Li Auto Inc. (“Li Auto” or the “Company”) (Nasdaq: LI; HKEX: 2015), a leader in China’s new energy vehicle market, today announced its unaudited financial results for the quarter ended June 30, 2023.

Operating Highlights for the Second Quarter of 2023

  • Total vehicle deliveries were 86,533 units in the second quarter of 2023, representing a 201.6% year-over-year increase.
Deliveries   2023 Q2   2023 Q1   2022 Q4   2022 Q3
    86,533   52,584   46,319   26,524
                 
Deliveries   2022 Q2   2022 Q1   2021 Q4   2021 Q3
    28,687   31,716   35,221   25,116
  • As of June 30, 2023, the Company had 331 retail stores covering 127 cities, as well as 323 servicing centers and Li Auto-authorized body and paint shops operating in 223 cities.

Financial Highlights for the Second Quarter of 2023

  • Vehicle sales were RMB27.97 billion (US$3.86 billion) in the second quarter of 2023, representing an increase of 229.7% from RMB8.48 billion in the second quarter of 2022 and an increase of 52.6% from RMB18.33 billion in the first quarter of 2023.
  • Vehicle margin2 was 21.0% in the second quarter of 2023, compared with 21.2% in the second quarter of 2022 and 19.8% in the first quarter of 2023.
  • Total revenues were RMB28.65 billion (US$3.95 billion) in the second quarter of 2023, representing an increase of 228.1% from RMB8.73 billion in the second quarter of 2022 and an increase of 52.5% from RMB18.79 billion in the first quarter of 2023.
  • Gross profit was RMB6.24 billion (US$859.9 million) in the second quarter of 2023, representing an increase of 232.0% from RMB1.88 billion in the second quarter of 2022 and an increase of 62.8% from RMB3.83 billion in the first quarter of 2023.
  • Gross margin was 21.8% in the second quarter of 2023, compared with 21.5% in the second quarter of 2022 and 20.4% in the first quarter of 2023.
  • Income from operations was RMB1.63 billion (US$224.2 million) in the second quarter of 2023, compared with RMB978.5 million loss from operations in the second quarter of 2022 and representing an increase of 301.3% from RMB405.2 million income from operations in the first quarter of 2023. Non-GAAP income from operations3 was RMB2.04 billion (US$281.8 million) in the second quarter of 2023, compared with RMB520.8 million non-GAAP loss from operations in the second quarter of 2022 and representing an increase of 130.8% from RMB885.4 million non-GAAP income from operations in the first quarter of 2023.
  • Net income was RMB2.31 billion (US$318.6 million) in the second quarter of 2023, compared with RMB641.0 million net loss in the second quarter of 2022 and representing an increase of 147.4% from RMB933.8 million net income in the first quarter of 2023. Non-GAAP net income3 was RMB2.73 billion (US$376.1 million) in the second quarter of 2023, compared with RMB183.4 million non-GAAP net loss in the second quarter of 2022 and an increase of 92.9% from RMB1.41 billion non-GAAP net income in the first quarter of 2023.
  • Net cash provided by operating activities was RMB11.11 billion (US$1.53 billion) in the second quarter of 2023, compared with RMB1.13 billion net cash provided by operating activities in the second quarter of 2022 and an increase of 42.8% from RMB7.78 billion net cash provided by operating activities in the first quarter of 2023.
  • Free cash flow4 was RMB9.62 billion (US$1.33 billion) in the second quarter of 2023, compared with RMB451.7 million free cash flow in the second quarter of 2022 and representing an increase of 43.6% from RMB6.70 billion free cash flow in the first quarter of 2023.
Key Financial Results(in millions, except for percentages)          
  For the Three Months Ended   % Change5    
  June 30, 2022   March 31, 2023   June 30, 2023   YoY   QoQ  
  RMB   RMB   RMB          
Vehicle sales 8,483.6   18,327.3   27,971.9   229.7%   52.6%  
Vehicle margin 21.2%   19.8%   21.0%   (0.2)%   1.2%  
                     
Total revenues 8,732.6   18,787.1   28,652.7   228.1%   52.5%  
Gross profit 1,878.3   3,830.1   6,235.3   232.0%   62.8%  
Gross margin 21.5%   20.4%   21.8%   0.3%   1.4%  
                     
(Loss)/income from operations (978.5)   405.2   1,625.9   N/A   301.3%  
Non-GAAP (loss)/income from operations (520.8)   885.4   2,043.3   N/A   130.8%  
                     
Net (loss)/income (641.0)   933.8   2,310.1   N/A   147.4%  
Non-GAAP net (loss)/income (183.4)   1,414.1   2,727.5   N/A   92.9%  
                     
Operating cash flow 1,129.4   7,780.4   11,112.4   N/A   42.8%  
Free cash flow (non-GAAP) 451.7   6,702.1   9,621.4   N/A   43.6%  

Recent Developments

Delivery Update

  • In July 2023, the Company delivered 34,134 vehicles, representing an increase of 227.5% from July 2022. As of July 31, 2023, the Company had 337 retail stores covering 128 cities, in addition to 323 servicing centers and Li Auto-authorized body and paint shops operating in 222 cities.

Family Tech Day

  • On June 17, 2023, the Company hosted a Family Tech Day where it announced its plan to unveil its super flagship 5C BEV model, Li MEGA, by the end of 2023, and presented the optimization of battery cells and thermal management system as well as its 5C super charging network deployment to enable 5C charging capability. The Company also showcased its technological advancements for smart space and autonomous driving, and introduced its roll-out plans for city NOA and commute NOA. Both city NOA and commute NOA were launched for test drives in June 2023, and are expected to be released to 100 cities nationwide by the end of 2023.

Li L9 Pro

  • On August 3, 2023, the Company launched the Pro trim of Li L9 to cater to a wider range of family users. Li L9 Pro comes standard with the Li AD Pro autonomous driving system powered by a Horizon Robotics Journey 5 chip and the SS Max+ smart space system. The retail price for Li L9 Pro is RMB429,800.

At-The-Market Offering

  • On June 28, 2022, the Company announced an at-the-market offering program (the “ATM Offering”) to sell up to US$2,000,000,000 of American depositary shares (“ADSs”), each representing two Class A ordinary shares of the Company.As of the date of this press release, the Company has sold 9,480,014 ADSs representing 18,960,028 Class A ordinary shares of the Company under the ATM Offering, raising gross proceeds of US$368.3 million before deducting fees and commissions payable to the distribution agents of up to US$4.8 million and certain other offering expenses.

CEO and CFO Comments

Mr. Xiang Li, chairman and chief executive officer of Li Auto, commented, “We crossed the 30,000 monthly delivery milestone in June, closing the second quarter with an all-time high vehicle delivery, while all of the three Li L series models maintained sales leadership in their respective categories. These accomplishments solidified our standing as the preferred premium brand for families, firmly positioning us to achieve the revenue target of RMB100 billion in 2023. Facing the competitive market dynamics in China’s NEV industry, in the second quarter we achieved our highest-ever profitability while continuing to strengthen our competitive advantage through ongoing investments in research and development and business expansion, as well as improvements in our organizational processes and operational capabilities.”

“In June, we launched China’s first city NOA and commute NOA independent of high-definition maps for test drives, showcasing their outstanding abilities to perceive, plan, and control in complex urban traffic environments. Furthermore, our super flagship 5C BEV model, Li MEGA, is scheduled to be unveiled in the fourth quarter of this year. Embodying our latest technological advancements in electrification and intelligentization, we are confident that Li MEGA will become a new sales blockbuster in the RMB500,000 and higher price segment. As a growth-driven organization, we will relentlessly explore and train ourselves to achieve further developments while building products and services that exceed user needs.”

Mr. Tie Li, chief financial officer of Li Auto, added, “We had a strong showing in the second quarter, setting new records across revenue, net income, and free cash flow. Specifically, we grew our revenue by 228.1% year-over-year to RMB28.65 billion, fueled by the significant increase in vehicle deliveries. We achieved net income of RMB2.31 billion while recording free cash flow of RMB9.62 billion. The robust financial performance empowers the Company to deepen its commitment to research and development and accelerate business expansion as we strive to deliver greater value to our users, shareholders and society as a whole.”

Financial Results for the Second Quarter of 2023

Revenues

  • Total revenues were RMB28.65 billion (US$3.95 billion) in the second quarter of 2023, representing an increase of 228.1% from RMB8.73 billion in the second quarter of 2022 and an increase of 52.5% from RMB18.79 billion in the first quarter of 2023.
  • Vehicle sales were RMB27.97 billion (US$3.86 billion) in the second quarter of 2023, representing an increase of 229.7% from RMB8.48 billion in the second quarter of 2022. The increase in vehicle sales over the second quarter of 2022 was mainly attributable to the increase in vehicle deliveries. The increase of 52.6% from RMB18.33 billion in the first quarter of 2023 was mainly attributable to the increase in vehicle deliveries, partially offset by the lower average selling price due to different product mix between two quarters.
  • Other sales and services were RMB680.8 million (US$93.9 million) in the second quarter of 2023, representing an increase of 173.4% from RMB249.0 million in the second quarter of 2022 and an increase of 48.1% from RMB459.7 million in the first quarter of 2023. The increase in revenue from other sales and services over the second quarter of 2022 and the first quarter of 2023 was mainly attributable to the increased sales of accessories and provision of services, which is in line with higher accumulated vehicle sales, and the increased sales of charging stalls, which is in line with higher vehicle deliveries.

Cost of Sales and Gross Margin

  • Cost of sales was RMB22.42 billion (US$3.09 billion) in the second quarter of 2023, representing an increase of 227.1% from RMB6.85 billion in the second quarter of 2022 and an increase of 49.9% from RMB14.96 billion in the first quarter of 2023. The increase in cost of sales over the second quarter of 2022 and the first quarter of 2023 was mainly attributable to the increase in vehicle deliveries.
  • Gross profit was RMB6.24 billion (US$859.9 million) in the second quarter of 2023, representing an increase of 232.0% from RMB1.88 billion in the second quarter of 2022 and an increase of 62.8% from RMB3.83 billion in the first quarter of 2023.
  • Vehicle margin was 21.0% in the second quarter of 2023, compared with 21.2% in the second quarter of 2022 and 19.8% in the first quarter of 2023. Excluding the impact of Li ONE, the vehicle margin of the Li L series remained stable over the first quarter of 2023.
  • Gross margin was 21.8% in the second quarter of 2023, compared with 21.5% in the second quarter of 2022 and 20.4% in the first quarter of 2023.

Operating Expenses

  • Operating expenses were RMB4.61 billion (US$635.7 million) in the second quarter of 2023, representing an increase of 61.4% from RMB2.86 billion in the second quarter of 2022 and an increase of 34.6% from RMB3.42 billion in the first quarter of 2023.
  • Research and development expenses were RMB2.43 billion (US$334.5 million) in the second quarter of 2023, representing an increase of 58.4% from RMB1.53 billion in the second quarter of 2022 and an increase of 31.0% from RMB1.85 billion in the first quarter of 2023. The increase in research and development expenses over the second quarter of 2022 and the first quarter of 2023 was primarily driven by increased employee compensation as a result of our growing number of staff as well as increased expenses to support our expanding product portfolios and technologies.
  • Selling, general and administrative expenses were RMB2.31 billion (US$318.5 million) in the second quarter of 2023, representing an increase of 74.3% from RMB1.33 billion in the second quarter of 2022 and an increase of 40.4% from RMB1.65 billion in the first quarter of 2023. The increase in selling, general and administrative expenses over the second quarter of 2022 and the first quarter of 2023 was primarily driven by increased employee compensation as a result of our growing number of staff as well as increased rental expenses associated with the expansion of our sales and servicing network.

Income/(Loss) from Operations

  • Income from operations was RMB1.63 billion (US$224.2 million) in the second quarter of 2023, compared with RMB978.5 million loss from operations in the second quarter of 2022 and representing an increase of 301.3% from RMB405.2 million income from operations in the first quarter of 2023. Non-GAAP income from operations was RMB2.04 billion (US$281.8 million) in the second quarter of 2023, compared with RMB520.8 million non-GAAP loss from operations in the second quarter of 2022 and representing an increase of 130.8% from RMB885.4 million non-GAAP income from operations in the first quarter of 2023.

Net Income/(Loss) and Net Earnings/(Loss) Per Share

  • Net income was RMB2.31 billion (US$318.6 million) in the second quarter of 2023, compared with RMB641.0 million net loss in the second quarter of 2022 and representing an increase of 147.4% from RMB933.8 million net income in the first quarter of 2023. Non-GAAP net income was RMB2.73 billion (US$376.1 million) in the second quarter of 2023, compared with RMB183.4 million non-GAAP net loss in the second quarter of 2022 and an increase of 92.9% from RMB1.41 billion non-GAAP net income in the first quarter of 2023.
  • Basic and diluted net earnings per ADS6 attributable to ordinary shareholders were RMB2.34 (US$0.32) and RMB2.18 (US$0.30) in the second quarter of 2023, respectively, compared with RMB0.64 for both basic and diluted net loss per ADS attributable to ordinary shareholders in the second quarter of 2022, and RMB0.95 and RMB0.89 basic and diluted net earnings per ADS attributable to ordinary shareholders in the first quarter of 2023, respectively. Non-GAAP basic and diluted net earnings per ADS attributable to ordinary shareholders3 were RMB2.76 (US$0.38) and RMB2.58 (US$0.36) in the second quarter of 2023, respectively, compared with RMB0.17 for both non-GAAP basic and diluted net loss per ADS attributable to ordinary shareholders in the second quarter of 2022, respectively, and RMB1.44 and RMB1.35 non-GAAP basic and diluted net earnings per ADS attributable to ordinary shareholders in the first quarter of 2023, respectively.

Cash Position, Operating Cash Flow and Free Cash Flow

  • Balance of cash and cash equivalents, restricted cash, time deposits and short-term investments was RMB73.77 billion (US$10.17 billion) as of June 30, 2023.
  • Net cash provided by operating activities was RMB11.11 billion (US$1.53 billion) in the second quarter of 2023, compared with RMB1.13 billion net cash provided by operating activities in the second quarter of 2022 and an increase of 42.8% from RMB7.78 billion net cash provided by operating activities in the first quarter of 2023.
  • Free cash flow was RMB9.62 billion (US$1.33 billion) in the second quarter of 2023, compared with RMB451.7 million free cash flow in the second quarter of 2022 and representing an increase of 43.6% from RMB6.70 billion free cash flow in the first quarter of 2023.

Business Outlook

For the third quarter of 2023, the Company expects:

  • Deliveries of vehicles to be between 100,000 and 103,000 vehicles, representing an increase of 277.0% to 288.3% from the third quarter of 2022.
  • Total revenues to be between RMB32.33 billion (US$4.46 billion) and RMB33.30 billion (US$4.59 billion), representing an increase of 246.0% to 256.4% from the third quarter of 2022.

This business outlook reflects the Company’s current and preliminary view on the business situation and market condition, which is subject to change.

Conference Call

Management will hold a conference call at 8:00 a.m. U.S. Eastern Time on Tuesday, August 08, 2023 (8:00 p.m. Beijing/Hong Kong Time on August 08, 2023) to discuss financial results and answer questions from investors and analysts.

For participants who wish to join the call, please complete online registration using the link provided below prior to the scheduled call start time. Upon registration, participants will receive the conference call access information, including dial-in numbers, passcode, and a unique access PIN. To join the conference, please dial the number provided, enter the passcode followed by your PIN, and you will join the conference instantly.

Participant Online Registration: https://s1.c-conf.com/diamondpass/10032372-jb217p.html

A replay of the conference call will be accessible through August 15, 2023, by dialing the following numbers:

United States: +1-855-883-1031
Mainland China: +86-400-1209-216
Hong Kong, China: +852-800-930-639
International: +61-7-3107-6325
Replay PIN: 10032372

Additionally, a live and archived webcast of the conference call will be available on the Company’s investor relations website at http://ir.lixiang.com.

Non-GAAP Financial Measure

The Company uses non-GAAP financial measures, such as non-GAAP cost of sales, non-GAAP research and development expenses, non-GAAP selling, general and administrative expenses, non-GAAP income/loss from operations, non-GAAP net income/loss, non-GAAP net income/loss attributable to ordinary shareholders, non-GAAP basic and diluted net earnings/loss per ADS attributable to ordinary shareholders, non-GAAP basic and diluted net earnings/loss per share attributable to ordinary shareholders and free cash flow, in evaluating its operating results and for financial and operational decision-making purposes. By excluding the impact of share-based compensation expenses, the Company believes that the non-GAAP financial measures help identify underlying trends in its business and enhance the overall understanding of the Company’s past performance and future prospects. The Company also believes that the non-GAAP financial measures allow for greater visibility with respect to key metrics used by the Company’s management in its financial and operational decision-making.

The non-GAAP financial measures are not presented in accordance with U.S. GAAP and may be different from non-GAAP methods of accounting and reporting used by other companies. The non-GAAP financial measures have limitations as analytical tools and when assessing the Company’s operating performance, investors should not consider them in isolation, or as a substitute for net loss or other consolidated statements of comprehensive loss data prepared in accordance with U.S. GAAP. The Company encourages investors and others to review its financial information in its entirety and not rely on a single financial measure.

The Company mitigates these limitations by reconciling the non-GAAP financial measures to the most comparable U.S. GAAP performance measures, all of which should be considered when evaluating the Company’s performance.

For more information on the non-GAAP financial measures, please see the table captioned “Unaudited Reconciliation of GAAP and Non-GAAP Results” set forth at the end of this press release.

Exchange Rate Information

This press release contains translations of certain Renminbi amounts into U.S. dollars at a specified rate solely for the convenience of the reader. Unless otherwise noted, all translations from Renminbi to U.S. dollars and from U.S. dollars to Renminbi are made at a rate of RMB7.2513 to US$1.00, the exchange rate on June 30, 2023, set forth in the H.10 statistical release of the Federal Reserve Board. The Company makes no representation that the Renminbi or U.S. dollars amounts referred could be converted into U.S. dollars or Renminbi, as the case may be, at any particular rate or at all.

About Li Auto Inc.

Li Auto Inc. is a leader in China’s new energy vehicle market. The Company designs, develops, manufactures, and sells premium smart electric vehicles. Its mission is: Create a Mobile Home, Create Happiness (创造移动的家, 创造幸福的家). Through innovations in product, technology, and business model, the Company provides families with safe, convenient, and comfortable products and services. Li Auto is a pioneer to successfully commercialize extended-range electric vehicles in China. The Company started volume production in November 2019. Its current model lineup includes Li L9, a six-seat flagship family SUV, Li L8, a six-seat premium family SUV, and Li L7, a five-seat flagship family SUV. The Company leverages technology to create value for its users. It concentrates its in-house development efforts on its proprietary range extension system, next-generation electric vehicle technology, and smart vehicle solutions while expanding its product line by developing new BEVs and EREVs to target a broader user base.

For more information, please visit: http://ir.lixiang.com.

Safe Harbor Statement

This press release contains statements that may constitute “forward-looking” statements pursuant to the “safe harbor” provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as “will,” “expects,” “anticipates,” “aims,” “future,” “intends,” “plans,” “believes,” “estimates,” “targets,” “likely to,” “challenges,” and similar statements. Li Auto may also make written or oral forward-looking statements in its periodic reports to the U.S. Securities and Exchange Commission (the “SEC”) and The Stock Exchange of Hong Kong Limited (the “HKEX”), in its annual report to shareholders, in press releases and other written materials, and in oral statements made by its officers, directors, or employees to third parties. Statements that are not historical facts, including statements about Li Auto’s beliefs, plans, and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties. A number of factors could cause actual results to differ materially from those contained in any forward-looking statement, including but not limited to the following: Li Auto’s strategies, future business development, and financial condition and results of operations; Li Auto’s limited operating history; risks associated with extended-range electric vehicles; Li Auto’s ability to develop, manufacture, and deliver vehicles of high quality and appeal to customers; Li Auto’s ability to generate positive cash flow and profits; product defects or any other failure of vehicles to perform as expected; Li Auto’s ability to compete successfully; Li Auto’s ability to build its brand and withstand negative publicity; cancellation of orders for Li Auto’s vehicles; Li Auto’s ability to develop new vehicles; and changes in consumer demand and government incentives, subsidies, or other favorable government policies. Further information regarding these and other risks is included in Li Auto’s filings with the SEC and the HKEX. All information provided in this press release is as of the date of this press release, and Li Auto does not undertake any obligation to update any forward-looking statement, except as required under applicable law.

For investor and media inquiries, please contact:

Li Auto Inc.Investor RelationsEmail: ir@lixiang.com

The Piacente Group, Inc.Yang SongTel: +86-10-6508-0677Email: Li@tpg-ir.com

Brandi PiacenteTel: +1-212-481-2050Email: Li@tpg-ir.com

Li Auto Inc.Unaudited Condensed Consolidated Statements of Comprehensive Income  
(All amounts in thousands, except for ADS/ordinary share and per ADS/ordinary share data)  
   
    For the Three Months Ended  
    June 30, 2022   March 31, 2023   June 30, 2023   June 30, 2023    
    RMB   RMB   RMB   US$    
Revenues:                    
Vehicle sales   8,483,612   18,327,316   27,971,944   3,857,507    
Other sales and services   249,009   459,737   680,783   93,884    
Total revenues   8,732,621   18,787,053   28,652,727   3,951,391    
Cost of sales:                    
Vehicle sales   (6,687,273)   (14,705,143)   (22,084,087)   (3,045,535)    
Other sales and services   (167,048)   (251,804)   (333,362)   (45,973)    
Total cost of sales   (6,854,321)   (14,956,947)   (22,417,449)   (3,091,508)    
Gross profit   1,878,300   3,830,106   6,235,278   859,883    
Operating expense:                    
Research and development   (1,531,644)   (1,852,297)   (2,425,600)   (334,506)    
Selling, general and administrative   (1,325,113)   (1,645,307)   (2,309,210)   (318,455)    
Other operating income, net     72,701                      125,402                           17,294    
Total operating expenses   (2,856,757)   (3,424,903)   (4,609,408)   (635,667)    
(Loss)/Income from operations   (978,457)   405,203   1,625,870   224,216    
Other (expense)/income:                    
Interest expense   (21,172)   (32,438)   (28,440)   (3,922)    
Interest income and investment income, net   249,662   418,531   430,262   59,336    
Others, net   104,695   181,488   324,291   44,722    
(Loss)/Income before income tax   (645,272)   972,784   2,351,983   324,352    
Income tax benefit/(expense)   4,226   (38,947)                       (41,885)                        (5,776)    
Net (loss)/income   (641,046)   933,837   2,310,098   318,576    
Less: Net (loss) /income attributable to noncontrolling interests   (23,080)   4,169                           16,945                            2,337    
Net (loss)/income attributable to ordinary shareholders of Li Auto Inc.   (617,966)   929,668                      2,293,153                         316,239    
                     
Net (loss)/income   (641,046)   933,837   2,310,098   318,576    
Other comprehensive income/(loss)                    
Foreign currency translation adjustment, net of tax   1,058,208   27,607   (120,809)   (16,660)    
Total other comprehensive income/(loss)   1,058,208   27,607   (120,809)   (16,660)    
Total comprehensive income   417,162   961,444                      2,189,289                         301,916    
Less: Net (loss) /income attributable to noncontrolling interests   (23,080)   4,169                           16,945                            2,337    
Comprehensive income attributable to ordinary shareholders of Li Auto Inc.   440,242   957,275                      2,172,344                         299,579    
Weighted average number of ADSs                    
Basic   965,395,732   979,166,653   980,693,361   980,693,361    
Diluted   965,395,732   1,052,402,047   1,053,852,487   1,053,852,487    
Net (loss)/earnings per ADS attributable to ordinary shareholders                    
Basic   (0.64)   0.95   2.34   0.32    
Diluted   (0.64)   0.89   2.18   0.30    
Weighted average number of ordinary shares                    
Basic   1,930,791,463   1,958,333,306   1,961,386,723   1,961,386,723    
Diluted   1,930,791,463   2,104,804,095   2,107,704,975   2,107,704,975    
Net (loss)/earnings per share attributable to ordinary shareholders                    
Basic   (0.32)   0.47   1.17   0.16    
Diluted   (0.32)   0.45   1.09   0.15    

Li Auto Inc.Unaudited Condensed Consolidated Balance Sheets
(All amounts in thousands)
               
        As of      
    December 31, 2022   June 30, 2023   June 30, 2023  
    RMB   RMB   US$  
ASSETS              
Current assets:              
Cash and cash equivalents   38,478,016   60,741,006   8,376,568  
Restricted cash   1,940,142   1,514,643   208,879  
Time deposits and short-term investments   18,031,395   11,513,001   1,587,715  
Trade receivable   48,381   84,394   11,638  
Inventories   6,804,693   5,659,293   780,452  
Prepayments and other current assets   1,689,860   3,084,491   425,371  
Total current assets   66,992,487   82,596,828   11,390,623  
Non-current assets:              
Long-term investments   1,484,491   777,446   107,215  
Property, plant and equipment, net   11,187,898   13,013,624   1,794,661  
Operating lease right-of-use assets, net   3,538,911   3,817,676   526,482  
Intangible assets, net   832,620   840,008   115,842  
Goodwill   5,484   5,484   756  
Deferred tax assets   74,767      
Other non-current assets   2,421,293   2,072,851   285,859  
Total non-current assets   19,545,464   20,527,089   2,830,815  
Total assets   86,537,951   103,123,917   14,221,438  
LIABILITIES AND EQUITY              
Current liabilities:              
Short‑term borrowings   390,750   6,344,154   874,899  
Trade and notes payable   20,024,329   31,269,120   4,312,209  
Amounts due to related parties   7,190   6,741   930  
Deferred revenue, current   569,234   1,125,700   155,241  
Operating lease liabilities, current   696,454   813,495   112,186  
Accruals and other current liabilities   5,684,644   7,186,468   991,057  
Total current liabilities   27,372,601   46,745,678   6,446,522  
Non-current liabilities:              
Long-term borrowings   9,230,807   1,449,547   199,902  
Deferred revenue, non-current   581,598   587,643   81,040  
Operating lease liabilities, non-current   1,946,367   2,127,695   293,423  
Deferred tax liabilities   77,809   45,512   6,276  
Other non-current liabilities   2,142,462   2,924,365   403,288  
Total non-current liabilities   13,979,043   7,134,762   983,929  
Total liabilities   41,351,644   53,880,440   7,430,451  
Total Li Auto Inc. shareholders’ equity   44,858,701   48,894,757   6,742,896  
Noncontrolling interests   327,606   348,720   48,091  
Total shareholders’ equity   45,186,307   49,243,477   6,790,987  
Total liabilities and shareholders’ equity   86,537,951   103,123,917   14,221,438  

Li Auto Inc.Unaudited Condensed Consolidated Statements of Cash Flows
(All amounts in thousands)
         
    For the Three Months Ended    
    June 30,2022   March 31,2023   June 30,2023   June 30,2023  
    RMB   RMB   RMB   US$  
Net cash provided by operating activities   1,129,407   7,780,366   11,112,395   1,532,469  
Net cash (used in)/provided by investing activities   (740,518)   (2,692,753)   7,573,941   1,044,494  
Net cash provided by/(used in) financing activities   1,026,855   (195,821)   (1,853,582)   (255,621)  
Effect of exchange rate changes   962,704   (25,241)   138,186   19,058  
Net change in cash, cash equivalents and restricted cash   2,378,448   4,866,551   16,970,940   2,340,400  
Cash, cash equivalents and restricted cash at beginning of period   34,716,572   40,418,158   45,284,709   6,245,047  
Cash, cash equivalents and restricted cash at end of period   37,095,020   45,284,709   62,255,649   8,585,447  
                   
Net cash provided by operating activities   1,129,407   7,780,366   11,112,395   1,532,469  
Capital expenditures   (677,755)   (1,078,295)   (1,491,029)   (205,622)  
Free cash flow (non-GAAP)   451,652   6,702,071   9,621,366               1,326,847  

Li Auto Inc.Unaudited Reconciliation of GAAP and Non-GAAP Results      
(All amounts in thousands, except for ADS/ordinary share and per ADS/ordinary share data)
 
    For the Three Months Ended  
    June 30,2022   March 31,2023   June 30,2023   June 30,2023  
    RMB   RMB   RMB   US$  
Cost of sales   (6,854,321)   (14,956,947)   (22,417,449)   (3,091,508)  
Share-based compensation expenses   9,301   11,186   9,449   1,303  
Non-GAAP cost of sales   (6,845,020)   (14,945,761)   (22,408,000)   (3,090,205)  
                   
Research and development expenses   (1,531,644)   (1,852,297)   (2,425,600)   (334,506)  
Share-based compensation expenses   301,449   336,220   247,064   34,072  
Non-GAAP research and development expenses   (1,230,195)   (1,516,077)   (2,178,536)   (300,434)  
                   
Selling, general and administrative expenses   (1,325,113)   (1,645,307)   (2,309,210)   (318,455)  
Share-based compensation expenses   146,858   132,823   160,928   22,193  
Non-GAAP selling, general and administrative expenses   (1,178,255)   (1,512,484)   (2,148,282)   (296,262)  
                   
(Loss)/Income from operations   (978,457)   405,203   1,625,870   224,216  
Share-based compensation expenses   457,608   480,229   417,441   57,568  
Non-GAAP (loss)/income from operations   (520,849)   885,432   2,043,311   281,784  
                   
Net (loss)/income   (641,046)   933,837   2,310,098   318,576  
Share-based compensation expenses   457,608   480,229   417,441   57,568  
Non-GAAP net (loss)/income   (183,438)   1,414,066   2,727,539   376,144  
                   
Net (loss)/income attributable to ordinary shareholders of Li Auto Inc.   (617,966)   929,668   2,293,153   316,239  
Share-based compensation expenses   457,608   480,229   417,441   57,568  
Non-GAAP net (loss)/income attributable to ordinary shareholders of Li Auto Inc.   (160,358)   1,409,897   2,710,594   373,807  
                   
Weighted average number of ADSs (non-GAAP)                  
Basic   965,395,732   979,166,653   980,693,361   980,693,361  
Diluted   965,395,732   1,052,402,047   1,053,852,487   1,053,852,487  
Non-GAAP net (loss)/earnings per ADS attributable to ordinary shareholders                  
Basic   (0.17)   1.44   2.76   0.38  
Diluted   (0.17)   1.35   2.58   0.36  
Weighted average number of ordinary shares (non-GAAP)                  
Basic   1,930,791,463   1,958,333,306   1,961,386,723   1,961,386,723  
Diluted   1,930,791,463   2,104,804,095   2,107,704,975   2,107,704,975  
Non-GAAP net (loss)/earnings per share attributable to ordinary shareholders7                  
Basic   (0.08)   0.72   1.38   0.19  
Diluted   (0.08)   0.67   1.29   0.18  

1 All translations from Renminbi (“RMB”) to U.S. dollar (“US$”) are made at a rate of RMB7.2513 to US$1.00, the exchange rate on June 30, 2023 as set forth in the H.10 statistical release of the Federal Reserve Board.

2 Vehicle margin is the margin of vehicle sales, which is calculated based on revenues and cost of sales derived from vehicle sales only.

3 The Company’s non-GAAP financial measures exclude share-based compensation expenses. See “Unaudited Reconciliation of GAAP and Non-GAAP Results” set forth at the end of this press release.

4 Free cash flow represents operating cash flow less capital expenditures, which is considered a non-GAAP financial measure.

5 Except for vehicle margin and gross margin, where absolute changes instead of percentage changes are presented.

6 Each ADS represents two Class A ordinary shares.

7 Non-GAAP basic net earnings/loss per share attributable to ordinary shareholders is calculated by dividing non-GAAP net income/loss attributable to ordinary shareholders by the weighted average number of ordinary shares outstanding during the periods. Non-GAAP diluted net earnings/loss per share attributable to ordinary shareholders is calculated by dividing non-GAAP net income/loss attributable to ordinary shareholders by the weighted average number of ordinary shares, dilutive potential ordinary shares outstanding during the periods, including the dilutive effects of convertible senior notes as determined under the if-converted method and the dilutive effect of share-based awards as determined under the treasury stock method.

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