Core Insights - Li Auto is undergoing a strategic reset focused on enhancing its direct sales network, launching new flagship products, and investing in AI technologies [5] Group 1: Store Operations and Sales Strategy - The store partner program launched on March 1 aims to maintain direct sales while giving store managers more autonomy and profit-sharing opportunities, with expectations for significant improvements in sales and operations starting in Q3 [1] - Management refuted rumors of closing up to 100 stores, emphasizing a strategy of quality over quantity and plans to open new stores in premium locations while increasing density in higher-tier cities [2] - Since Q3 of the previous year, Li Auto has improved store rollout quality and operations, consolidating its sales force and focusing on higher-potential locations, which has led to better productivity and sales per employee [3] Group 2: Product Development and Technology - The new L9 lineup is set to launch in Q2, featuring advanced technologies such as an 800-volt architecture and a next-generation range extender system aimed at regaining leadership in the flagship SUV segment [6] - The Li L9 Livis will be priced at CNY 559,800 and will include innovative features like a fully drive-by-wire chassis and an 800-volt active suspension system, along with in-house developed M100 chips that enhance computing power [8] - Li Auto is addressing supply constraints for the Li i6 and plans to increase production capacity, with improving user satisfaction metrics and a significant increase in orders for the Li L8 [9] Group 3: Financial Performance and Guidance - In Q4, total revenue was RMB 28.8 billion, down 35% year-over-year but up 5.2% sequentially, with vehicle sales revenue at RMB 27.3 billion, reflecting a 36.1% year-over-year decline [17] - Gross profit for Q4 was RMB 5.1 billion, down 42.8% year-over-year, with a vehicle margin of 16.8% compared to 19.7% a year earlier [18] - For Q1 2026, Li Auto expects deliveries of 85,000 to 90,000 vehicles and total revenue between RMB 20.4 billion and RMB 21.6 billion [22] Group 4: R&D and AI Strategy - Li Auto plans to maintain a strong focus on AI, with R&D spending for 2025 totaling CNY 11.3 billion, half of which is allocated to AI initiatives [13] - A major internal R&D reorganization was implemented to enhance efficiency in developing autonomous driving technologies, improving iteration speed from bi-weekly to daily [14] - The M100 chip has entered mass production, expected to enhance computing capabilities and reduce costs by eliminating previous components [15] Group 5: Future Outlook and Market Strategy - Management aims for 20% year-over-year growth in 2026, acknowledging a competitive environment with many new vehicle launches in the CNY 200,000-and-above segment [23] - The company is responding to raw material cost inflation through supply chain collaboration and long-term agreements to secure pricing and volumes [24] - Li Auto recognizes share buybacks as a potential tool for enhancing shareholder value but has no immediate plans to disclose further information [25]

Financial Data and Key Metrics Changes - Total revenues in Q4 2025 were RMB 28.8 billion, down 35% year-over-year but up 5.2% quarter-over-quarter [17] - Vehicle sales contributed RMB 27.3 billion, down 36.1% year-over-year and up 5.4% quarter-over-quarter [17] - Gross profit in Q4 was RMB 5.1 billion, down 42.8% year-over-year but up 14.8% quarter-over-quarter [18] - Vehicle margin decreased to 16.8% from 19.7% year-over-year [18] - Operating expenses were RMB 5.6 billion, up 5.8% year-over-year [19] - Net income was RMB 20.2 million, down from RMB 3.5 billion in the same period last year [21] - Cash position at year-end was RMB 101.2 billion [22] Business Line Data and Key Metrics Changes - The Li L8 saw a 33% increase in orders since March compared to February, and a 179% increase compared to January [11] - The Li i6 production ramp-up has stabilized, with expectations of steady monthly sales around 20,000 units [52] Market Data and Key Metrics Changes - Li Auto's NPS for the Li L8 ranked number one among all large SUVs in a recent survey [11] - The company expects deliveries in Q1 2026 to be between 85,000 and 90,000 vehicles [22] Company Strategy and Development Direction - The company is focusing on quality over quantity in store expansion, prioritizing top-tier shopping malls [26] - A new store partner program was launched to empower store managers with decision-making power and profit-sharing [27] - The all-new Li L9 lineup is set to launch in Q2 2026, featuring significant technological upgrades [8][9] - The company aims to transition from a smart EV company to an embodied AI company, enhancing its competitive position [12] Management's Comments on Operating Environment and Future Outlook - Management acknowledged challenges in profitability across the auto retail industry but emphasized the importance of developing capable store managers [8] - The company is optimistic about the upcoming product launches and expects to see benefits from its direct sales model [38] - Management highlighted the importance of AI investments and the integration of AI into their product offerings [13][39] Other Important Information - R&D spending in 2025 totaled RMB 11.3 billion, with approximately 50% allocated to AI-related initiatives [13] - The company plans to maintain R&D expenses around RMB 12 billion in 2026, with a similar focus on AI [48] Q&A Session Summary Question: Plans for channel optimization and store partner mechanism - Management clarified that the rumor about closing 100 stores is false, focusing instead on optimizing underperforming locations [26] - The new store partner program aims to empower store managers and improve operational accountability [28] Question: Launch timeline and competitiveness of the new Li L9 - The all-new Li L9 is set to launch in Q2 2026, featuring advanced technology and a focus on understanding the physical world for autonomous driving [32] Question: Sales volume target for 2026 and balancing volume with margins - The company aims for a 20% year-on-year growth in 2026, supported by a direct sales model and the launch of new products [38] Question: Strategy for raw material cost inflation - The company is strengthening supply chain collaboration and locking in prices with long-term agreements to manage cost pressures [41][42] Question: Share buyback plans - Currently, there are no specific plans for share buybacks, but the company recognizes it as a potential tool for enhancing shareholder value [47] Question: R&D expense guidance for 2026 - R&D expenses are expected to remain around RMB 12 billion, with a continued focus on AI-related initiatives [48] Question: Details on Li i6 and Li i8 orders and production ramp-up - The Li i6 has stabilized in production, with expectations of steady sales, while the Li L8 has seen a significant increase in orders [52]

Financial Data and Key Metrics Changes - Total revenues in Q4 2025 were RMB 28.8 billion, down 35% year-over-year but up 5.2% quarter-over-quarter [17] - Vehicle sales contributed RMB 27.3 billion, down 36.1% year-over-year and up 5.4% quarter-over-quarter, primarily due to lower vehicle deliveries [17] - Gross profit for Q4 was RMB 5.1 billion, down 42.8% year-over-year but up 14.8% quarter-over-quarter, with a vehicle margin of 16.8% compared to 19.7% in the same period last year [18] - Operating expenses were RMB 5.6 billion, up 5.8% year-over-year and down 1.3% quarter-over-quarter [19] - Net income for Q4 was RMB 20.2 million, a significant decrease from RMB 3.5 billion in the same period last year [21] Business Line Data and Key Metrics Changes - The company is focusing on improving store rollout quality and strengthening day-to-day store operations, with a new store partner program launched to enhance sales efficiency [6][7] - The new Li L9 lineup is set to launch in Q2 2026, featuring significant technological upgrades aimed at regaining leadership in the flagship SUV segment [8][9] Market Data and Key Metrics Changes - The Li L8's Net Promoter Score (NPS) has increased by over 20%, ranking number one in NPS among all large SUVs according to J.D. Power [11] - Orders for the Li L8 have increased by 33% compared to February and 179% compared to January, indicating a recovery in demand [11] Company Strategy and Development Direction - The company is transitioning from a smart EV company to an embodied AI company, with a focus on technology and product innovation [12] - R&D spending totaled RMB 11.3 billion in 2025, with approximately 50% allocated to AI-related initiatives, which will continue in 2026 [13] - The company aims to enhance its competitive positioning through a combination of supply chain collaboration, long-term agreements, and rational pricing strategies [43][44] Management's Comments on Operating Environment and Future Outlook - Management acknowledges the challenges in profitability across the auto retail industry but emphasizes the importance of developing capable store managers to drive sales [8] - The company expects deliveries in Q1 2026 to be between 85,000 and 90,000 vehicles, with total revenue projected between RMB 20.4 billion and RMB 21.6 billion [22][23] Other Important Information - The company is committed to maintaining a direct sales model to ensure consistent service quality and a unified pricing strategy [27] - The new store partner program aims to empower store managers with decision-making power and profit-sharing, enhancing accountability and operational efficiency [28] Q&A Session Summary Question: Plans for channel optimization and store closures - Management clarified that the rumor about closing 100 stores is false, emphasizing a focus on quality over quantity in store operations [26] Question: Details on the new product launch and pricing strategy - The all-new Li L9 is set to launch in Q2 2026, with a focus on technological advancements and competitive pricing [32] Question: Sales volume target for 2026 and balancing volume with margins - The company aims for a 20% year-on-year growth in 2026, supported by a direct sales model and the launch of new L-series products [38] Question: Strategy to address raw material cost inflation - The company is strengthening supply chain collaboration and driving end-to-end cost optimizations to manage raw material cost pressures [41][42] Question: Consideration of share buybacks - Management acknowledged that share buybacks are a tool to enhance shareholder value but currently has no additional information to disclose [47] Question: Guidance for R&D expenses in 2026 - R&D expenses are expected to remain around RMB 12 billion, with AI-related initiatives accounting for about half of the cost [48] Question: Details on Li i6 and Li i8 orders and production ramp-up - The company has resolved supply chain bottlenecks for the Li i6 and expects steady monthly sales of around 20,000 units [52]