LI AUTO(LI) - 2022 Q4 - Annual Report

Vehicle Deliveries and Sales - Li Auto Inc. reported cumulative vehicle deliveries of 257,334 as of December 31, 2022[371]. - Cumulative vehicle deliveries reached 309,918 units by March 2023, up from 257,334 units in December 2022, reflecting significant growth[429]. Financial Performance - The company reported a significant increase in revenue, reaching $1.5 billion, representing a 25$1.6 billion and $1.7 billion, which would reflect a growth rate of 7$200 million in revenue over the next fiscal year[4]. - The company reported a gross margin of 45%, which is a slight improvement from 43% in the previous quarter[9]. - Operating expenses increased by 10% to 300 million, primarily due to higher marketing and R&D costs[10]. Product Offerings - Li L9, launched in June 2022, has a retail price of RMB459,800 (US66,700) and offers a CLTC range of 1,315 kilometers[379]. - Li L8 is available in three trims with retail prices ranging from RMB339,800 (US$49,300) to RMB399,800 (US$58,000)[381]. - Li L7, launched in February 2023, features a CLTC range of 1,315 kilometers and retail prices from RMB319,800 (US$46,400) to RMB379,800 (US$55,100)[382]. - EREV models utilize a proprietary powertrain that combines battery packs and a range extension system, offering lower energy consumption compared to ICE vehicles[384]. Research and Development - The company employs 4,838 individuals in research and development as of December 31, 2022, focusing on electric vehicle technologies and intelligent systems[396]. - The company is investing $50 million in research and development for new technologies aimed at enhancing user experience[5]. - The company has developed 2,028 issued patents and 5,887 pending patent applications as of December 31, 2022, supporting its core proprietary technologies[427]. Autonomous Driving and Technology - Li Auto Inc. is dedicated to achieving Level 4 autonomous driving in the future, starting with high-end models like Li L9[374]. - As of December 31, 2022, the company delivered approximately 190,000 vehicles equipped with NOA capabilities, showcasing its advancements in autonomous driving technology[394]. - The autonomous driving system includes enhanced Level 2 capabilities, with features such as adaptive cruise control and automatic emergency braking[393]. - The smart in-car voice assistant, Li Xiang Tong Xue, features advanced algorithms for voice isolation and gesture recognition, improving user interaction[390]. Manufacturing and Operations - The Changzhou manufacturing base covers 72 hectares with approximately 180,000 square meters of shop floor space, consisting of four workshops and an office building[413]. - The company has implemented a fully self-developed production management software, Li MOS, which improves operating efficiency and shortens new factory deployment cycles by over 3 months[415]. - The company maintains over 2,700 vehicle testing measures for quality assurance before delivery to customers[419]. - The company is expanding its manufacturing facilities, including the construction of a semiconductor manufacturing base in Suzhou, Jiangsu Province, focusing on automotive-grade power modules[417]. Marketing and User Engagement - The marketing strategy focuses on generating word-of-mouth referrals and leveraging short-video platforms to enhance brand exposure and attract potential users[407]. - A new marketing strategy is set to increase brand awareness, with an expected increase in customer engagement by 30%[8]. Regulatory Environment - The PRC government encourages the construction and development of electric vehicle charging infrastructure, requiring centralized charging stations to obtain construction permits[435]. - The national subsidies for new energy vehicles (NEVs) will be reduced by 20% increments in 2021 compared to 2020, and further reduced by 30% increments in 2022 compared to 2021[447]. - The exemption of vehicle purchase tax for NEVs has been extended to December 31, 2023, benefiting models like Li ONE, Li L7, Li L8, and Li L9[449]. - The PRC Product Quality Law mandates that manufacturers cannot produce or sell products that do not meet safety standards, with penalties for violations[443]. Corporate Governance and Compliance - The company received an "AA" rating from MSCI ESG Research for the second consecutive year, highlighting its commitment to environmental, social, and governance practices[421]. - The company has adopted strict internal control systems for data security and user privacy, ensuring compliance with relevant laws and regulations[425]. - The company is subject to various consumer protection laws, including the PRC Consumer Rights and Interests Protection Law, which imposes stringent obligations on business operators[474]. VIE Structure and Agreements - The contractual arrangements with VIEs allow the company to exercise effective control and receive economic benefits from the VIEs[552]. - The exclusive consultation and service agreements stipulate that the company has the exclusive right to provide technical services to its VIEs and receive 100% of their quarterly net income as service fees[559]. - The equity pledge agreements ensure that shareholders pledge their equity interests to guarantee performance under the contractual arrangements[557].