had a big jump in the end of June? That's number 1 question.

謝謝你。我有兩個問題。關於長期借款的第一條。我們在第二季度發現我們的長期借款實際上達到了56億元人民幣。鑑於您手頭有 [大量] 現金，您能解釋一下為什麼 6 月底現金大幅上漲嗎？這是第一個問題。

Number 2 is about the volume guidance. You actually used to be guiding the September number can go to 10,000. But if you [unclear] third quarter guidance, it seems that if we maintain that 10,000 guidance for September, then that August should be a very low number. How should we think about the third quarter guidance? You also actually had at [1.5 million] units by 2025 and [in prior to maybe] next year thought about 150,000 units. [Unclear] next year, 2022, the volume should be 150,000 units?

第 2 條是關於交易量指導。您實際上曾經指導過 9 月的數字可以達到 10,000。但如果你[不清楚]第三季度的指導，似乎如果我們維持 9 月份的 10,000 指導，那麼 8 月份應該是一個非常低的數字。我們應該如何看待第三季度的指引？到 2025 年，你實際上還擁有 [150 萬] 個單位，並且 [在之前] 明年考慮了 150,000 個單位。 【不清楚】明年，2022年，量應該是15萬台？

Thank you.

謝謝你。

(Spoken in Mandarin)

(普通話)

First of all, our long-term borrowing because of the long term was [CB] in April. Yes, it's a CB on the long-term borrowing.

首先，我們的長期借款是 4 月份的 [CB]。是的，這是長期借款的可轉債。

Yes. Yes, this is Kevin. Thank you, Wang Bin, for the question. I think when we give out the guidance for third quarter, we have already taken into consideration of the potential risk of the impact of the COVID-19 in Malaysia. Yes, so therefore we don't want to be too aggressive. I think today is already the 30th, so in next two days, you will see our August number. Yes.

是的。是的，這是凱文。謝謝王斌的提問。我認為當我們發布第三季度的指導時，我們已經考慮了 COVID-19 在馬來西亞影響的潛在風險。是的，因此我們不想過於激進。我想今天已經是 30 號了，所以在接下來的兩天裡，你會看到我們的八月號。是的。

For the next year, I think your estimation is within the range of our plan, yes. Yes. Of course, we want to further increase the monthly delivery of our Li ONE.

對於明年，我認為你的估計在我們計劃的範圍內，是的。是的。當然，我們想進一步提高我們李ONE的月發貨量。

Thank you.

謝謝你。

Thank you. Our next question is from the line of Chang Liu of CICC. Please go ahead. Line is open.

謝謝你。我們下一個問題來自中金公司的劉暢。請繼續。線路開通。

(Spoken in Mandarin)

(普通話)

My first question is about our financial expenses. Could you give us some details on the acceleration of SG&A in second quarter and any guidance on the full-year R&D and SG&A expenses?

我的第一個問題是關於我們的財務費用。您能否向我們提供有關第二季度 SG&A 加速的一些細節，以及對全年研發和 SG&A 費用的任何指導？

My second question is on our [unclear] models to be launched in 2023. Could you give us some update on its development, especially some key [inaudible] price pressure? Thank you.

我的第二個問題是關於我們將於 2023 年推出的 [不清楚] 模型。您能否向我們介紹其發展的最新情況，尤其是一些關鍵的 [聽不清] 價格壓力？謝謝你。

Yes, for the SG&A - this is Johnny. For the SG&A, as I just mentioned, it's [orientated] to the network expansion and also the marketing and the promotion activities in the second quarter and also the increased [head costs] and the rental expenses. In the second half of this year, we will continue to expand our retail stores, towards our target of 200.

是的，對於 SG&A - 這是約翰尼。對於 SG&A，正如我剛才提到的，它 [oriented] 用於網絡擴展以及第二季度的營銷和促銷活動，以及增加的 [head costs] 和租金費用。今年下半年，我們將繼續擴大我們的零售店面，以達到我們 200 家的目標。

And for R&D, we still want to keep our -- the whole year guidance, which is around RMB3 billion. Yes.

對於研發，我們仍然希望保持我們的全年指導，即約 30 億元人民幣。是的。

The second question, Kevin?

第二個問題，凱文？

Yes, this is Kevin. For the HPC BEV models, we are on track, in terms of R&D process. To share some of the milestones, we are, for example, we already have our 4C new battery example ready. Yes. So that's a big milestone. And also, for our HPC superfast charging pole design, we have already finished the concept design and we plan to have our first pilot charging station within this year.

是的，這是凱文。對於 HPC BEV 模型，我們在研發過程方面走上正軌。為了分享一些里程碑，例如，我們已經準備好 4C 新電池示例。是的。所以這是一個重要的里程碑。此外，對於我們的 HPC 超快充電樁設計，我們已經完成了概念設計，我們計劃在今年內擁有我們的第一個試點充電站。

Thank you.

謝謝你。

Thank you. Our next question is from the line of [Sing Yu Fang] of UBS. Line is open. Please go ahead.

謝謝你。我們的下一個問題來自瑞銀的[Sing Yu Fang]。線路開通。請繼續。

Hi. I'm not sure if this my line. This is Paul Gong, UBS. I have two questions. The first one is regarding your split of the BEV versus the [unclear] -- versus the

你好。我不確定這是不是我的台詞。我是 UBS 的 Paul Gong。我有兩個問題。第一個是關於 BEV 與 [不清楚] - 與

EREV in terms of positioning? Starting from 2023 you will have 12. How do you position the different segment, and the size of each segment? And how shall we think? Is it going to be the EREV is more focused on the larger vehicle or SUV, MPV et cetera, and the BEV more focused on the smaller vehicle, like the sedans, etc? How shall we think about the different positioning of the BEV versus the EREV?

EREV在定位方面？從 2023 年開始，您將擁有 12 個。您如何定位不同的細分市場，以及每個細分市場的規模？我們應該怎麼想？是不是 EREV 更專注於大型車輛或 SUV、MPV 等，而 BEV 更專注於小型車輛，如轎車等？我們應該如何考慮 BEV 與 EREV 的不同定位？

My second question is regarding your R&D spending split, going forwards. For second half of this year, for next year, and going forwards, how much portion is going to be spent on the BEV? How much portion is going to be spent on the BEV? How much on the EREV and how much on the autonomous driving?

我的第二個問題是關於你們未來的研發支出分配。今年下半年、明年和未來，BEV 將花費多少？ BEV 將花費多少？ EREV 和自動駕駛分別有多少？

Let me translate my questions quickly.

讓我快速翻譯我的問題。

(Spoken in Chinese).

（用中文講）。

Paul, yes, me take the first question. This is Kevin. In the future, when we have a BV and the EREV at the same time, actually, we are not differentiate these two, based on size of car form factor. So, basically, all these two are driving powertrains. We will, based on this, develop cars to cover the price band from RMB200,000 to RMB500,000, and they each will have a different size of cars, designed for family users.

保羅，是的，我來回答第一個問題。這是凱文。未來，當我們同時擁有 BV 和 EREV 時，實際上，我們不會根據汽車外形尺寸來區分這兩者。所以，基本上，所有這兩個都在驅動動力總成。在此基礎上，我們將開發覆蓋20萬元至50萬元價格區間的汽車，並且他們每個人都會有不同尺寸的汽車，專為家庭用戶設計。

I think the key difference between these two are based on the customer's preference. If they are more concerned about the BEV's range anxiety and that they don't have access to good charging infrastructure, they will choose, we believe, they will choose EREV. Yeah. If they have a good charging infrastructure, they will choose BEV. So that's our viewpoint.

我認為這兩者之間的主要區別在於客戶的偏好。如果他們更關心 BEV 的里程焦慮，並且他們無法獲得良好的充電基礎設施，他們會選擇，我們相信，他們會選擇 EREV。是的。如果他們有良好的充電基礎設施，他們會選擇 BEV。這就是我們的觀點。

Yes.

是的。

Yes. For the expenses, we still want to keep our original guidance from now to 2023, to US$1 billion. Yes. That will cover the vehicles - the coming models, and also the autonomous driving and also some area we want to do in-house, in the next two to three years. And also, with some investment on the R&D side for the future. Intelligent driving side.

是的。對於費用，我們仍然希望從現在到 2023 年保持原來的指導，達到 10 億美元。是的。這將涵蓋車輛 - 即將推出的車型，以及自動駕駛以及我們希望在未來兩到三年內在內部進行的一些領域。而且，在未來的研發方面也有一些投資。智能駕駛端。

Thank you, Paul.

謝謝你，保羅。

Thank you.

謝謝你。

Thank you. (Operator Instructions) Our next question is from the line of Ying Bo Xu of Citic. Please go ahead. Your line is open.

謝謝你。 （操作員說明）我們的下一個問題來自中信的Ying Bo Xu。請繼續。你的線路是開放的。

(Spoken in Chinese). My first question is how, what's our pricing strategy? Are we trying to maintain our high margin or maybe we have more flexibility in the pricing per item?

（用中文講）。我的第一個問題是，我們的定價策略是什麼？我們是在努力維持我們的高利潤率，還是我們在每件商品的定價上有更大的靈活性？

The second question is that considering a lot of newcomers in this sector, maybe 2023 is a period that a lot of newcomers join in, and they're launching new models. By the year 2025 maybe the market share is going to be concentrated again, so how will expansion after three- or five-years' competition, like technical products and also [actuals]? So, could you give us some colours? Thank you?

第二個問題，考慮到這個領域有很多新人，可能2023年是很多新人加入的時期，他們正在推出新車型。到2025年可能市場份額會再次集中，那麼經過三五年的競爭，技術產品和[實際]將如何擴展？那麼，你能給我們一些顏色嗎？謝謝？

Yes. Thank you, Ying Bo. This is Kevin. First of all, about the pricing. From our point of view, for each of the products we design are based on a price point, and unless we see the competitiveness issue, otherwise we will not alter the price point of this product.

是的。謝謝你，英博。這是凱文。首先，關於定價。從我們的角度來看，我們設計的每一個產品都是基於一個價位的，除非我們看到競爭力的問題，否則我們不會改變這個產品的價位。

I think, to answer your question in another way, to gain more volume, definitely we will launch products to cover wider price span. Yes. So, as we mentioned, that in the future our products will cover between RMB200,000 to RMB500,000. That's not to say, we are going to reduce the price of some our products. It's we are going to design different products to cover different price point. Yes. That's our philosophy.

我認為，換一種方式回答你的問題，為了獲得更多的銷量，我們肯定會推出覆蓋更廣泛價格跨度的產品。是的。因此，正如我們提到的，未來我們的產品將覆蓋人民幣 20 萬至人民幣 50 萬元。這並不是說，我們將降低某些產品的價格。我們將設計不同的產品來覆蓋不同的價位。是的。這就是我們的理念。

Also, by the way, the market size of between RMB200,000 to RMB50,000 is increasing. Yes, that's probably the only increasing segment in the -- yes, it's a segment, the volume is increasing.

另外，順便說一句，20萬至5萬元的市場規模正在擴大。是的，這可能是唯一增加的部分——是的，這是一個部分，數量在增加。

About the future competition, starting from 2023, I think we will stick to our three key choices. The first one is that we compete in the overall PV market. Yes, that's why we designed -- that's why we believe we have to solve the range anxiety issue. That's one of the core value we want to deliver to our customer. That's why you see we already have a EREV solution, and we are going to have our next generation EREV solution to completely solve the range anxiety issue for our customer. And this is our mid-term long-term strategy. We'll continue to launch EREV products.

關於未來的競爭，從2023年開始，我認為我們會堅持我們的三個關鍵選擇。第一個是我們在整個光伏市場競爭。是的，這就是我們設計的原因 - 這就是為什麼我們相信我們必須解決範圍焦慮問題。這是我們希望為客戶提供的核心價值之一。這就是為什麼你看到我們已經有了 EREV 解決方案，並且我們將擁有我們的下一代 EREV 解決方案來徹底解決我們客戶的範圍焦慮問題。這是我們的中長期戰略。我們將繼續推出 EREV 產品。

On the other hand, we also see the opportunity to solve the range anxiety issue with the high-power charging solutions, yes. That's why we have this new whale and shark 3platforms. This is the first choice.

另一方面，我們也看到了用大功率充電方案解決續航里程焦慮問題的機會，是的。這就是為什麼我們擁有這個新的鯨魚和鯊魚 3 平台。這是第一選擇。

The second choice is our target customer choice. We want to focus only on the family users. Yes. We see this is a growing demand segment, and when we design our car, we want to design the car catering the needs of all the family members, yes.

第二個選擇是我們目標客戶的選擇。我們只想關注家庭用戶。是的。我們看到這是一個不斷增長的需求部分，當我們設計汽車時，我們希望設計的汽車能夠滿足所有家庭成員的需求，是的。

The third thing is that we will continue to focus on the autonomous driving solution development and also the smart cabin solution development.

第三，我們會繼續專注於自動駕駛解決方案的研發，以及智能座艙解決方案的研發。

So these three things are the fundamental building block of our product competitiveness. We don't think we'll -- we believe we'll stick to these three key things. Yes.

所以這三件事是我們產品競爭力的基本組成部分。我們不認為我們會——我們相信我們會堅持這三個關鍵的事情。是的。

Thanks, Kevin, that's really helpful. Thank you.

謝謝，凱文，這真的很有幫助。謝謝你。

Thank you. And as we are reaching the end of our conference call, I'd like to turn the call back over to the Company for closing remarks. Ms. Janet Zhang, please go ahead.

謝謝你。當我們的電話會議即將結束時，我想將電話轉回給公司以作結束語。請 Janet Zhang 女士繼續。

Thank you, Annie. Thank you, once again for joining with us today. If you have any further questions, please feel free to contact Li Auto's Investor Relations team. Then that's all for today. Thank you and have a good one.

謝謝你，安妮。再次感謝您今天加入我們。如果您有任何其他問題，請隨時聯繫理想汽車的投資者關係團隊。那麼今天就到此為止。謝謝你，祝你玩得開心。