BEIJING, November 10 (TMTPOST) – Nasdaq-listed Chinese electrical vehicle (EV) maker Li Auto delivered 105,000 vehicles in the third quarter of 2023, nearly four times as many as that in the same period of 2022, according to its quarterly financial report released on Thursday night.
The EV maker posted 34.68 billion yuan in revenue, with a year-on-year increase of 271.2%. The company reported operating profit and net profit of 2.34 billion yuan and 2.81 billion yuan respectively for the third quarter. This marks Li Auto's fourth consecutive profitable quarter.
Founded in 2015, Li Auto is one of the leading new energy vehicle makers in China and offers three vehicle models.
Li Auto's market share in the new energy vehicle (above 200,000 yuan) market expanded from 10.9% in the first quarter and 13.7% in the second quarter of 2023 to 15.4% in the third quarter, according to Li Auto CEO Li Xiang during the earnings conference call on the same day.
Li Auto's financial situation remains robust as a result of its increased sales. In the third quarter, the company's free cash flow was 13.22 billion yuan, with a cash reserve of 88.52 billion yuan as of the end of the third quarter. The vehicle gross profit margin for the quarter was 21.2%, with an overall gross profit margin of 22%. CFO Li Tie said during the earnings call that the company aims to maintain a gross profit margin of over 20% in the future to support long-term R&D investments.
The next business focus of Li Auto's R&D is intelligent driving. Ma Donghui, the president and chief engineer of the company, revealed that it currently has around 900 R&D personnel in intelligent driving, and the number is expected to reach 2,000 by the end of 2024 and exceed 2,500 by 2025.
According to Ma, Li Auto's commitment can be seen in the scale of investments in human resources. The company plans to roll out a new version of the intelligent driving system to users who purchased the highest configuration -- Max version in December 2023. By then, the vehicle can provide comprehensive and advanced assisted driving. Li Auto also plans to release a new version of the system to users who purchased other configuration models by the first half of 2024. "We are confident in entering the first echelon of intelligent driving in the first half of next year," Ma said.
Li Auto's intelligent driving system is offered at no additional cost. Ma said that the company will adhere to this strategy, as having the system as standard means Li Auto will have the largest fleet of intelligent driving vehicles in China, obtaining more training data to accelerate system algorithm iterations.
In the fourth quarter of 2023, Li Auto is expected to deliver 125,000 to 128,000 units, with estimated revenue of 38.46 billion yuan to 39.38 billion yuan. It stated that after upgrading and renovating its factories, capacity bottlenecks have been resolved. The company has two factories, located in Changzhou, Jiangsu, and Beijing, respectively. The factory in Changzhou has three production lines for extended-range hybrid models, while the factory in Beijing has one production line for pure electric models.
In the fourth quarter, Li Auto will launch its first pure electric flagship model, MEGA, and plans to introduce four new models in 2024. Li Xiang said that MEGA is scheduled to be released in December 2023, with deliveries to users starting in February 2024. To support the first pure electric model, Li Auto is accelerating the deployment of a super-fast charging network. Currently, a total of 130 supercharging stations have been built along highways, and the figure is expected to increase to 300 by the end of the year, covering the Beijing-Tianjin-Hebei region, the Yangtze River Delta, the Greater Bay Area, and the Chengdu-Chongqing region.
Numerous new models emerge in the cutting-throat new energy vehicle market. After Li Auto's success with extended-range hybrid technology, several automakers have followed suit, and Huawei's HiCar poses as a formidable competitor.
In September, the Huawei-cooperated model, Wanjie M7, was redesigned and launched, receiving enthusiastic response. This model also utilizes extended-range hybrid technology. In December, Wanjie will introduce the flagship SUV model, M9. On Thursday, Huawei Terminal CEO Yu Chengdong revealed that the blind pre-orders for the M9 have already exceeded 25,000.
Regarding the market competition, Li Xi said that Li Auto, while maintaining its respect for Huawei, takes a predominantly learning-oriented approach in its competition with the company. He added, "As a startup, it is very fortunate and exciting for us to encounter such an example of a leading company with trillion-yuan revenue when we just get hundreds of billions in revenue."
Li Auto closed at $37.65 per ADS on Thursday, down 4.34%.