Mei Ri Jing Ji Xin Wen·2025-05-14 07:41Core Viewpoint - Li Auto has demonstrated a strong focus on cost control and budget management, which has contributed to its financial success and ability to achieve profitability in a challenging market environment [1][4]. Group 1: Early Challenges and Financial Discipline - Li Auto faced significant challenges in securing early-stage financing, with CEO Li Xiang recounting experiences of meeting numerous investors without success [1][3]. - The company has maintained a strict budget approval process, with even minor expenditures requiring oversight, reflecting a culture of frugality established from its inception [1][3]. - Li Xiang emphasized the importance of avoiding unnecessary spending, stating that a small oversight could lead to larger financial issues, thus reinforcing the company's stringent financial discipline [3]. Group 2: Cost Management and Competitive Position - Li Auto is recognized for its low marketing expenses, with a market expense rate of only 0.6%, significantly lower than competitors, which indicates effective cost management strategies [3][4]. - The company's management expense ratio for 2023 was reported at 7.89%, a decrease of 4.62 percentage points year-on-year, while competitors like NIO and Xpeng had ratios of 23.17% and 21.38%, respectively [3]. - Li Auto became the first among new domestic car manufacturers to achieve profitability, reporting a net profit of 8 billion yuan in 2024, with a gross margin of 19.8% for its automotive business [4]. Group 3: Prioritization of Safety and Quality - Despite its stringent cost control measures, Li Auto prioritizes safety-related expenditures, allowing for flexibility in budget approvals when it comes to enhancing vehicle safety [4].