理想汽車 (LI) 2020 Q3 法說會逐字稿

Hello, ladies and gentlemen. Thank you for standing by for Li Auto's Third Quarter 2020 Earnings Conference Call.

女士們，先生們，您好。感謝您耐心等待理想汽車2020年第三季度財報電話會議。

(Operator Instructions) Today's conference call is being recorded.

（操作員說明）正在錄製今天的電話會議。

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

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, Rivati. Good evening and good morning, everyone. Welcome to Li Auto's Third Quarter 2020 Earnings Conference Call, our first earnings conference call since our IPO.

謝謝你，里瓦蒂。大家晚上好，早上好。歡迎來到理想汽車 2020 年第三季度財報電話會議，這是我們自 IPO 以來的首次財報電話會議。

The Company's financial and operating results were published in the press release earlier today and were posted on the Company's IR website.

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; our CFO, Mr. Johnny Tie Li; and our CTO, Mr. Kai to begin with prepared remarks. Our Founder and CEO, Mr. Xiang Li, will join for the Q&A discussion.

今天的電話會議有我們的總裁沉亞南先生；我們的首席財務官 Johnny Tie Li 先生；和我們的首席技術官 Kai 先生首先準備好的發言。我們的創始人兼首席執行官李翔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 U.S. 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 U.S. Securities and Exchange Commission.

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的風險和不確定性，例如公司的實際結果可能與今天表達的觀點大相徑庭。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中。

The Company does not assume any obligation to update any forward-looking statement except as required under applicable law. Please also note that Li Auto's press release and this conference call include discussions of unaudited GAAP financial information as well as non-audited non-GAAP measures.

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。另請注意，理想汽車的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 指標的討論。

Please refer to Li Auto's press release, which contains a reconciliation of the unaudited non-GAAP measures to comparable GAAP measures.

請參閱理想汽車的新聞稿，其中包含未經審計的非 GAAP 指標與可比 GAAP 指標的對賬。

With that I will now turn the call to our President, Kevin. Please go ahead, sir.

有了這個，我現在將把電話轉給我們的總裁凱文。請繼續，先生。

Thank you, Janet. Hello everyone and thank you for joining our call today. We are very excited to announce the results of our opening quarters as a public company following our July 30th listing.

謝謝你，珍妮特。大家好，感謝您今天加入我們的電話會議。我們非常高興地宣布我們在 7 月 30 日上市後作為上市公司的第一季度業績。

In the third quarter, we achieved the robust results. We delivered 8,660 Li ONEs in the third quarter which represented a quarter-over-quarter increase of 31.1% versus our deliveries in Q2.

第三季度，我們取得了強勁的業績。我們在第三季度交付了 8,660 輛 Li ONE，與第二季度的交付量相比，環比增長了 31.1%。

As of the end of October, cumulative deliveries in 2020 reached 21,852 vehicles. According to new car insurance registration data reported by China Automotive Technology and Research Center, in September and October, Li ONE became the best-selling new energy SUV amongst all models in China, a very strong testament to its highly competitive product features.

截至10月底，2020年累計交付量達21852輛。根據中國汽車技術研究中心公佈的新車保險登記數據顯示，9月和10月，力ONE成為國內所有車型中最暢銷的新能源SUV，有力地證明了其極具競爭力的產品特性。

In addition, in October, our order showed strong growth setting a new monthly record and giving us solid confidence in our fourth quarter deliveries, which we expect to reach 11,000 to 12,000 units and achieve a new quarterly record.

此外，在 10 月份，我們的訂單增長強勁，創下了新的月度記錄，這讓我們對第四季度的交付量充滿信心，我們預計將達到 11,000 至 12,000 台，並創下新的季度記錄。

At the same time we have improved our gross margin and operating cash flow due to increased deliveries, improved BOM cost, and overall operating and manufacturing efficiency. In the third quarter, our gross margin expanded to 19.8% compared to 13.3% in the second quarter. We also generated operating cash flow of RMB929.8 million, which is 105.8% higher than the prior quarter.

與此同時，由於交付量增加、BOM 成本降低以及整體運營和製造效率提高，我們的毛利率和運營現金流有所改善。第三季度，我們的毛利率從第二季度的 13.3% 擴大到 19.8%。我們還產生了 9.298 億元人民幣的經營現金流，比上一季度增長 105.8%。

In terms of R&D, we will further increase our investment in this regard and continue to leverage technology to create value for users and to optimize our user experience. Through product and technology innovations, we are committed to providing our supplier -- users with safer, easier, and more cost effective mobility solutions ensuring we live up to their support and trust.

在研發方面，我們將進一步加大這方面的投入，繼續用技術為用戶創造價值，優化用戶體驗。通過產品和技術創新，我們致力於為我們的供應商——用戶提供更安全、更簡單、更具成本效益的移動解決方案，確保我們不辜負他們的支持和信任。

In September, we added the important new role of CTO to our senior management roster with Mr. Kai Wang joining our team from Visteon. This new addition reflects our philosophy and the pursuit of combining expertise from the automotive, smart device, and the internet industries and building an outstanding team across many disciplines to develop smart vehicles for our users. With Mr. Wang's visionary judgment and thinking, profound expertise, and impressive track record, we believe Mr. Wang will make crucial contributions to our product and Company.

9 月，我們在高級管理人員名冊中增加了 CTO 這一重要的新角色，王凱先生從偉世通加入了我們的團隊。這一新成員反映了我們的理念和追求，即結合汽車、智能設備和互聯網行業的專業知識，並建立一支跨學科的優秀團隊，為我們的用戶開發智能汽車。憑藉王先生遠見卓識的判斷力和思維、深厚的專業知識和令人印象深刻的業績記錄，我們相信王先生將為我們的產品和公司做出重要貢獻。

To constantly provide a best-in-class experience to our users, we continually evolve and optimize our vehicles through FOTA updates throughout the entire vehicle lifecycle. We also continuously collect performance and behavior data from our users to drive our product iterations. By the end of October, we have released 10 major vehicle OTA upgrades to Li ONE users to provide them with a better driving experience.

為了不斷為我們的用戶提供一流的體驗，我們在整個車輛生命週期內通過 FOTA 更新不斷改進和優化我們的車輛。我們還不斷從用戶那裡收集性能和行為數據，以推動我們的產品迭代。截至10月底，我們已經為理想ONE用戶發布了10款主要車輛OTA升級，為他們提供更好的駕駛體驗。

Moving to our digitalized direct sales and service network, it's an essential component of our closed-loop business system. This network feeds direct user usage data and feedback to both our R&D team and service team for us to analyze and optimize vehicle features and after-sales services, ultimately aiming to optimize the user experience.

轉向我們的數字化直銷和服務網絡，它是我們閉環業務系統的重要組成部分。該網絡將直接的用戶使用數據和反饋反饋給我們的研發團隊和服務團隊，供我們分析和優化車輛功能和售後服務，最終旨在優化用戶體驗。

As of the end of October, we had 41 retail stores covering 36 cities in China, maintaining a high level of operational efficiency to each retail store demonstrate that we have completed closed-loop systems setup. Next, we plan further grow the system to create an efficient virtuous cycle of user feedback, vehicle development and service enhancement.

截至10月底，我們在中國36個城市擁有41家零售店，每家零售店都保持了高水平的運營效率，表明我們已經完成了閉環系統的搭建。接下來，我們計劃進一步發展該系統，以創建用戶反饋、車輛開發和服務提升的高效良性循環。

We cannot achieve our results without the support and trust of our users. As a user-driven automotive and technology enterprise, Li Auto always puts our users at the highest priority and will spare no effort to provide our users with safer, more convenient, and more value-added products and services to further realize our ideal of car and home.

我們的成績離不開用戶的支持和信任。作為一家以用戶為導向的汽車科技企業，理想汽車始終把用戶放在第一位，將不遺餘力地為用戶提供更安全、更便捷、更具附加值的產品和服務，進一步實現我們的用車理想。和家。

This concludes my prepared remark. Now, our CTO, Mr. Kai Wang, will discuss more of the R&D aspect of our business. Please go ahead.

我準備好的發言到此結束。現在，我們的 CTO Kai Wang 先生將更多地討論我們業務的研發方面。請繼續。

Thank you for the introduction, Kevin. Hello, everyone. It's my honor to join Li Auto recently, led by Entrepreneur, Mr. Xiang Li.

謝謝你的介紹，凱文。大家好。很榮幸能夠在企業家李翔先生的帶領下，於近日加入理想汽車。

I would like to share my thoughts on the R&D initiatives as CTO of the Company. I am a believer in progressive innovation because Rome was not built in one day. It has always been a better approach to follow the natural law of evolution to implement technological concepts, step by step, prioritizing user demand. This belief echoes well with Li Auto's guiding principle, leveraging technology to create value for users, to optimize user experience steadily and continuously.

作為公司的首席技術官，我想分享一下我對研發計劃的看法。我相信漸進式創新，因為羅馬不是一天建成的。遵循進化的自然規律，以用戶需求為優先，循序漸進地實施技術理念，一直是更好的做法。這一理念與理想汽車的理念不謀而合，以科技為用戶創造價值，穩步持續優化用戶體驗。

From a technology roadmap point of view, the CTO office will focus on in-house development of anything that has direct impact to our end-user experience such as intelligent cabin, ADAS/autonomous driving, and the correlated cutting-edge technologies such as cloud, data mining, and so on. We will also leverage top tier partners support to achieve our objective.

從技術路線圖來看，CTO辦公室將專注於內部開發任何對我們最終用戶體驗有直接影響的東西，如智能座艙、ADAS/自動駕駛，以及相關的前沿技術，如雲、數據挖掘等。我們還將利用頂級合作夥伴的支持來實現我們的目標。

In September, we announced a third-way -- a three-way strategic collaboration with global semiconductor giant, NVIDIA, and Chinese domestic leader, Desay SV, to be the first OEM in the world implementing NVIDIA flagship chipset Orin in a vehicle in order to provide a premium user experience. To support these R&D activities, we will increase our investment in R&D and the size of our team continuously. For example, we will expand our autonomous driving team size by three times by the first half of 2021. I'm confident in our capability to execute this roadmap and continue to build a leading position in the intelligent automotive industry.

9 月，我們宣布了第三條路——與全球半導體巨頭 NVIDIA 和中國國內龍頭企業德賽西威的三路戰略合作，成為全球第一家在車輛中採用 NVIDIA 旗艦芯片組 Orin 的 OEM，以便提供優質的用戶體驗。為了支持這些研發活動，我們將不斷增加研發投入和團隊規模。例如，到2021年上半年，我們的自動駕駛團隊規模將擴大三倍。我有信心我們有能力執行這個路線圖，並繼續在智能汽車行業建立領先地位。

Now, I will turn this call over to our CFO, Mr. Tie Li, for a closer look at our financial performance in the third quarter.

現在，我將把這個電話轉給我們的首席財務官李鐵先生，以便更仔細地了解我們第三季度的財務業績。

Thank you, Kai. Hello, everyone. I will now go over some of our financial results for the third quarter of 2020.

謝謝你，凱。大家好。我現在將回顧一下我們 2020 年第三季度的一些財務業績。

To be mindful of the length of this call, I will address financial highlights here and encourage you to refer to our earnings press release, which is posted online for additional details.

請注意本次電話會議的時間長度，我將在這裡介紹財務要點，並鼓勵您參閱我們在線發布的收益新聞稿以了解更多詳細信息。

Total revenue in the third quarter of 2020 were RMB2.51 billion, representing an increase of 28.9% from RMB1.95 billion in the second quarter of 2020. This included vehicle sales in the third quarter of 2020, which were RMB2.46 billion representing an increase of 28.4% from the second quarter of 2020. The increase in vehicle sales was mainly due to a 31.1% increase in vehicle deliveries to 8,660 vehicles in the third quarter of 2020 from 6,604 vehicles in the second quarter of 2020.

2020 年第三季度總收入為人民幣 25.1 億元，較 2020 年第二季度的人民幣 19.5 億元增長 28.9%。其中包括 2020 年第三季度的汽車銷售額，為人民幣 24.6 億元，佔較2020年第二季度增長28.4%。汽車銷量增長主要是由於汽車交付量從2020年第二季度的6,604輛增長31.1%至2020年第三季度的8,660輛。

Revenue for other sales and services was RMB46.1 million in the third quarter of 2020, representing an increase of 64.1% from the second quarter. The increase in other sales and services was in line with the increased vehicle sales and the increasing vehicle volume using our services.

2020年第三季度其他銷售及服務收入為人民幣4610萬元，較第二季度增長64.1%。其他銷售和服務的增長與汽車銷量的增長和使用我們服務的車輛數量的增加一致。

Cost of sales in the third quarter was RMB2.01 billion representing an increase of 19.3% from the second quarter.

第三季度銷售成本為人民幣20.1億元，較第二季度增長19.3%。

Vehicle margin in the third quarter was 19.8% comparing -- compared to 13.7% in the second quarter of 2020. The increase of vehicle margin was primarily attributable to the increase in purchase price of certain materials, including a one-time rebate received from a supplier and lower unit-manufacturing overhead cost due to increased production volume.

與 2020 年第二季度的 13.7% 相比，第三季度的車輛利潤率為 19.8%。車輛利潤率的增長主要歸因於某些材料的採購價格上漲，包括從供應商和由於產量增加而降低的單位製造間接成本。

Gross margin in the third quarter was 19.8% compared to 13.3% in the second quarter, which was mainly driven by the increase in vehicle margin.

第三季度的毛利率為 19.8%，而第二季度為 13.3%，這主要是受汽車利潤率增長的推動。

Total operating expenses in the third quarter were RMB676.7 million, representing an increase 55.2% from RMB436 million in the second quarter of 2020.

第三季度總運營費用為人民幣6.767億元，較2020年第二季度的人民幣4.36億元增長55.2%。

Research and development expenses in the third quarter of 2020 were RMB334.5 million representing an increase of 66.1% from RMB201.4 million in the second quarter of 2020. Excluding share-based compensation expenses, the adjusted research and development expenses were RMB278.8 million, representing a quarter-over-quarter increase of 38.4%. The increase was primarily attributable to the starting research and development for our next model as well as increased headcount.

2020年第三季度研發費用為人民幣3.345億元，較2020年第二季度的人民幣2.014億元增長66.1%。剔除股權激勵費用，調整後的研發費用為人民幣278.8元億元，環比增長38.4%。增長主要歸因於我們的下一個模型的開始研發以及員工人數的增加。

Selling, general and administrative expenses in the third quarter of 2020 were RMB342.2 million, excluding share-based compensation expenses, the adjusted selling general and administrative expenses were RMB264.2 million, representing an increase of 12.7%. The increase was primarily driven by increased high cost as well as increased marketing and promoting expenses.

2020 年第三季度銷售、一般和管理費用為人民幣 3.422 億元，不包括股權激勵費用，調整後的銷售、一般和管理費用為人民幣 2.642 億元，增長 12.7%。增加的主要原因是高成本增加以及營銷和推廣費用增加。

Loss from operations in the third quarter of 2020 was RMB180 million compared to a loss of RMB176.3 million in the second quarter of 2020. Excluding share-based compensation expenses, the non-GAAP adjusted loss from operations was RMB45 million decreasing 74.5% from the second quarter of 2020.

2020 年第三季度的運營虧損為人民幣 1.8 億元，而 2020 年第二季度為虧損人民幣 1.763 億元。不計入股權激勵費用，非美國通用會計準則調整後的運營虧損為人民幣 4500 萬元，較 2020 年第二季度下降 74.5% 2020 年第二季度。

Net loss was RMB106.9 million in the third quarter of 2020 compared to RMB75.2 million loss in the second quarter of 2020. Excluding share-based compensation expenses and change in fair value of warrants and derivatives or liabilities, we achieved positive bottom-line with adjusted net income of RMB16 million in the third quarter compared to RMB159.2 million adjusted net loss in the second quarter of 2020.

2020 年第三季度淨虧損為人民幣 1.069 億元，而 2020 年第二季度為虧損人民幣 7520 萬元。剔除股權激勵費用以及認股權證和衍生品或負債的公允價值變動，我們實現了正底-第三季度調整後淨收入為人民幣 1600 萬元，而 2020 年第二季度調整後淨虧損為人民幣 1.592 億元。

Turning to our balance sheet and cash flow. The balance sheet of our cash and cash equivalents, restricted cash, time deposits and short-term investments was RMB18.92 billion as of September 30th, 2020 compared to RMB3.71 billion as of December 31st, 2019. The increase was primarily driven by the issuance of Series D private financing, the completion of our IPO, and the concurrent private placements.

轉向我們的資產負債表和現金流量。截至 2020 年 9 月 30 日，我們的現金及現金等價物、受限制現金、定期存款和短期投資的資產負債表為人民幣 189.2 億元，而截至 2019 年 12 月 31 日為人民幣 37.1 億元。增加的主要原因是D 輪私募融資的發行、我們 IPO 的完成以及同步的私募。

Operating cash flow in the third quarter of 2020 was RMB929.8 million, more than doubled from RMB451.7 million in the second quarter of 2020.

2020 年第三季度的經營現金流為人民幣 9.298 億元，較 2020 年第二季度的人民幣 4.517 億元增長了一倍多。

Free cash flow was RMB749.9 million in the third quarter of 2020 representing an increase of 149.3% from RMB300.8 million in the second quarter of 2020.

2020 年第三季度的自由現金流為人民幣 7.499 億元，較 2020 年第二季度的人民幣 3.008 億元增長 149.3%。

And now for our Business Outlook.

現在是我們的業務展望。

For the fourth quarter of 2020, the Company expects deliveries to be between 11,000 vehicles and 12,000 vehicles representing an increase of approximately 27% to 38.6% from the third quarter of 2020.

公司預計 2020 年第四季度的交付量將在 11,000 輛至 12,000 輛之間，比 2020 年第三季度增長約 27% 至 38.6%。

The Company also expects first quarter total revenues to be between RMB3.11 billion, $457.8 million and RMB3.39 billion, $499.4 million, representing an increase of 23.7% to 35.1% from the third quarter of 2020.

公司還預計第一季度總收入將在人民幣 31.1 億元、4.578 億美元和人民幣 33.9 億元、4.994 億美元之間，比 2020 年第三季度增長 23.7% 至 35.1%。

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

現在我將把電話轉給接線員開始我們的問答環節。謝謝你。

(Operator Instructions) We have our first question comes from the line of Fei Fang from Goldman Sachs. Please go ahead.

（操作員說明）我們的第一個問題來自高盛的方飛。請繼續。

Thanks. [Xiang Zong], [Tie Zong], Kevin, Kai, very impressive results. Congrats on the tremendous progress.

謝謝。 【象總】、【鐵總】、凱文、凱，成績非常可觀。祝賀取得的巨大進步。

Let me start with two questions. First is about the supply chain. Reflecting on the Li ONEs' gaining sales, how do you plan to drive battery sourcing efficiency and prices from here. For example for battery price, which is obviously a chunky part of your BOM, what's the opportunity to cut costs further from here and also can management shed some light on the progress with NVIDIA's partnership, when do you plan to deploy the components?

讓我從兩個問題開始。首先是關於供應鏈。反思 Li ONE 的銷售增長，您打算如何從這裡推動電池採購效率和價格。例如，對於電池價格，這顯然是您 BOM 中的一個重要組成部分，從這裡進一步削減成本的機會是什麼？管理層能否闡明與 NVIDIA 合作夥伴關係的進展情況，您計劃何時部署這些組件？

Second is about the recall incidents in the past few weeks, can you discuss the latest progress with hardware replacement and also what has been the impact on Li ONEs' backlog, if any. For context, our own analysis is that this is a RMB10 million cost issue which is 0.1% of your annual revenues, so I want to see if you have any response to that? (Speaking in Chinese).

第二個是關於這幾週的召回事件，能不能談談硬件更換的最新進展，以及對Li ONEs的積壓有什麼影響，如果有的話。背景方面，我們自己的分析是，這是一個1000萬人民幣的成本問題，佔你們年收入的0.1%，所以我想看看你們對此有何回應？ （說中文）。

Okay. This is Kevin. Thank you, [Fang Fei].

好的。這是凱文。謝謝你，【方飛】。

I will answer your question. First, as we can see that since the launch of Li ONE, we have already seen some substantial improvements of our gross margin. This is due to the BOM cost reduction and also the manufacturing efficiency. So as our volume increase gradually, we'll be able to procure auto parts at a lower price and continuously reduce the manufacturing so this trend will not change. Some of the numbers that you already see -- you should already see that reflected in the financial numbers shared by -- shared by Li Tie, just now.

我會回答你的問題。首先，正如我們所看到的，自 Li ONE 推出以來，我們的毛利率已經有了一些實質性的改善。這是由於 BOM 成本的降低以及製造效率的提高。所以隨著我們的量逐漸增加，我們可以以較低的價格採購汽車零部件，並不斷減少製造，所以這個趨勢不會改變。你已經看到的一些數字 - 你應該已經看到反映在李鐵分享的財務數字中的 - 剛才分享的。

For the NVIDIA collaboration, I will turn over to Mr. Wang Kai, yes.

NVIDIA的合作，就交給王凱先生吧，是的。

Yes. This is Kai speaking. So regarding collaboration with NVIDIA, I think everything is on track. In software part, we have already ported our software into NVIDIA [current] Xavier platform for vehicle level road test with already good results. We will continue on software development and testing until our Orin-based hardware is available.

是的。我是凱。所以關於與英偉達的合作，我認為一切都在正軌上。在軟件部分，我們已經將我們的軟件移植到 NVIDIA [當前] Xavier 平台上進行車輛級道路測試，並取得了不錯的成績。在基於 Orin 的硬件可用之前，我們將繼續進行軟件開發和測試。

In the hardware side, we are working closely with both NVIDIA and Desay SV. I think everything is in control with good progress, and I think in future, we will provide more update regarding the topic. Thank you.

在硬件方面，我們正在與 NVIDIA 和德賽西威密切合作。我認為一切都在控制之中，進展順利，而且我認為將來，我們將提供有關該主題的更多更新。謝謝你。

Okay. Thank you, Kai. Then for the second question about the recent recall. Currently, the recall related work is progressing steadily and they are expected to take about three months for us to complete.

好的。謝謝你，凱。然後是關於最近召回的第二個問題。目前，召回相關工作正在穩步推進中，預計需要三個月左右的時間完成。

We handled this recall with transparency and efficiency. This is a reflection of our Company's core value. We always put our customer at first priority. That's why we got quite positive feedback from our existing users and potential buyers.

我們以透明和高效的方式處理了此次召回。這反映了我們公司的核心價值。我們始終將客戶放在首位。這就是為什麼我們從現有用戶和潛在買家那裡得到了非常積極的反饋。

So far, after the announcement of the recall, the growth momentum of our new orders remain the same as before, so no any major impact observed. As for the costs related to this recall, we think your estimation is about right, yes. It's in line with our estimation.

截至目前，召回公告公佈後，我們的新訂單增長勢頭與之前保持一致，未觀察到任何重大影響。至於與這次召回有關的成本，我們認為你的估計是正確的，是的。這符合我們的估計。

Thank you. Thank you, Fang Fei, for the question, yes.

謝謝你。謝謝方飛的提問，是的。

Thank you. We have our next question coming from the line of Tim Hsiao from Morgan Stanley. Please go ahead.

謝謝你。我們的下一個問題來自摩根士丹利的 Tim Hsiao。請繼續。

(Speaking in Chinese). So my first question is about the R&D spending. Based on the financials, third quarter results, we noticed that Li Auto's R&D spending in terms of the absolute amount or percentage [of] the revenues seem to be lower than other auto EV peers. So it's partly due to the [capitalization] (corrected by the company after the call) or cost control, but in light of the growing investments of the new model technology innovation and also autonomous driving next year, could management or the Li Auto keep such a relatively lower R&D spending or how should we think about the trajectory into 2021?

（說中文）。所以我的第一個問題是關於研發支出。根據財務數據，第三季度業績，我們注意到理想汽車的研發支出在收入的絕對金額或百分比方面似乎低於其他汽車電動汽車同行。所以這部分是由於[資本化]（公司在電話會議後更正）或成本控制，但鑑於明年新車型技術創新和自動駕駛的投資不斷增加，管理層或理想汽車能否保留這些研發支出相對較低，或者我們應該如何考慮到 2021 年的發展軌跡？

And my second question is about the competitive landscape because we noticed that the competitive landscape this year is quite benign but looking into next year 2021, the market might be getting more crowded, with Tesla Model Y, Volkswagen MEB-based model. And in the meantime, we also notice all your local peers like [Innovati] and the [Baoneng] Group are also launching extended-range EVs, EREV. So how could Li Auto stay competitive in terms of the product and strategy.

我的第二個問題是關於競爭格局，因為我們注意到今年的競爭格局相當良性，但展望明年 2021 年，市場可能會變得更加擁擠，特斯拉 Model Y，大眾 MEB 車型。與此同時，我們還注意到你們所有的本地同行，如 [Innovati] 和 [寶能] 集團也在推出增程式電動汽車，EREV。那麼理想汽車如何在產品和戰略上保持競爭力。

So those are my two questions. Thank you.

所以這是我的兩個問題。謝謝你。

(Speaking in Chinese).

（說中文）。

Okay. Thank you, Li Xiang. This is Kevin. I will -- I will try to translate all these comments, yes. I have already wrote it down.

好的。謝謝你，李想。這是凱文。我會——我會嘗試翻譯所有這些意見，是的。我已經寫下來了。

So for the -- for the R&D investments, this is -- this is -- this was our strategy, we decided four, five years ago, yes, we want to invest all our resources into one car model, yes. This is -- this was our strategy.

所以對於 - 對於研發投資，這是 - 這是 - 這是我們的戰略，我們在四五年前決定，是的，我們想將所有資源投入到一個車型中，是的。這是——這是我們的策略。

And for our Li ONE, as you may know that we only have this Li ONE and for Li ONE, we only have one configuration. This is today a big challenge to us, but also give us a lot of -- a lot of advantages.

而對於我們的李ONE，你可能知道我們只有這個李ONE，對於李ONE，我們只有一種配置。今天這對我們來說是一個很大的挑戰，但也給了我們很多——很多優勢。

First advantage is that the software upgrades because we only have one configuration, all the OTA become more -- much easier.

第一個優勢是軟件升級，因為我們只有一個配置，所有的 OTA 變得更加——容易得多。

Secondly, so for the supply chain efficiency perspective, as you can imagine the -- our forecast is very accurate and the -- our suppliers, they are -- the efficiency of our suppliers also very high because we only have one configuration.

其次，從供應鏈效率的角度來看，你可以想像——我們的預測非常準確，而且——我們的供應商，他們——我們供應商的效率也非常高，因為我們只有一種配置。

The third is our internal efficiency also very high because we only have one configuration, that's why we -- our R&D resources are no -- do not need to -- we do not need to invest the R&D money on different configuration, yes.

第三是我們的內部效率也非常高，因為我們只有一種配置，這就是為什麼我們——我們的研發資源沒有——不需要——我們不需要在不同的配置上投入研發資金，是的。

So the -- this was our strategy and the reality right now we see prove that our strategy was right. Actually as you already know that in the past 10 months, we have always been the number one selling model in the large-size New Energy SUV, yes.

所以 - 這是我們的戰略，我們現在看到的現實證明我們的戰略是正確的。其實大家都知道，在過去的10個月裡，我們一直是大型新能源SUV銷量第一的車型，是的。

So for the next step -- for the next step, we'll continue to maintain our efficiency, very high R&D efficiency, but at the same time our investment in R&D will be multiple times for our second generation of products.

所以下一步——下一步，我們將繼續保持我們的效率，非常高的研發效率，但同時我們在研發上的投資將是我們第二代產品的數倍。

Starting from 2022, each year, we'll have at least one car model and we'll -- but we'll stay with our strategy that for each car model, we only have one configuration. We want to focus our resources onto one configuration. And our strategy is for any car model, we launch into the market, it will -- our target is to make it the number-one selling model in its price segment, okay.

從 2022 年開始，每年我們將至少擁有一種車型，而且我們會——但我們將堅持我們的戰略，即對於每種車型，我們只有一種配置。我們希望將我們的資源集中在一個配置上。我們的策略是針對任何車型，我們推出市場，它會——我們的目標是讓它成為其價格段中銷量第一的車型，好吧。

For your second question, is about the competitive landscape. First, next year, we're going to introduce more function into -- feature and function into our existing Li ONE to ensure that our competitiveness will not -- will not -- will continue to be improved.

對於你的第二個問題，是關於競爭格局的。首先，明年，我們將在我們現有的 Li ONE 中引入更多功能 - 特徵和功能，以確保我們的競爭力不會 - 不會 - 將繼續提高。

You mentioned the Model Y. Actually compared with Model Y, Li ONE is the much bigger car with more space and is designed for the Chinese family and its performance and its size and feature is comparable with Model X, so we are not worried about the Model Y.

你提到了Model Y，其實和Model Y相比，Li ONE是更大的車，空間更大，專為中國家庭設計，性能、尺寸和功能與Model X不相上下，所以我們不擔心Y型。

And for the -- for the EREV, for the range extension solution, actually you're -- you're right. There are a group of OEMs are introducing a new EREV models into the market next year, but from our viewpoint range-extension solution is not a technology choice, it's just a solution for us to help our customer to replenish the energy, right.

對於 - 對於 EREV，對於範圍擴展解決方案，實際上你是 - 你是對的。明年有一批 OEM 將推出一款新的 EREV 車型，但從我們的角度來看，增程解決方案不是技術選擇，它只是我們幫助客戶補充能量的解決方案，對吧。

So Tesla working on their Supercharger, NIO working on battery swapping, we are working on EREV, these are all energy replenishment solution.

所以特斯拉在做Supercharger，蔚來在做換電，我們在做EREV，這些都是能量補充方案。

But for the customer really buying a car the -- a very convenient energy replenishment method is one -- only one consideration, ultimately the customer is buying an intelligent, I'll say, smart electric vehicle, so their focus primarily is first about the product, the product design, the product feature function, need to be very competitive. That's why we are not worried about the other people also build the EREV because the core of our competitive advantage is our product itself, okay.

但是對於真正買車的客戶來說——一種非常方便的能量補充方式是一個——唯一的考慮因素，最終客戶購買的是智能的，我會說，智能電動汽車，所以他們的關注點首先是關於產品，產品設計，產品特色功能，需要很有競爭力。這就是為什麼我們不擔心其他人也建造 EREV，因為我們競爭優勢的核心是我們的產品本身，好吧。

Thank you. We have our next question from the line of Paul Gong from UBS. Please go ahead.

謝謝你。我們的下一個問題來自瑞銀集團的 Paul Gong。請繼續。

Hi. Thanks guys for taking my question. I have two questions. The first one is regarding the network expansion. So far you have a much smaller distribution network but you have demonstrated much higher efficiency than your close peers. Going forward, how do you foresee your distribution channel or expansion, do you have a net target to expand how many stores by the end of this year and of next year, and more importantly how do you foresee the per store sales volume could be maintained at which level?

你好。謝謝你們提出我的問題。我有兩個問題。第一個是關於網絡擴展。到目前為止，你們的分銷網絡要小得多，但你們的效率比你們的同行要高得多。展望未來，您如何預見您的分銷渠道或擴張，您是否有一個淨目標在今年年底和明年擴展多少家門店，更重要的是，您如何預見可以維持每家門店的銷售量在哪個級別？

My second question is regarding the autonomous driving roadmap. I heard Kai said, Rome was not built within one day but I would be really curious to know what would be your roadmap or timeline, at which year you're going to achieve certain level and what will be the hardware solution, would you include Lidar or would you include even more cameras and then today's solution and what do you aim to achieve at this -- in this stage?

我的第二個問題是關於自動駕駛路線圖。我聽到凱說，羅馬不是一天建成的，但我真的很想知道你的路線圖或時間表是什麼，你將在哪一年達到一定水平，硬件解決方案是什麼，你會包括嗎激光雷達或者你會包括更多的相機，然後是今天的解決方案，你的目標是在這個階段實現什麼？

And beside of that you have some -- some of your competitors are choosing to sell the software off -- for extra package or extra money but given that you have keep all Li ONE at same specs, will you choose to sell the software as an optional package, will you choose to install the software on every vehicle you sell just as you did in the Li ONE? (Speaking in Chinese).

除此之外，你還有一些 - 你的一些競爭對手選擇出售軟件 - 以獲得額外的包裹或額外的錢，但鑑於你讓所有的 Li ONE 保持相同的規格，你會選擇出售軟件作為選裝包，你會選擇在你賣的每輛車上都安裝這個軟件，就像你在 Li ONE 上做的那樣嗎？ （說中文）。

This is Kevin, thank you, Paul. I will take your first question and Mr. Wang Kai will take your second one.

我是凱文，謝謝你，保羅。我來回答你的第一個問題，王凱先生來回答你的第二個問題。

So for the -- for the retail stores, we expand, we plan to expand the number of retail stores to 50 to 60 across most of the cities in China by end of this year. We -- as we extend our direct sales and service network, we are quite confident that we can leverage our growing brand recognition and to maintain the sales efficiency of each store, yes.

所以對於 - 對於零售店，我們擴大，我們計劃到今年年底將中國大部分城市的零售店數量擴大到 50 到 60 家。我們 - 隨著我們擴展我們的直接銷售和服務網絡，我們非常有信心我們可以利用我們不斷增長的品牌知名度並保持每家商店的銷售效率，是的。

And if we compare with some of our peers, we took a different approach, yes. So some of our peers their approach is to quickly expand the number of retail stores to cover more cities then try to slowly improve their sales efficiency at a later stage.

如果我們與一些同行進行比較，我們採取了不同的方法，是的。所以我們一些同行他們的做法是先快速擴大門店數量，覆蓋更多的城市，後期再慢慢提高銷售效率。

We took a different approach. We implement gradually. We implement gradual expansion of our sales network and we try to maintain a high level of sales efficiency per store. Okay. Kai?

我們採取了不同的方法。我們逐步實施。我們逐步擴大我們的銷售網絡，並努力保持每家門店的高銷售效率。好的。凱？

Yes. Yes, this is Kai. I will take over the question regarding the roadmap of autonomous driving.

是的。是的，這是凱。我將接手有關自動駕駛路線圖的問題。

So regarding ADAS/ autonomous driving roadmap, I think we will continuously improve our existing software and develop more features for users. So with our current hardware platform, new features such as fully-Automated Parking Assist aka app APA on the basis of fusion of [ultrasonic] and vision inputs will be released via FOTA in 2021. And also more feature will follow as well. We will unveil more in future.

所以關於ADAS/自動駕駛路線圖，我認為我們會不斷改進我們現有的軟件，為用戶開發更多的功能。因此，在我們目前的硬件平台上，新功能，例如基於[超聲波]和視覺輸入融合的全自動泊車輔助系統，又名應用程序 APA，將於 2021 年通過 FOTA 發布。更多功能也將隨之而來。我們將在未來推出更多。

In 2022, we will launch brand new architecture for our new vehicles, which contains scalable and hardware upgradable ECU and sensor set along with more use case updates via FOTA so that our product could achieve up to Level 4 autonomous driving progressively, that's our goal.

2022年，我們將為新車推出全新的架構，其中包含可擴展和硬件可升級的ECU和傳感器組，以及通過FOTA進行更多用例更新，使我們的產品逐步達到4級自動駕駛，這是我們的目標。

Based on current research and technology baseline, we don't believe Level 5 fully autonomous driving without any interfering by human come in the near future because it -- it really requires technology breakthrough in areas such as quantum computing and other such kind of algorithms along with it. So therefore our focus will be on what kind of real value we can bring to our customers towards let's say progressively and steadily to level -- kind of a Level 4 experience. That's the most important topic for us.

根據目前的研究和技術基線，我們認為沒有任何人為乾擾的 5 級完全自動駕駛不會在不久的將來出現，因為它確實需要在量子計算和其他此類算法等領域取得技術突破用它。因此，我們的重點將放在我們可以為客戶帶來什麼樣的真正價值上，讓我們說漸進和穩定地達到水平 - 一種 4 級體驗。這對我們來說是最重要的話題。

We believe with clear goal setting and also excellent execution, we will become the leader of autonomous driving in the industry. To achieve this plan, I think I already described roughly the timeline, so our team size will be tripled in 2021 as already mentioned versus current situation.

我們相信，憑藉清晰的目標設定和出色的執行力，我們將成為行業自動駕駛的領導者。為了實現這個計劃，我想我已經大致描述了時間線，所以我們的團隊規模將在 2021 年比目前的情況增加兩倍。

We already have very good progress recently on senior level experts and management hiring, the newcomers either well-known from industry or with graduation from top universities such as Stanford or Berkeley and so on.

我們最近在高級專家和管理人員招聘方面已經取得了很好的進展，新人要么是業內知名人士，要么畢業於斯坦福或伯克利等頂尖大學。

On top of that, we also have established a strategic collaboration with our partners different from the normal cooperation, they are tightly integrated with our team with on-site co-development as part of fuel for our R&D acceleration.

最重要的是，我們還與合作夥伴建立了不同於常規合作的戰略合作，他們與我們的團隊緊密結合，現場共同開發作為我們研發加速的一部分燃料。

So regarding your last question about if we're going to charge our user regarding the software part. We won't charge anything below Level 3 because we think that's essential features for them, so everything below Level 3 will be for free. Thank you.

所以關於你最後一個關於我們是否要就軟件部分向用戶收費的問題。我們不會對 3 級以下的任何內容收費，因為我們認為這是他們的基本功能，因此 3 級以下的所有內容都是免費的。謝謝你。

Thank you. We have our next question from the line of Lei Wang from CICC. Please go ahead.

謝謝你。我們的下一個問題來自中金公司的王磊。請繼續。

Good evening. This is Wang Lei speaking from CICC. Congratulations on the great margin and also bottom line. I believe I just (inaudible) positive non-GAAP targets. That's starting a great move. Congratulations. (Speaking in Chinese)

晚上好。我是中金公司的王磊。祝賀利潤豐厚和底線。我相信我只是（聽不清）積極的非 GAAP 目標。這是開始一個偉大的舉動。恭喜。 （以中文發言）

So the first question goes to CFO, Mr. Li Tie. So how may Li Auto actually keep roughly 20% of GPM, with barely 8,660 a quarter deliveries because Tesla actually [barely] achieved 19% of [duty] on the first half of last year, with almost 10 times your deliveries.

所以第一個問題是首席財務官李鐵先生。那麼，理想汽車實際上如何保持大約 20% 的毛利率，每季度交付量僅為 8,660 輛，因為特斯拉去年上半年實際上 [幾乎] 實現了 [關稅] 的 19%，交付量幾乎是你們的 10 倍。

And then the second question goes to CTO, Mr. Wang Kai, for the [second one], if you don't mind. You know, actually (inaudible) on [drive core] and proposed weakening OEM leading roles and can you provide more colors on the update opinion since you now joined in OEM yourself? (Speaking in Chinese)

然後第二個問題交給 CTO 王凱先生，如果你不介意的話。你知道，實際上（聽不清）在 [驅動核心] 上提出削弱 OEM 主導作用，你能在更新意見中提供更多顏色，因為你現在自己加入了 OEM 嗎？ （以中文發言）

Okay. This is Li Tie. I will take the first question. As I mentioned earlier, the increase of margin this quarter was primarily attributable to the decrease in purchase of certain materials including one-time rebate from -- received from a supplier and also the lower unit manufacturing overhead cost as our volume -- production volume increased. And we are very confident the GP margin for the whole year will around -- 16% and improve steadily next year.

好的。這是李鐵。我先回答第一個問題。正如我之前提到的，本季度利潤率的增加主要是由於某些材料的採購量減少，包括從供應商處收到的一次性回扣，以及隨著我們的產量增加而降低的單位製造間接費用.我們非常有信心全年的 GP 利潤率將在 16% 左右，並在明年穩步提高。

And I think for Tesla, I think you know, you guys should be you know, more familiar than us. Starting from the very early stage of -- like a Tesla Model S and Model X, Tesla has around from 15% to 20% margin and also Model 3. And then the -- if they've got a better BOM cost, then they will lower the price so they just keep their margin around 20%. I think this is their strategy.

我認為對於特斯拉，我想你們知道，你們應該比我們更熟悉。從早期階段開始——就像特斯拉 Model S 和 Model X，特斯拉有大約 15% 到 20% 的利潤率，還有 Model 3。然後——如果他們有更好的 BOM 成本，那麼他們會降低價格，所以他們只將利潤率保持在 20% 左右。我認為這是他們的策略。

So it's -- now, they use this volume to reach -- to reach that GP margin because [they have seen] in the -- in their first model versus big volume model of Model X, yes. Then I will pass to Mr. Kai. Yes.

所以它 - 現在，他們使用這個數量來達到 - 達到 GP 利潤率，因為 [他們已經看到] - 在他們的第一個模型與 Model X 的大體積模型中，是的。然後我將傳遞給凱先生。是的。

Yes. Regarding your question -- yes, regarding your second question. It is a very good question.

是的。關於你的問題——是的，關於你的第二個問題。這是一個很好的問題。

So actually my philosophy still stands. Probably -- maybe I -- please allow me to explain the spirit of the philosophy. So the tree structure represents let's say the automotive profit distribution structure and collaboration [among], let's say, the old partners here. So you can imagine traditional way, there are lots of trees in a hill -- a forest so --

所以實際上我的哲學仍然有效。也許——也許我——請允許我解釋哲學的精神。所以樹結構代表了汽車利潤分配結構和協作 [among]，比方說，這裡的老夥伴。所以你可以想像傳統的方式，一座山上有很多樹——一片森林——

Yes.

是的。

-- every OEM control the tiers precisely, I mean the margin of them because they control the key, let's say, the barrier, the core barrier, this is gasoline engine. But nowadays, the situation is totally changed because now we enter to -- from industry era to intelligent era, is complete new business model need to be applied if you want to win from the market.

——每個 OEM 都精確地控制層級，我的意思是它們的邊緣，因為它們控制著關鍵，比方說，障礙，核心障礙，這是汽油發動機。但是現在，情況完全變了，因為現在我們進入了——從工業時代到智能時代，要想從市場中取勝，是不是需要應用全新的商業模式。

And then I introduced so-called not ring structure but round table structure. That means now, there are lots of alliance among OEM, among Tier 1, Tier 2, whatever you can call it even the new let's say business model provider such as Uber or like Didi.

然後我介紹了所謂的非環形結構而是圓桌結構。這意味著現在，OEM 之間有很多聯盟，在第 1 層、第 2 層之間，無論你怎麼稱呼它，甚至是新的商業模式提供商，比如優步或滴滴。

And then the key thing above the whole thing is, time to market in this new game. And then you need to base on your position choose a table, sit down together with strong partners and then really win the game as early as possible just like you know, you're going to dinner with your friends and then you finish the main course, now you can get dessert, much earlier than others. That's the key spirit of it.

然後最重要的是，這款新遊戲的上市時間。然後你需要根據你的位置選擇一張桌子，和強大的伙伴坐在一起，然後儘快真正贏得比賽，就像你知道的，你要和你的朋友一起吃飯，然後你吃完主菜，現在你可以得到甜點，比其他人早得多。這就是它的核心精神。

And we believe -- because you know, when I was in Tier 1, I need to choose my table wisely, yes, but now as a leading OEM, actually our profile is more like we already take lots of let's say the work of Tier 1, traditional Tier 1 because we can do in-housing, we need to have the best experience for user and do the FOTA. And then we need to be fast so that's a different game.

我們相信——因為你知道，當我在 Tier 1 時，我需要明智地選擇我的桌子，是的，但現在作為領先的 OEM，實際上我們的個人資料更像是我們已經接受了很多讓我們說 Tier 的工作1、傳統Tier 1因為我們可以做in-housing，我們需要給用戶最好的體驗，做FOTA。然後我們需要快點，這樣比賽就不同了。

So back to the main point, so the philosophy still stands but now I'm in another table.

回到要點，哲學仍然有效，但現在我在另一張桌子上。

Thank you. We have our next question from the line of [Mei He] from U.S. Tiger Securities. Please go ahead.

謝謝你。我們的下一個問題來自美國老虎證券的[Mei He]專線。請繼續。

Hi. Good quarter. Thank you for taking my question. I have a few ones about EREV. There has been market chatters in your policies regarding NEV license plate can be changed in Tier 1 cities like Beijing or Shanghai. So how could you prepare for such changes if EREV is no longer entitled to NEV license in one particular important city. How could that impact your overall sales target?

你好。好季度。謝謝你提出我的問題。我有幾個關於 EREV 的。關於在北京或上海等一線城市可以更改新能源車牌照的政策，市場一直在議論紛紛。那麼，如果 EREV 在某個特定重要城市不再有權獲得 NEV 牌照，您如何為此類變化做好準備。這將如何影響您的整體銷售目標？

And secondly, at a higher level, what do you think of government support on EREV? Lastly, if we -- for longer horizon, what's your plan for BEV transition such as this? (Speaking in Chinese).

其次，在更高的層面上，您如何看待政府對 EREV 的支持？最後，如果我們 - 從長遠來看，您對 BEV 過渡的計劃是什麼？ （說中文）。

Yes. This is Kevin. I will try to answer the first half of your question. Then leave the second half to Mr. Li Xiang to comment on our BEV strategy.

是的。這是凱文。我將嘗試回答您問題的前半部分。那麼下半場就留給李想老師點評一下我們的BEV戰略吧。

So for the -- for the government policy, actually we have a -- being very proactively communicate with our -- all kind of government bodies. However, we cannot predict or comment on the policy which will be introduced by the local government.

因此，對於 - 對於政府政策，實際上我們有一個 - 非常主動地與我們的 - 各種政府機構溝通。但是，我們無法預測或評論地方政府將出台的政策。

But to answer your question, actually I give you a -- an example. Even in Beijing, you know, Beijing is a city where the license policy is most restrictive to us. Our sales are still very, very strong, yes. So our sales in cities where do not have license plates restrictions accounted for more than 60% of our total sales in both September and October. That's to say our vehicle sales are not dependent on the policy incentives, are not very sensitive to the car plate policy, yes.

但為了回答你的問題，實際上我給你舉了一個例子。即使在北京，你也知道，北京是牌照政策對我們限制最嚴的城市。是的，我們的銷售仍然非常非常強勁。因此，我們在沒有牌照限制的城市的銷售額占我們 9 月和 10 月總銷售額的 60% 以上。就是說我們的汽車銷量不是靠政策激勵，對車牌政策不是很敏感，是的。

So and also for the overall National Policy, in general China's National Policy and regulation encourage the coexistence of multiple forms of New Energy EV vehicles including BEV in -- also plug-in hybrid, EREV and even the hydrogen new energy.

因此，對於總體國家政策而言，總體而言，中國的國家政策和法規鼓勵多種形式的新能源電動汽車並存，包括 BEV，以及插電式混合動力、EREV 甚至氫新能源。

So for us, we already see that the direction, this coexistence direction has already being further confirmed by the recent released National New Energy Automotive Industry Development Plan, yes. So overall, the National Policy is in favor of EREV.

所以對我們來說，我們已經看到了方向，這個共存的方向已經被最近發布的《國家新能源汽車產業發展規劃》進一步確認了，是的。因此，總體而言，國家政策有利於 EREV。

And for the BEV plan, I will turn -- turnover to Mr. Li Xiang to comment.

而對於 BEV 計劃，我將轉向 - 營業額給李想先生評論。

(Speaking in Chinese).

（說中文）。

Okay. Thank you, Li Xiang. I will try to -- this is Kevin again. I will try to translate what Li Xiang just explained.

好的。謝謝你，李想。我會盡力——這又是凱文。我會盡量翻譯李想剛才解釋的內容。

First of all, our goal is to build a high-level premium smart electric vehicle, so this is our goal. When we look at this market, the key issue we need to solve is the -- the charge -- the charging issue, right, how our customers replenish their energy is the key for the user experience.

首先，我們的目標是打造高水平的高端智能電動汽車，所以這是我們的目標。當我們看這個市場時，我們需要解決的關鍵問題是——充電——充電問題，對，我們的客戶如何補充能量是用戶體驗的關鍵。

And we are -- we are -- keep a very close eye on the second-generation charging solution which is -- which is a very clear to us is a 400-kwatt charging infrastructure which will -- which can charge a car four to five times faster than today's infrastructure.

我們正在——我們正在——密切關注第二代充電解決方案——我們非常清楚這是一個 400 千瓦的充電基礎設施——可以為四輛汽車充電比今天的基礎設施快五倍。

For this -- for the second-generation charging infrastructure, it will benefit both the customer and the business. From the customer's perspective they do need to -- they -- their car can the charged in 10, 15 minutes. They don't need to leave their car when the car is being charged so they can stay in the car.

為此 - 對於第二代充電基礎設施，它將使客戶和企業都受益。從客戶的角度來看，他們確實需要——他們——他們的汽車可以在 10、15 分鐘內充電。他們不需要在汽車充電時離開汽車，因此他們可以留在車內。

And for -- from the business perspective, when the charging speed becomes that fast the business model become viable, yes because today for the slow-charging -- actually the charging station cannot make money, the business model doesn't work but when the charging speed becomes faster the business model becomes viable, yes.

對於 - 從商業角度來看，當充電速度變得那麼快時，商業模式變得可行，是的，因為今天對於慢速充電 - 實際上充電站無法賺錢，商業模式不起作用但是當充電速度變得更快，商業模式變得可行，是的。

So to achieve this 400-kwatt charging solution, there are three technology dependencies. First is the 800 volt -- high-voltage vehicle platform. Second is the -- is the government regulation on the 500 amp current regulation. And the third is, very important is the battery cell which can sustain 4C charging.

因此，要實現這個 400 千瓦的充電解決方案，存在三個技術依賴性。首先是800伏——高壓汽車平台。其次是——政府對 500 安培電流的監管。第三，非常重要的是可以支持4C充電的電芯。

So we are -- again, we are keeping a very close eye on these three-technology evolvement and we cannot disclose yet when we're going to build BEV, but when these three-technology become mature and available to us we'll -- we'll -- we'll definitely work on the BEV solution.

所以我們 - 再說一次，我們正在密切關注這三種技術的發展，我們還不能透露我們何時構建 BEV，但是當這三種技術變得成熟並可供我們使用時，我們將 - - 我們會 - 我們一定會致力於 BEV 解決方案。

But overall, again, to emphasize range-extension solutions from our viewpoint is a long-term solution. It's not an interim solution because the EREV solution is the -- is the best fit for the larger-size SUV to -- so even when the second-generation of charging infrastructure becomes available, EREV is still one of the -- our viewpoint, one of the mainstream of the technology choices.

但總的來說，從我們的角度來看，強調範圍擴展解決方案是一個長期解決方案。這不是臨時解決方案，因為 EREV 解決方案是 - 最適合大型 SUV - 所以即使第二代充電基礎設施可用，EREV 仍然是 - 我們的觀點之一，技術選擇的主流之一。

Thank you. We have our next question from the line of [Yingbo Xu] from Citic. Please go ahead.

謝謝你。我們的下一個問題來自中信的 [Yingbo Xu]。請繼續。

Thank you for the opportunity. I have a quick question about -- it appears that Tesla has launched their own autonomous chip, and also NIO has announced that they're trying to launch their own autonomous chip. So my question is self-developed autonomous chip advantage (inaudible) or the autonomous vehicle, and what's our plan on that? Do we plan to launch our self-developed chips too? Thank you. (Speaking in Chinese).

謝謝你給我的機會。我有一個簡短的問題——特斯拉似乎已經推出了他們自己的自主芯片，而 NIO 也宣布他們正在嘗試推出他們自己的自主芯片。所以我的問題是自主研發的自動芯片優勢（聽不清）或自動駕駛汽車，我們在這方面有什麼計劃？我們是否也打算推出自研芯片？謝謝你。 （說中文）。

Okay. Thank you. This is Kai speaking. Maybe I take over this question.

好的。謝謝你。我是凱。也許我接手這個問題。

Decisions on either in-house or outsource chipset is determined by efficiency. When I talk about efficiency, it's two parts, commercially and technically. So commercially, let's say from OEM side, let's say, I think this is until you have really massive volume, it will be a risk because chipset industry is very asset-heavy investment and also a long-return cycle.

內部或外包芯片組的決定取決於效率。當我談到效率時，它分為兩個部分，商業上和技術上。所以在商業上，讓我們從 OEM 方面來說，我認為直到你有真正巨大的數量，這將是一個風險，因為芯片組行業是非常重資產的投資，也是一個很長的回報週期。

Because of myself, I have direct plus indirect experience in China and also in Finland making chipset, SoC chipset myself, close to -- maybe close to 10 years so usually it takes -- chipset design two, up to three years just for development. And then you have three years usually the lifecycle and then you need to think about change. So think about six years all together. This is a really commercially risky, maybe without-efficiency if OEM development by itself.

因為我自己，我在中國和芬蘭都有直接和間接的經驗，我自己製作芯片組，SoC 芯片組，接近 - 可能接近 10 年，所以通常需要 - 芯片組設計兩年，最多三年僅用於開發。然後你通常有三年的生命週期，然後你需要考慮改變。所以一起想想六年。這在商業上是有風險的，如果 OEM 開發本身可能沒有效率。

So from technical side, I think there's one condition and you can really seriously think about making chipset for yourself because software maturity or a very deep understanding of the system is really the essential condition to build your chipset yourself.

所以從技術方面來說，我認為有一個條件，你真的可以認真考慮為自己製作芯片組，因為軟件成熟度或對系統的非常深刻的理解確實是自己製作芯片組的必要條件。

Like Tesla, they have a good understanding already at least at that time, they cannot find a very good fit in the market then they choose design by themselves. But the problem is from semiconductor point of view, they were also involved during the whole process. So to make a chipset decision is really a cautious decision, OEM need to really think about from both ways.

像特斯拉，他們至少在那個時候就已經很了解了，他們在市場上找不到非常合適的，然後他們自己選擇設計。但問題是從半導體的角度來看，他們也參與了整個過程。所以做芯片組的決定真的是一個謹慎的決定，OEM需要真正從兩方面考慮。

In short time, we don't think we will enter to that business. Technically, I think we still need some time to really understand how to let's say make our software really mature and really good enough into the business. Thank you.

在短時間內，我們認為我們不會進入該業務。從技術上講，我認為我們仍然需要一些時間來真正了解如何使我們的軟件真正成熟並且真正足夠好地融入業務。謝謝你。

Thank you. We have our next question from the line of Robert Cowell from 86Research. Please go ahead.

謝謝你。我們的下一個問題來自 86Research 的 Robert Cowell。請繼續。

Hi, Management. Thank you for taking my question. So congratulations on the results for the Lixiang ONE. It seems like its first model has really proven itself and your guidance is showing that the momentum continues.

嗨，管理層。謝謝你提出我的問題。所以祝賀Lixiang ONE取得的成績。它的第一個模型似乎真的證明了自己，你的指導表明這種勢頭還在繼續。

My question is how we frame the -- frame of thinking about when is -- when is the right time to develop a second model and then strategically what types of vehicles are we looking at for the second -- for the second model. In particular I want to ask about a concept that Chehejia released back in the early years of the Company for a compact sedan. I think it was called the SEV. I'm wondering if that is a design that is still under consideration.

我的問題是我們如何構建 - 思考什麼時候的框架 - 什麼時候是開發第二個模型的正確時間，然後從戰略上我們正在尋找第二種模型的車輛類型 - 第二個模型。特別想問一下車和家在公司早年發布的一個緊湊型轎車的概念。我認為它被稱為 SEV。我想知道這是否是仍在考慮中的設計。

So I'll quickly translate it to Chinese. (Speaking in Chinese).

所以我會很快把它翻譯成中文。 （說中文）。

(Speaking in Chinese).

（說中文）。

Okay. Thank you, Li Xiang. This is Kevin. I will -- I will translate what Li Xiang just described.

好的。謝謝你，李想。這是凱文。我會——我會翻譯李想剛才描述的內容。

So first of all, we are still in our initial phase of our Company. We focus -- we focus on one car model and one product. Our goal is to achieve the -- with the Li ONE, we want to achieve -- become the top-selling model in its price segment which is RMB300K to RMB350K price segment.

因此，首先，我們仍處於公司的初始階段。我們專注——我們專注於一種車型和一種產品。我們的目標是實現——我們希望通過 Li ONE 實現——成為 30 萬至 35 萬人民幣價格段中最暢銷的車型。

With this first product, Li ONE, we want to leverage this first product to build and also to prove that our sales -- our sales, our service, our supply chain and our R&D are all closed-loop system.

有了第一個產品，Li ONE，我們想利用這個第一個產品來建立並證明我們的銷售——我們的銷售、我們的服務、我們的供應鍊和我們的研發都是閉環系統。

Secondly, of course we are working on -- already are working on our second product so as we already disclosed, 2022, we're going to launch our next product which is a full-size EREV SUV.

其次，當然我們正在努力 - 已經在開發我們的第二個產品，所以正如我們已經披露的那樣，到 2022 年，我們將推出我們的下一個產品，即全尺寸 EREV SUV。

As for the SEV, actually we already stopped this project in the end of 2017, yes, and we have no any further investment in this project. We think we are in a very good position in this SUV segment for family, so we will stay in this segment. We will stay with -- we're very focused on our existing segment.

至於SEV，其實我們在2017年底就已經停止了這個項目，是的，我們沒有對這個項目進行任何進一步的投資。我們認為我們在這個家庭 SUV 細分市場中處於非常有利的位置，因此我們將留在這個細分市場。我們將繼續——我們非常專注於我們現有的細分市場。

Yes. Robert, thank you.

是的。羅伯特，謝謝你。

Thank you. I would now like to turn the call back over to the Company for any closing remarks. Ms. Janet Zhang, please go ahead.

謝謝你。我現在想把電話轉回給公司，聽取任何結束語。請 Janet Zhang 女士繼續。

Okay. Thank you once again for joining with us today. If you have 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.

好的。再次感謝您今天加入我們。如果您還有其他問題，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。