Li Auto Inc. Announces Unaudited Second Quarter 2021 Financial Results

Quarterly total revenues reached RMB5.04 billion (US$780.4 million)1

Quarterly deliveries reached 17,575 vehicles

Quarterly gross margin reached 18.9%

BEIJING, China, August 30, 2021 - Li Auto Inc. ("Li Auto" or the "Company") (Nasdaq: LI; HKEX: 2015), an innovator in China's new energy vehicle market, today announced its unaudited financial results for the quarter ended June 30, 2021.

Operating Highlights for the Second Quarter of 2021

  • Deliveries of Li ONEs were 17,575 vehicles in the second quarter of 2021, representing a 166.1% year-over-year increase.

2020 Q2

2020 Q3

2020 Q4

2021 Q1

2021 Q2

Deliveries

6,604

8,660

14,464

12,579

17,575

  • As of June 30, 2021, the Company had 97 retail stores covering 64 cities and 167 servicing centers and Li Auto-authorized body and paint shops operating in 127 cities.

Financial Highlights for the Second Quarter of 2021

  • Vehicle sales were RMB4.90 billion (US$759.4 million) in the second quarter of 2021, representing an increase of 41.6% from RMB3.46 billion in the first quarter of 2021.
  • Vehicle margin2 was 18.7% in the second quarter of 2021, compared with 16.9% in the first quarter of 2021.
  • Total revenues were RMB5.04 billion (US$780.4 million) in the second quarter of 2021, representing an increase of 40.9% from RMB3.58 billion in the first quarter of 2021.
  • Gross profit was RMB952.8 million (US$147.6 million) in the second quarter of 2021, representing an increase of 54.5% from RMB616.7 million in the first quarter of 2021.
  • Gross margin was 18.9% in the second quarter of 2021, compared with 17.3% in the first quarter of 2021.
  • All translations from Renminbi("RMB") to U.S. dollar("US$") are made at a rate of RMB 6.4566 to US$1.00, the noon buying rate in effect on June 30, 2021 as set forth in the H.10 statistical release of the Federal Reserve Board.
  • Vehicle margin is the margin of vehicle sales, which is calculated based on revenues and cost of sales derived from vehicle sales only.

1

  • Loss from operations was RMB535.9 million (US$83.0 million) in the second quarter of 2021, representing an increase of 31.4% from RMB407.7 million in the first quarter of 2021. Non-GAAPloss from operations3 was RMB365.5 million (US$56.6 million) in the second quarter of 2021, representing an increase of 62.6% from RMB224.8 million in the first quarter of 2021.
  • Net loss was RMB235.5 million (US$36.5 million) in the second quarter of 2021, representing a decrease of 34.6% from RMB360.0 million net loss in the first quarter of 2021. Non-GAAPnet loss3 was RMB65.1 million (US$10.1 million) in the second quarter of 2021, compared with RMB177.0 million net loss in the first quarter of 2021.
  • Operating cash flow was RMB1,407.6 million (US$218.0 million) in the second quarter of 2021, representing an increase of 52.0% from RMB926.3 million in the first quarter of 2021.
  • Free cash flow4 was RMB982.1 million (US$152.1 million) in the second quarter of 2021, representing an increase of 72.2% from RMB570.2 million in the first quarter of 2021.
  • The Company's Non-GAAP financial measures exclude share-based compensation expenses, changes in fair value of warrants and derivative liabilities, accretion on convertible redeemable preferred shares to redemption value, and the effect of exchange rate changes on convertible redeemable preferred shares. See "Unaudited Reconciliation of GAAP and Non-GAAP Results" set forth at the end of this press release.
  • Free cash flow represents operating cash flow less capital expenditures. 2

Key Financial Results

(in millions, except for percentages)

For the Three Months Ended

% Change5

June 30, 2020

March 31, 2021

June 30, 2021

YoY

QoQ

RMB

RMB

RMB

Vehicle sales

1,919.2

3,463.7

4,903.3

155.5%

41.6%

Vehicle margin

13.7%

16.9%

18.7%

5.0%

1.8%

Total revenues

1,947.2

3,575.2

5,039.0

158.8%

40.9%

Gross profit

259.7

616.7

952.8

266.9%

54.5%

Gross margin

13.3%

17.3%

18.9%

5.6%

1.6%

Loss from operations

(176.3)

(407.7)

(535.9)

204.0%

31.4%

Non-GAAP loss from operations

(176.3)

(224.8)

(365.5)

107.3%

62.6%

Net loss

(75.2)

(360.0)

(235.5)

213.2%

(34.6)%

Non-GAAP net loss

(159.2)

(177.0)

(65.1)

(59.1)%

(63.2)%

Operating cash flow

451.7

926.3

1,407.6

211.6%

52.0%

Free cash flow

300.8

570.2

982.1

226.5%

72.2%

Recent Developments

Deliveries Update

  • In July 2021, the Company delivered 8,589 Li ONEs, representing a 251.3% increase from July 2020. As of July 31, 2021, the Company had 109 retail stores covering 67 cities, in addition to 176 servicing centers and Li Auto-authorized body and paint shops operating in 134 cities.

Hong Kong Dual Primary Listing

  • On August 12, 2021, the Company successfully completed its global offering (the "Global Offering") and dual primary listing of Class A ordinary shares on the Main Board of The Stock Exchange of Hong Kong Limited (the "Hong Kong Stock Exchange") under the stock code "2015." The net proceeds from the Global Offering, after deducting underwriting discounts and commissions and estimated offering expenses payable by the Company, were HK$11.6 billion (US$1.5 billion), assuming no exercise of the option to purchase additional Class A ordinary shares.
  • The Company plans to use the net proceeds from the Global Offering for research and development of HPC BEV technologies, platforms, and future models, intelligent vehicle and autonomous driving technologies, and future EREV models; expansion of production capacity, retail stores, delivery and servicing centers, roll-out of HPC network, and marketing and promotion; and working capital and other general corporate purposes.

Collaboration in New Production Base

  • In July 2021, the Company signed a memorandum of understanding with a local company for collaboration in a reconstruction and expansion project of an automobile manufacturing plant in Shunyi District, Beijing, China.

Investment Agreement

  • On August 27, 2021, the Company signed an investment agreement with a wholly-owned subsidiary of Xinchen China Power Holdings Limited relating to the formation of a company to be held in the majority by the Company in Mianyang, Sichuan Province, China, to develop and manufacture a next generation range extension system for the Company.
  • Except for vehicle margin and gross margin, where absolute changes instead of percentage changes are presented.

3

CEO and CFO Comments

Mr. Xiang Li, founder, chairman, and chief executive officer of Li Auto, commented, "Our remarkable second quarter results reflect the undeniable strength and appeal of our Li ONE. The 2021 Li ONE received rave reviews and strong endorsement from users, contributing to our second quarter deliveries of 17,575 vehicles and July deliveries of 8,589 vehicles, resulting in cumulative deliveries of over 70,000 vehicles. We are also excited to share that Li ONE topped sales charts in the large SUV and new energy SUV categories in July, making us a leading domestic NEV manufacturer in China."

"We have achieved outstanding performance in the second quarter, with total revenues hitting a record high of RMB5.04 billion, up 158.8% from the same period last year and an increase of 40.9% from RMB3.58 billion of last quarter, mainly driven by higher deliveries. Our vehicle margin reached 18.7% this quarter, up 5.0 percentage points year over year, and gross margin stood at 18.9%, demonstrating our consistently effective cost management approach," added Mr. Tie Li, Li Auto's chief financial officer. "With the completion of our global offering and dual primary listing, we successfully raised over US$1.5 billion in net proceeds, positioning us well for future growth. We expect our enhanced product lineup and increased deliveries following production ramp-up to help us continue to deliver strong results."

Financial Results for the Second Quarter of 2021

Revenues

  • Total revenues were RMB5.04 billion (US$780.4 million) in the second quarter of 2021, representing an increase of 40.9% from RMB3.58 billion in the first quarter of 2021.
  • Vehicle sales were RMB4.90 billion (US$759.4 million) in the second quarter of 2021, representing an increase of 41.6% from RMB3.46 billion in the first quarter of 2021. The increase in revenue from vehicle sales from the first quarter of 2021 was mainly attributable to the increase in delivery of the 2021 Li ONE since its release on May 25, 2021.
  • Other sales and services were RMB135.7 million (US$21.0 million) in the second quarter of 2021, representing an increase of 21.7% from RMB111.5 million in the first quarter of 2021. The increase in revenue from other sales and services over the first quarter of 2021 was mainly attributable to increased sales of charging stalls, accessories and services in line with higher accumulated vehicle sales.

Cost of Sales and Gross Margin

  • Cost of sales was RMB4.09 billion (US$632.9 million) in the second quarter of 2021, representing an increase of 38.2% from RMB2.96 billion in the first quarter of 2021.
  • Gross profit was RMB952.8 million (US$147.6 million) in the second quarter of 2021, representing an increase of 54.5% from RMB616.7 million in the first quarter of 2021.
  • Vehicle margin was 18.7% in the second quarter of 2021, compared with 16.9% in the first quarter of 2021. The increase in vehicle margin from the first quarter of 2021 was primarily driven by higher average selling price in the second quarter of 2021 due to our launch of the 2021 Li ONE in late May.
  • Gross margin was 18.9% in the second quarter of 2021, compared with 17.3% in the first quarter of 2021, mainly driven by the increase of vehicle margin.

4

Operating Expenses

  • Operating expenses were RMB1.49 billion (US$230.6 million) in the second quarter of 2021, representing an increase of 45.3% from RMB1.02 billion in the first quarter of 2021.
  • Research and development expenses were RMB653.4 million (US$101.2 million) in the second quarter of 2021, representing an increase of 27.0% from RMB514.5 million in the first quarter of 2021. Non-GAAPresearch and development expenses3 were RMB543.7 million (US$84.2 million) in the second quarter of 2021, representing an increase of 36.6% from RMB397.9 million in the first quarter of 2021. The increase in research and development expenses over the first quarter of 2021 was primarily attributable to increased headcount and increased research and development activities for the Company's next vehicle models.
  • Selling, general and administrative expenses were RMB835.3 million (US$129.4 million) in the second quarter of 2021, representing an increase of 63.8% from RMB509.9 million in the first quarter of 2021. Non-GAAPselling, general and administrative expenses3 were RMB780.9 million (US$120.9 million) in the second quarter of 2021, representing an increase of 73.6% from RMB449.8 million in the first quarter of 2021. The increase in selling, general and administrative expenses over the first quarter of 2021 was primarily driven by increased marketing and promotional activities, as well as increased headcount and rental expense with the expansion of the Company's distribution network.

Loss from Operations

  • Loss from operations was RMB535.9 million (US$83.0 million) in the second quarter of 2021, representing an increase of 31.4% from RMB407.7 million in the first quarter of 2021. Non-GAAPloss from operations was RMB365.5 million (US$56.6 million) in the second quarter of 2021, representing an increase of 62.6% from RMB224.8 million in the first quarter of 2021.

Net Loss and Loss Per Share

  • Net loss was RMB235.5 million (US$36.5 million) in the second quarter of 2021, compared with RMB360.0 million net loss in the first quarter of 2021. Non-GAAPnet loss was RMB65.1 million (US$10.1 million) in the second quarter of 2021, compared with RMB177.0 million net loss in the first quarter of 2021.
  • Basic and diluted net loss per ADS6 attributable to ordinary shareholders were both RMB0.26 (US$0.04) in the second quarter of 2021. Non-GAAP basic and diluted net loss per ADS attributable to ordinary shareholders3 were both RMB0.07 (US$0.01) in the second quarter of 2021.

Cash Position, Operating Cash Flow and Free Cash Flow

  • Balance of cash and cash equivalents, restricted cash, time deposits and short-term investments was RMB36.53 billion (US$5.66 billion) as of June 30, 2021.
  • Operating cash flow was RMB1,407.6 million (US$218.0 million) in the second quarter of 2021, representing an increase of 52.0% from RMB926.3 million in the first quarter of 2021.
  • Free cash flow was RMB982.1 million (US$152.1 million) in the second quarter of 2021, representing an increase of 72.2% from RMB570.2 million in the first quarter of 2021.
  • Each ADS represents two Class A ordinary shares.

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Li Auto Inc. published this content on 30 August 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 30 August 2021 09:41:07 UTC.