LI Auto’s 2023 Revenue Breaks 100 Billion

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LI Surpasses 100 Billion Revenue in 2023

In the year 2023, LI Auto achieved its best financial performance in history.

Let’s look at some key financial indicators for the fourth quarter of 2023:

・Vehicle sales revenue reached ¥403.8 billion, an increase of 133.8% year-on-year and 20.1% quarter-on-quarter;

・The gross profit margin for vehicles was 22.7%;

・Total revenue was ¥417.3 billion, an increase of 136.4% year-on-year and 20.3% quarter-on-quarter;

・The gross profit margin was 23.5%;

・Net profit was ¥57.5 billion, an increase of 2068.2% year-on-year and 104.5% quarter-on-quarter;

・Free cash flow was ¥146.4 billion, an increase of 349.4% year-on-year and 10.7% quarter-on-quarter.

Judging from this earnings report, LI Auto has achieved impressive growth in revenue, profits, and cash flow, thanks to the breakthrough sales reached in the fourth quarter of 2023.

Notably, despite discount offerings in the fourth quarter decreasing the average sale price, LI Auto’s gross margin remained solid. Moreover, the gross margin of its vehicles even increased by 1.5 percentage points compared to the third quarter, greatly exceeding Tesla’s gross margin performance during the same period.

Furthermore, the breakthrough in sales has spurred the earnings of LI Auto in other aspects. According to the financial report, the increase in sales has led to the growth of charging pile installations, as well as accessories, and service revenue. Consequently, other sales and service revenue of LI Auto reached CNY 13.5 billion in the fourth quarter, an upturn of 254.6% YoY and 27.2% QoQ.

Obviously, driven by sales, LI Auto increasingly enjoys the dividends brought about by the scale effect.

In the first quarter of this year, LI Auto has projected the following performance:

・To deliver between 100,000 to 103,000 vehicles, a YoY growth rate of 90.2% to 95.9%；

・The revenue projection stands between CNY 31.25 to 32.19 billion, a YoY growth rate of 66.3% to 71.3%.

Then we look at some key financial indicators for the full year of 2023:

・Vehicle sales revenue of CNY 120.29 billion, a YoY growth rate of 172.7%；

・Vehicle gross profit margin of 21.5%；

・Total revenue of CNY 123.85 billion, a YoY growth rate of 173.5%；

・Gross profit margin was 22.2%；

・Net profit was CNY 11.81 billion, a YoY growth rate of 58,494.3%；

・Free cash flow of CNY 44.19 billion, a YoY growth rate of 1,861.8%.

Since its establishment in 2015, it took LI Auto 8 years to turn its losses into annual profits.

Upon completion, LI Auto has taken the lead among the new generation of automakers with an eminent margin — grossing over CNY 100 billion in revenue, a free cash flow of CNY 44.19 billion. Moreover, as indicated by the financial report, by the end of 2023, LI Auto’s cash reserves have inflated to CNY 103.67 billion, making it well-capitalized. It recorded a gross margin of 22.2%, attaining the margin that Li Xiang, the founder, believes a tech corporation should achieve.

Also worth adding is that the capital market has gained further recognition and confidence in LI Auto. The financial report highlights that LI Auto has been included as a constituent stock in the Hang Seng Index.

Commenting on the performance of the earnings report, Li Xiang stated:

“The significant growth in scale, the deepening research and development, and the continuous improvement of operating efficiency have driven us to achieve our best financial performance in 2023. This lays a solid foundation for LI Auto to enter 2024 with a more diverse product matrix and diversified market demand.”

Flash comment:

Since achieving its first quarterly profit in the fourth quarter of 2022, LI Auto has officially bidden farewell to the quagmire of loss, and has achieved profit in each quarter of 2023. Also, it became the youngest firm listed in the “2023 Hurun Global 500” and transformed from a start-up into a growth company.This suggests that LI Auto’s past strategies surrounding the company and its products have been validated in commercial practice. It has successfully internalized its learnings from companies such as Apple, Tesla, Toyota, Huawei, and Microsoft, and has amassed significant resources amidst consistently increasing sales.

It should be emphasized once again that this year, LI Auto’s product range will expand to 8 models, with the LI L7/8/9 projected to sustain a sales foundation of 400,000 units.

In other words, grounded in robust commercial capabilities, LI Auto is in a position to be both offensive and defensive this year. In face of numerous costly battles, such as smart driving and vehicle upgrades, LI Auto can be more aggressive and poised.

LI MEGA: Priced at 559,800 Now on the Market

Aiming at the pure electric market, LI Auto has finally taken its ambitious step. On March 1, at LI Auto’s spring press conference, the first pure electric model LI MEGA was officially launched. As a pure-electric MPV, LI MEGA offers only one configuration with a unified retail price of 559,800 in the entire country, and it will officially start delivery on March 11.

For LI MEGA, Chairman and CEO of LI Auto, LI Xiang, confidently stated: it will be the next blockbuster product of LI Auto and will become the best-selling car priced above 500,000.

In the latest product lineup of LI Auto, what role does MEGA play?

From a pricing perspective, the LI MEGA, priced at 559,800, is undoubtedly the most expensive model in LI Auto’s lineup; from a size perspective, the LI MEGA with its flagship dimensions is a family-oriented pure-electric 7-seater; from a product classification perspective, it’s a family tech flagship MPV.

All these factors undeniably point to the MEGA itself, highlighting its unique significance.

However, in the view of Garage 42, to LI Auto, MEGA is more like a grand display of its comprehensive product strengths within the pure electric vehicle framework – or, MEGA is a product report for LI Auto entering the era of new energy vehicles.

Based on this premise, LI MEGA is indeed the best of what LI Auto has to offer in all aspects of a pure electric product.

For instance, for the pure electric market, range anxiety has always been a pervasive concern. LI Auto has also repeatedly asserted that charging efficiency is a key issue to be addressed. Therefore, on MEGA, LI Auto has provided a complete solution to the range anxiety of electric vehicles:

• Equipped with a massively 102.7 kWh battery pack, it guarantees an extremely long range of 710 km, hence ensuring longer endurance for the vehicle.- To support 5C Supercharging, LI MEGA uses an 800V high-voltage platform and is equipped with a Kirin 5C battery pack, enabling the vehicle to achieve a charging speed of “500 km in 12 minutes”.

• In line with the vehicle itself, LI Auto is building a nationwide 5C Supercharging network, which has already established more than 300 supercharging stations.

• To increase the range, the design style adopted by LI MEGA has brought an extremely low drag coefficient of 0.215. Coupled with the more efficient silicon carbide power chip, it has achieved a low power consumption of 15.9 kWh per 100 kilometers.

Worth mentioning is that in the urban scene, LI Auto also stated that charging stations adopting franchise model will land on a large scale in 2024. The average charging power of LI MEGA using urban supercharging piles reaches 300 kW, charging for 15 minutes can supplement 500 km range. Moreover, LI MEGA will also provide a 20 kW DC charging pile for users to optionally install, fully covering the daily energy replenishment scene for electric vehicle users.

Overall, in order to solve the range and energy supplementation issues inherent in electric vehicles, LI Auto has put a lot of effort into the product itself and the construction of energy supplementation infrastructure, which is fully demonstrated in MEGA. Not only that, arrangements such as high-voltage electric and supercharging network can not only serve MEGA, but also serve other electric models subsequently launched by LI Auto.

Of course, apart from the pain points unique to electric vehicles like range and energy supplementation, LI MEGA’s recognizability on the exterior contour has reached an unprecedented height. Regardless of whether it meets users’ aesthetics, it can be said to be a moving eye-catching package.

Meanwhile, in terms of space and comfort, LI MEGA takes full advantage of its 5.35-meter length and the benefits of its electric structure itself, providing users with a usable space length of 3,791 mm, allowing third-row passengers to also enjoy ample leg and headroom. Additionally, features including magic carpet seats, co-pilot queen seats, independent motorized massage couch for the second row, smart home equipment and top-tier audio and video system, smart refrigerators, and on-board 220V, also make LI MEGA very comfortable.

Regarding this, Li Xiang even directly stated: “The upgrade of refrigerator, TV, and couch, you could say, buying LI MEGA is like spending the money for a car but getting a house, and also getting free home cinema and a full set of furniture.”

In terms of driving experience, LI MEGA also adheres to the principle of prioritizing comfort, and on this basis, it is equipped with configurations such as dual-motor intelligent four-wheel drive system, magic carpet air suspension Max, and so on. It’s worth noting that as it does not contain a range extender, LI MEGA has a greater advantage in silence compared to range-extended models, and it also adopts double-layer laminated glass for all three rows to strive to create what the official calls “the best overall vehicle noise reduction performance”.In addition, LI MEGA strives for the “highest safety standards” in terms of vehicle safety features, including side wind assist, HUD digital rear-view mirror image, and streaming interior rear-view mirror.

In terms of intelligence, LI MEGA is fully loaded, implementing dual NVIDIA Drive Orin-X + Lidar hardware, and the high-performance Qualcomm Snapdragon 8295P. On the software side, it utilizes intelligent driving AD Max and LI Mate, an AI boosted by Mind GPT, none were absent – it can be said that these intelligent configurations are the least altered aspect when comparing LI MEGA with LI L Series.

Stated broadly, from all aspects of the product, there is no doubt that LI MEGA is a ‘stacked-product’, but it is far from senseless, but still ‘organic’. In the process of creating this family technology flagship MPV, “LI Auto” remains laser-focused on the family user, despite endowing it with powerful product capabilities.

Quick Review:

With the launch of LI MEGA, LI Auto officially steps into the development phase of plug-in hybrids and full EV dual-line products. The PHEVs continue to solidify their volume potential through upgraded configurations, whereas pure EVs continue to employ the strategy of price reduction from high to low. There is a difference between the two, but they highly synergize in terms of the supply chain – this will inevitably impose new and more profound challenges and changes for LI Auto in terms of supply chain system, infrastructure system, organizational system, and technical system.

In the future, LI Auto locks down its product layout of ‘1 super flagship + 5 plug-in hybrid models + 5 high-voltage pure electric models’ to realize in 2025, of which the super flagship MEGA has been launched – before this layout is finally established, LI Auto will meet the subsequent releases of L6 and M series products in 2024, and achieve the sales target of 800,000.

Viewed from this angle, the launch of MEGA is indeed LI Auto’s starting gun for sales attack in 2024; and now, the gun has been fired, and LI Auto’s sales rush has begun.

The All-new ZEEKR 001 Facelift is Comparable to a Re-Model

On February 27, the all-new ZEEKR 001 was officially launched. Although the ZEEKR 001 is a facelift, the extent of its modifications is on par with a remodel. The all-new ZEEKR 001 includes 4 versions:

• WE version 100 kWh rear-wheel-drive edition at $26,900;
• WE version 95 kWh all-wheel-drive edition at $26,900;
• ME version 100 kWh all-wheel-drive edition at $29,900;- YOU Model with 100 kWh battery four-wheel-drive version priced at 329,000 yuan.

Specifically in terms of configurations, the all-new ZEEKR 001 comes standard with an 800 V high voltage system across its range. The version equipped with the Kirin battery has a maximum charging rate of 4C, allowing for it to charge from 10% to 80% in just 15 minutes. The version equipped with CATL’s superfast charging battery can reach a maximum charging rate of 5C, charging from 10% to 80% in just 11.5 minutes.

Moreover, the all-new ZEEKR 001 thermal management system was upgraded to 2.0, improving total vehicle heat dissipation by 40%, and reducing heating energy consumption by 13.4%. This includes efficient utilization of heat energy from the battery, electric drive, and even chips.

In terms of smart features, let’s first look at the intelligent cabin of the all-new ZEEKR 001. It comes standard with a Qualcomm Snapdragon 8295 chip across the range, equipped with the ZEEKR 001 OS 6.0 system, which introduces the Kr AI model, bringing the cabin’s interactive capabilities to a new level, especially its eye interaction – the EVA Wake feature. Users can efficiently adjust rear-view mirrors, raise and lower windows, and more through eye-based interactions.

Next, let’s look at the smart driving feature. The all-new ZEEKR 001’s smart driving solution was developed in conjunction with Mobileye. It comes standard with a Lidar system across the range. Its identification and decision-making capabilities have significantly improved, supporting high-speed NZP upon delivery. In the second quarter of this year, ZEEKR will release a fingertip parking feature to both new and existing ZEEKR 001 owners. Moreover, ZEEKR’s high-speed NZP will cover more than 90% of local cities in China.

In terms of driving control, the all-new ZEEKR 001’s capabilities have further evolved. It comes equipped with a high-performance silicon carbide electric drive system developed with the same architecture as the ZEEKR 001 FR. Except for the base model, other versions’ motors all have a peak power of 580 kW and a peak torque of 810 N・m, resulting in a 0-100 km/h acceleration under 3 seconds.

In addition, the all-new ZEEKR 001 is equipped with a dual-cavity air suspension, which can coordinate with CCD electromagnetic damping system, forward-facing camera, perception algorithms, etc., to balance comfort and performance. It’s worth mentioning that the all-new ZEEKR 001 also supports the installation of a tow hook, further enriching the user’s outdoor scenarios.

In terms of interior configuration, the all-new ZEEKR 001 comes standard with a total of 28 speakers configured in a 7.1.4 Yamaha speaker system layout. Moreover, all four seats in the front and back rows have 2 pillow speakers each. Another addition worth mentioning is the ZEEKR 001’s sky-fitted system. It has 10 levels of brightness alteration and 10 adjustable zones responding flexibly to environment changes, making the cabin more comfortable.

Quick Review:

001, as ZEEKR’s inaugural model, has seen its modification three years after its launch. With its travel-oriented electric vehicle, it was quite unique, and sold an impressive 150,000 units sold by the end of 2023. This sales performance greatly exceeded everyone’s initial expectation for electric travel cars, demonstrating consumers’ fondness for this type of vehicle. The 001’s success has significantly contributed to ZEEKR’s market standing.

However, it would be more accurate to deem this new ZEEKR 001 as a model upgrade rather than a simple facelift. Besides the outer appearance, the car’s core structure has been significantly transformed, with the full range now featuring a 800V high-voltage framework, an 8295 cabin chip, a lidar system, a more powerful motor, and dual-chamber air suspension. These enhancements have further promoted the ZEEKR 001’s market competitiveness.

At present, under the joint drive of the all-new ZEEKR 001 and ZEEKR 007, ZEEKR is expected to shine in the competition scenario of new energy vehicles, where price wars set the backdrop.

LEAPMOTOR Releases Comprehensive 2024 Product Line

On March 2, the launch event of LEAPMOTOR C10 and the 2024 full product line was held in Hangzhou. During the event, LEAPMOTOR’s founder, chairman and CEO, Zhu Jiangming, revealed the latest prices for C10, C11, C01, and T03.

The C10 is priced between 128,800-168,800 yuan, the all-new C11 between 148,800-205,800 yuan, the all-new C01 between 136,800-158,800 yuan, and the all-new T03 between 49,900-69,900 yuan. This concerted product lineup undoubtedly presents a significant shake-up to the auto market. With its 2024 all-inclusive product line, LEAPMOTOR has once again refreshed value metrics for car-buying users within the 200,000 price range.

First, let’s talk about the LEAPMOTOR C10. The C10 measures 4,739 mm in length, and has a wheelbase of 2,825 mm, making it a medium-sized SUV. Its cabin has an effective space of 1,888 mm, giving it a habitable volume percentage of 66.8%.

In terms of intelligent features, it’s equipped with a four-leaf integrated electronic electrical framework plus a Snapdragon 8295 chip, making it the only model in its class to use the Orin-X laser radar-assisted driving system. Compared with its competitors, LEAPMOTOR C10 has fully harnessed the capabilities of the 8295 chip. The car pioneerly integrates cabin driving with features like DSP integrated sound, parking, and 360-degree surround view, which enhances overall vehicle efficacy and mitigates the risk of breakdowns.For safety, the LEAPMOTOR C10 is designed according to the double five-star safety standards of C-NCAP and E-NCAP, offering consistent, beyond-five-star safety protection to users worldwide. The LEAPMOTOR C10’s bare body torsional rigidity reaches up to 42,500 N•m/°. Front and rear door collision beams, B-pillar reinforcement plates, and seat crossbeams are made of submarine-grade 2000 MPa hot-formed steel. The proportion of high-performance materials with aluminum alloy used in the whole vehicle reaches up to 73.6%.

Next, let’s look at the LEAPMOTOR C11. The LEAPMOTOR C11 has achieved the advanced “Four-Leaf Clover” central integration electronic electrical architecture through making use of software-defined cars, reaching car-customization and second-level OTA.

At the same time, the LEAPMOTOR C11 also boasts a Qualcomm Snapdragon 8295 chip, coupled with the LEAP Pilot advanced intelligent driving assistance system. It combines lidar with the OrinX chip, 5G communication with high-precision maps, bringing NAP and 25 other driving assistance functions.

Then there is the brand new LEAPMOTOR C01. The brand new LEAPMOTOR C01 also accomplishes the “Four-Leaf Clover” central integration electronic electrical architecture and packs front double wishbone and rear five-link independent suspension plus CTC integral chassis, enhancing driving control ability.

The brand new LEAPMOTOR C01 adopts a larger panoramic ceiling plan, the visible area reaches up to 0.91 square meters, which not only opens up the view but also the rear headspace. The brand new LEAPMOTOR C01 also carries a Qualcomm 8295 chip, achieving an uplift in cockpit intelligence.

Last but not least is the brand new T03. The brand new T03 delivers numerous upgrades, including an open central channel, cruise control, and other 12 configuration updates, as well as 14 seat optimizations.

Regarding this product update, Senior Vice President of LEAPMOTOR, Cao Li, says:

“The T03, representing joyful quality enjoyment, the C10 for the young caring family, the C11 for the striving middle class family, and the C01 for the rational striving youth,” LEAPMOTOR has achieved all-round coverage of the mass market needs. It could be said that with the 2024 LEAPMOTOR full-house series, consumers can blindly choose any one, all being worth more than their value.”

Quick Review:

The “cost-performance ratio” has always been an important label for LEAPMOTOR in the 100-200K market. This 2024 market launch of the full-house LEAPMOTOR series continues to carry through the “cost-performance ratio” as always, and this basic strategy is inseparable from LEAPMOTOR’s insistence on full-area self-research, thus possessing strong cost control ability.Aside from “price-performance ratio”, LEAPMOTOR now applies a new approach to product development — learning from LI Auto. However, emulating LI Auto is not mere imitation. As stated by LEAPMOTOR’s Senior Vice President, Cao Li, during a group interview after the release conference, the learnings from LI’s L7 are not entirely borrowed or copied, but their attitude towards products and user demands, along with product-specific positioning, are noteworthy. The C10 and L7 target different user groups, therefore we can’t simply emulate their definitions, we must form our own ideas.

Following LEAPMOTOR’s learning from LI Auto and entering the 100,000 to 200,000 RMB family market, LEAPMOTOR can now cater to a much larger user base. This year, LEAPMOTOR aims to achieve a major breakthrough in sales, with the C11 playing a vital role in maintaining a stable foundation, and the C10 being the key to realizing this breakthrough.

This article is a translation by AI of a Chinese report from 42HOW. If you have any questions about it, please email bd@42how.com.