Financial Data and Key Metrics Changes - Total revenues in Q3 2025 were RMB 27.4 billion, a decrease of 36.2% year over year and 9.5% quarter over quarter [24] - Vehicle sales contributed RMB 25.9 billion, down 37.4% year over year and 10.4% quarter over quarter, primarily due to lower vehicle deliveries [24] - Gross profit was RMB 4.5 billion, down 51.6% year over year and 26.3% quarter over quarter, with a vehicle margin of 15.5% compared to 20.9% in the same period last year [25][26] - Operating expenses were RMB 5.6 billion, down 2.5% year over year and up 7.8% quarter over quarter [27] - Net loss in Q3 was RMB 624.4 million, compared to a net income of RMB 2.8 billion in the same period last year [28] - Cash position remained strong with a balance of RMB 98.9 billion at the end of the quarter [28] Business Line Data and Key Metrics Changes - R&D expenses increased to RMB 3 billion, up 15% year over year, reflecting investments in new vehicle programs and technology [27] - SG&A expenses decreased to RMB 2.8 billion, down 17.6% year over year, mainly due to share-based compensation recognition from the previous year [27] Market Data and Key Metrics Changes - The company expects deliveries in Q4 2025 to be between 100,000 and 110,000 vehicles, with total revenue projected between RMB 26.5 billion and RMB 29.2 billion [29] Company Strategy and Development Direction - The company plans to revert to an entrepreneurial model starting Q4 2025, focusing on long-term product and technology development [11][23] - Key strategic choices include focusing on embodied AI products, which are seen as the future of user interaction with vehicles [15][22] - The company aims to enhance its full-stack AI system, emphasizing the need for a different approach to technology that integrates physical and digital capabilities [16][22] Management's Comments on Operating Environment and Future Outlook - Management acknowledged challenges in supply chain and product lifecycle but emphasized a long-term vision for the next decade [4][23] - The transition from EREV to BEV is seen as a significant opportunity, with expectations for NEV penetration rates in China to reach 55-60% by 2026 [46] - The company is optimistic about achieving a historic breakthrough in deliveries in 2026, leveraging superior product strength and user value [49] Other Important Information - The company is implementing a dual supplier strategy for batteries to address production ramp-up challenges [42] - The recall of the Li Mega was recognized in Q3 due to its impact on operations and deliveries, affecting gross profit margins [54] Q&A Session Summary Question: What technology or product progress can be expected in 2026? - The company will launch an AI system based on the M100 chips, which will enhance user experience by transitioning products from passive to proactive machines [32][33] Question: How is the company preparing for the transition to BEV? - The company is focusing on in-house development of electric drive systems, battery systems, and electronic control to ensure efficiency and user experience [35][36] Question: What updates are there on orders and deliveries of the Li I8 and I6? - The I8 and I6 models are entering core BEV markets with increasing orders, and production capacity for the I6 is expected to reach 20,000 units monthly by early next year [41][42] Question: Why did operating cash flow decrease significantly? - The decrease in operating cash flow was attributed to lower deliveries impacting revenue and a shortened payment cycle to suppliers [43] Question: How will the company respond to changes in subsidy policies in 2026? - The company plans to implement a peace of mind purchase program to cover purchase tax differences for customers and will continue to focus on technological advancements to offset policy impacts [47][48]

Li Auto (NasdaqGS:LI) Q3 2025 Earnings Call November 26, 2025 07:00 AM ET Company ParticipantsJanet Zhang - Investor Relations DirectorJohnny Tie Li - Executive Director and CFOXiang Li - Founder, Chairman, and CEONone - TranslatorPaul Gong - Head of China Autos ResearchConference Call ParticipantsTim Hsiao - AnalystMing Hsun Li - AnalystTina Hu - AnalystNone - AnalystOperatorHello, ladies and gentlemen. Thank you for standing by for Li Auto's third quarter 2025 earnings conference call. At this time, all p ...

Financial Data and Key Metrics Changes - Total revenues in Q3 2025 were RMB 27.4 billion, a decrease of 36.2% year over year and 9.5% quarter over quarter [25] - Vehicle sales contributed RMB 25.9 billion, down 37.4% year over year and 10.4% quarter over quarter, primarily due to lower vehicle deliveries [25] - Gross profit was RMB 4.5 billion, down 51.6% year over year and 26.3% quarter over quarter, with a vehicle margin of 15.5% compared to 20.9% in the same period last year [26] - Operating expenses were RMB 5.6 billion, down 2.5% year over year and up 7.8% quarter over quarter [27] - Net loss in Q3 was RMB 624.4 million, compared to a net income of RMB 2.8 billion in the same period last year [29] - Cash position remained strong with a balance of RMB 98.9 billion at the end of the quarter [29] Business Line Data and Key Metrics Changes - R&D expenses increased to RMB 3 billion, up 15% year over year, reflecting investments in new vehicle programs and technology [27] - SG&A expenses decreased to RMB 2.8 billion, down 17.6% year over year, mainly due to prior year share-based compensation expenses [28] Market Data and Key Metrics Changes - The company expects deliveries in Q4 2025 to be between 100,000 and 110,000 vehicles, with total revenue projected between RMB 26.5 billion and RMB 29.2 billion [30] Company Strategy and Development Direction - The company plans to revert to an entrepreneurial model starting Q4 2025, focusing on long-term product and technology development [10][23] - Emphasis will be placed on developing embodied AI products, which are seen as the future of automotive technology [15][22] - The company aims to enhance user experience through a full-stack AI system, with a focus on in-house developed technologies [36][62] Management's Comments on Operating Environment and Future Outlook - Management acknowledged challenges in supply chain and product lifecycle impacting operations and deliveries [4] - The company is optimistic about the NEV penetration rate in China, expecting it to reach 55-60% in 2026 [47] - Management expressed confidence in navigating market cycles and leading technological transformation [23] Other Important Information - The company is implementing a dual supplier strategy for batteries to address production ramp-up challenges [42] - The recall of the Li Mega was recognized in Q3 due to its impact on operations and deliveries [55] Q&A Session Summary Question: What technology or product progress can be expected in 2026? - The company will launch an AI system based on the M100 chips, enhancing user experience and transitioning products to more proactive machines [33] Question: How is the company preparing for the transition from EREV to BEV? - The company is focusing on in-house development of electric drive systems, battery systems, and electronic control to ensure a smooth transition [35][36] Question: What is the impact of the upcoming changes in trade-in subsidy policy? - The company anticipates a pull-forward effect in deliveries at the end of 2025, followed by a dip in Q1 2026, but remains optimistic about long-term growth [47] Question: What updates can be provided regarding the recall of the Mega? - The recall was recognized in Q3 as a subsequent event, and the company is fulfilling recall requirements by reallocating battery packs [55] Question: What is the progress on in-house developed SOC and operating system? - The company has reduced development time and costs through in-house design and has open-sourced Halo OS for collaborative development [62]

Financial Data and Key Metrics Changes - In Q1 2025, total revenues were RMB 25.9 billion, up 1.1% year over year but down 41.4% quarter over quarter [17] - Vehicle sales contributed RMB 24.7 billion, an increase of 1.8% year over year but a decrease of 22.1% quarter over quarter [18] - Gross profit was RMB 5.3 billion, up 0.6% year over year but down 40.7% quarter over quarter [18] - Vehicle margin improved to 90.8% from 90.3% year over year, while gross margin was 20.5%, slightly down from 20.6% year over year [19] - Net income was RMB 89.1 million, up 9.4% year over year but down 81.7% quarter over quarter [21] Business Line Data and Key Metrics Changes - The company delivered over 92,000 vehicles in Q1 2025, a 15.5% increase year over year [8] - The new Li Mega Home model accounted for over 90% of Li Mega orders since its launch, indicating strong market acceptance [10] - The company plans to increase production capacity to achieve 2,500 to 3,000 monthly deliveries by July [11] Market Data and Key Metrics Changes - Li Auto held a 14.1% market share in the RMB 200,000 and above NEV market in April 2025, reinforcing its leadership position [9] - The overall NEV market over RMB 200,000 is expected to reach approximately 3.8 million units in 2025, with 2.1 million being BEVs [36][46] Company Strategy and Development Direction - The company aims to become a top-tier player in the premium BEV market, with a robust pipeline for new models [11] - Li Auto is expanding its sales and servicing network, targeting growth in Tier four and Tier five cities through the STAR program [16][48] - The company is committed to enhancing its competitive edge in the charging network, planning to deploy over 2,500 supercharging stations by June [12] Management Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving monthly deliveries of the new L series returning to 50,000 units soon [27] - The company anticipates Q2 2025 deliveries to be between 123,000 to 128,000 units, reflecting a year-over-year increase [11][23] - Management emphasized a user-centric approach driven by innovation to enhance product strength and user satisfaction [16] Other Important Information - Li Auto has built the largest urban highway supercharging network in China, covering over 50,000 kilometers of highways [12] - The company is actively developing its ADAS technology, with plans to launch the VLA driver model in July [14][64] Q&A Session Summary Question: How will Li Auto maintain sales growth against aggressive competition? - Management reported that the new L series has shown healthy growth, with weekly sales exceeding 10,000 units and a market share of 14.7% in the NEV market [27] Question: When will Li Auto consider selling sedans? - Management indicated that after reaching a revenue scale of RMB 300 billion, they will review market conditions and user demand for launching sedan models [29] Question: What is the intelligence level of Li HelloOS and its cost implications? - Management highlighted strong interest in HaloOS from various industry players, which is expected to enhance cost efficiency and product iteration [33] Question: What are the key selling points of the upcoming i8 model? - The i8 will feature innovative styling, high voltage charging technology, and is expected to be a top choice for NEV owners looking to upgrade [42] Question: What is the outlook for the export business? - Management stated that entering overseas markets is part of their long-term strategy, aiming for 30% of overall sales to come from international markets [58]