Li Auto Inc. Announces Unaudited Third Quarter 2024 Financial Results
Quarterly total revenues reached RMB42.9 billion (US$6.1 billion)1Quarterly deliveries reached 152,831 vehicles
BEIJING, China, Oct. 31, 2024 (GLOBE NEWSWIRE) -- 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 September 30, 2024.
Operating Highlights for the Third Quarter of 2024
Total deliveries for the third quarter of 2024 were 152,831 vehicles, representing a 45.4% year-over-year increase.
2024 Q3
2024 Q2
2024 Q1
2023 Q4
Deliveries
152,831
108,581
80,400
131,805
2023 Q3
2023 Q2
2023 Q1
2022 Q4
Deliveries
105,108
86,533
52,584
46,319
As of September 30, 2024, in China, the Company had 479 retail stores in 145 cities, 436 servicing centers and Li Auto-authorized body and paint shops operating in 221 cities, and 894 super charging stations in operation equipped with 4,286 charging stalls.
Financial Highlights for the Third Quarter of 2024
Vehicle sales were RMB41.3 billion (US$5.9 billion) in the third quarter of 2024, representing an increase of 22.9% from RMB33.6 billion in the third quarter of 2023 and an increase of 36.3% from RMB30.3 billion in the second quarter of 2024.
Vehicle margin2 was 20.9% in the third quarter of 2024, compared with 21.2% in the third quarter of 2023 and 18.7% in the second quarter of 2024.
Total revenues were RMB42.9 billion (US$6.1 billion) in the third quarter of 2024, representing an increase of 23.6% from RMB34.7 billion in the third quarter of 2023 and an increase of 35.3% from RMB31.7 billion in the second quarter of 2024.
Gross profit was RMB9.2 billion (US$1.3 billion) in the third quarter of 2024, representing an increase of 20.7% from RMB7.6 billion in the third quarter of 2023 and an increase of 49.3% from RMB6.2 billion in the second quarter of 2024.
Gross margin was 21.5% in the third quarter of 2024, compared with 22.0% in the third quarter of 2023 and 19.5% in the second quarter of 2024.
Operating expenses were RMB5.8 billion (US$825.4 million) in the third quarter of 2024, representing an increase of 9.2% from RMB5.3 billion in the third quarter of 2023 and an increase of 1.5% from RMB5.7 billion in the second quarter of 2024.
Income from operations was RMB3.4 billion (US$489.2 million) in the third quarter of 2024, representing an increase of 46.7% from RMB2.3 billion in the third quarter of 2023 and an increase of 633.4% from RMB468.0 million in the second quarter of 2024.
Operating margin was 8.0% in the third quarter of 2024, compared with 6.7% in the third quarter of 2023 and 1.5% in the second quarter of 2024.
Net income was RMB2.8 billion (US$401.9 million) in the third quarter of 2024, representing an increase of 0.3% from RMB2.8 billion in the third quarter of 2023 and an increase of 156.2% from RMB1.1 billion in the second quarter of 2024. Non-GAAP net income3 was RMB3.9 billion (US$548.8 million) in the third quarter of 2024, representing an increase of 11.1% from RMB3.5 billion in the third quarter of 2023 and an increase of 156.2% from RMB1.5 billion in the second quarter of 2024.
Diluted net earnings per ADS4 attributable to ordinary shareholders was RMB2.66 (US$0.38) in the third quarter of 2024, compared with RMB2.67 in the third quarter of 2023 and RMB1.05 in the second quarter of 2024. Non-GAAP diluted net earnings per ADS attributable to ordinary shareholders was RMB3.63 (US$0.52) in the third quarter of 2024, compared with RMB3.29 in the third quarter of 2023 and RMB1.42 in the second quarter of 2024.
Net cash provided by operating activities was RMB11.0 billion (US$1.6 billion) in the third quarter of 2024, compared with RMB14.5 billion net cash provided by operating activities in the third quarter of 2023 and RMB429.4 million net cash used in operating activities in the second quarter of 2024.
Free cash flow5 was RMB9.1 billion (US$1.3 billion) in the third quarter of 2024, compared with RMB13.2 billion in the third quarter of 2023 and negative RMB1.9 billion in the second quarter of 2024.
Key Financial Results
(in millions, except for percentages and per ADS data)
For the Three Months Ended
% Change6
September 30,2023
June 30, 2024
September 30, 2024
YoY
QoQ
RMB
RMB
RMB
Vehicle sales
33,616.1
30,319.7
41,323.8
22.9%
36.3%
Vehicle margin
21.2%
18.7%
20.9%
(0.3)pts
2.2pts
Total revenues
34,679.5
31,678.4
42,874.2
23.6%
35.3%
Gross profit
7,644.5
6,176.9
9,224.7
20.7%
49.3%
Gross margin
22.0%
19.5%
21.5%
(0.5)pts
2.0pts
Operating expenses
(5,305.1)
(5,708.9)
(5,792.0)
9.2%
1.5%
Income from operations
2,339.4
468.0
3,432.7
46.7%
633.4%
Operating margin
6.7%
1.5%
8.0%
1.3pts
6.5pts
Net income
2,812.9
1,100.9
2,820.5
0.3%
156.2%
Non-GAAP net income
3,467.3
1,503.1
3,851.0
11.1%
156.2%
Diluted net earnings per ADS attributable to ordinary shareholders
2.67
1.05
2.66
(0.4)%
153.3%
Non-GAAP diluted net earnings per ADS attributable to ordinary shareholders
3.29
1.42
3.63
10.3%
155.6%
Net cash provided by/(used in) operating activities
14,506.5
(429.4)
11,024.6
(24.0)%
N/A
Free cash flow (non-GAAP)
13,224.8
(1,852.7)
9,051.8
(31.6)%
N/A
Recent Developments
One Million Deliveries Milestone
On October 18, 2024, the Company hit the one million cumulative vehicle deliveries milestone, becoming the first emerging new energy automotive brand in China to reach this benchmark. Notably, the Company hit this milestone just 58 months after delivering its first vehicle in December 2019.
OTA 6.4 Update
In October 2024, the Company released the OTA update version 6.4 for Li MEGA and the Li L series, significantly enhancing the user experience with a range of new and upgraded autonomous driving, smart space, and smart electric features. With this update, the Company also rolled out its latest autonomous driving solution, which integrates an end-to-end (E2E) model and a vision-language model (VLM), on a full scale to over 320,000 Li AD Max users. Additionally, "Li Xiang Tong Xue" has evolved further with an upgraded voice model and a newly added eye tracking function, along with several other features, enabling more natural and human-like interaction with users.
Safety and Health Assessment Results
In September 2024, Li MEGA and Li L6 successfully passed the China Insurance Automotive Safety Index (C-IASI) crash tests, adhering to the latest assessment protocols. Both models received a "G+" rating, the highest safety rating, across occupant safety, pedestrian safety, and assistance safety categories and an "A" rating in the crashworthiness and repair economy category. Notably, Li MEGA became the first MPV to receive a "G" rating in crash tests of 25% frontal offset impact on both the driver and the passenger sides under C-IASI's latest assessment protocols.
In September 2024, Li L6 received a record-setting overall score under the latest assessment protocols of the China Automobile Health Index (C-AHI) assessment conducted by the China Automotive Engineering Research Institute Co., Ltd. Li L6 received the highest ratings across all three categories assessed: the Clean Air Index, the Health Protection Index, and the Energy Efficiency and Emission Index.
Environmental, Social, and Governance (ESG) Performance
In September 2024, the Company was awarded the highest "AAA" rating by MSCI ESG Research for the second consecutive year, recognizing its excellence in key areas such as corporate governance, product quality and safety, clean technologies, and its commitment to sustainable development and social responsibility.
CEO and CFO Comments
Mr. Xiang Li, chairman and chief executive officer of Li Auto, commented, "We achieved record-breaking deliveries in the third quarter, further cementing our leadership among Chinese automotive brands in the RMB200,000 and above NEV market. In October, we celebrated a major milestone: one million cumulative deliveries, a first for emerging new energy automotive brands in China. These remarkable results highlighted our rapidly growing brand influence and users' strong recognition of our advancements in intelligentization. As our vehicle deliveries continue to grow, we are creating a virtuous cycle of innovation and advancement, driving the intelligentization of Li Auto vehicles to new heights. Notably, our latest autonomous driving solution, which integrates an end-to-end (E2E) model and a vision-language model (VLM), received overwhelmingly positive feedback from test users. In October, we rolled out this new solution on a full scale to over 320,000 Li AD Max users. Looking ahead, we remain committed to harnessing the power of technology to drive innovation, reinforcing our position as an industry leader as we continue to grow alongside our over one million user families."
Mr. Tie Li, chief financial officer of Li Auto, added, "In the third quarter, we maintained our robust business performance. Our record vehicle deliveries boosted revenues to a historic high of RMB42.9 billion, representing an increase of 23.6% year-over-year. With sales across our model lineup steadily growing, our economies of scale continued to expand which, combined with Li AD Max vehicles accounting for a larger proportion of our sales mix driven by breakthroughs in intelligentization, allowed us to meaningfully expand our gross margin to 21.5%. Additionally, our net income reached RMB2.8 billion and operating cash flow reached RMB11.0 billion in the third quarter. Building on our solid execution across the organization and strong profitability, we are poised to maintain a relentless pursuit of business growth and technological innovation, which will propel us forward on our journey to achieving our long-term vision."
Financial Results for the Third Quarter of 2024
Revenues
Total revenues were RMB42.9 billion (US$6.1 billion) in the third quarter of 2024, representing an increase of 23.6% from RMB34.7 billion in the third quarter of 2023 and an increase of 35.3% from RMB31.7 billion in the second quarter of 2024.
Vehicle sales were RMB41.3 billion (US$5.9 billion) in the third quarter of 2024, representing an increase of 22.9% from RMB33.6 billion in the third quarter of 2023 and an increase of 36.3% from RMB30.3 billion in the second quarter of 2024. The increase in revenue from vehicle sales over the third quarter of 2023 and second quarter of 2024 was primarily attributable to the increase in vehicle deliveries, partially offset by the lower average selling price mainly due to different product mix.
Other sales and services were RMB1.6 billion (US$220.9 million) in the third quarter of 2024, representing an increase of 45.8% from RMB1.1 billion in the third quarter of 2023 and an increase of 14.1% from RMB1.4 billion in the second quarter of 2024. The increase in revenue from other sales and services over the third quarter of 2023 and second quarter of 2024 was mainly attributable to the increased provision of services and sales of accessories, which is in line with higher accumulated vehicle sales, and increased sales of embedded products and services offered together with vehicle sales, which is in line with higher vehicle deliveries.
Cost of Sales and Gross Margin
Cost of sales was RMB33.6 billion (US$4.8 billion) in the third quarter of 2024, representing an increase of 24.5% from RMB27.0 billion in the third quarter of 2023 and an increase of 32.0% from RMB25.5 billion in the second quarter of 2024. The increase in cost of sales over the third quarter of 2023 and second quarter of 2024 was mainly attributable to increase in vehicle deliveries, partially offset by the lower average cost of sales due to different product mix and cost reduction.
Gross profit was RMB9.2 billion (US$1.3 billion) in the third quarter of 2024, representing an increase of 20.7% from RMB7.6 billion in the third quarter of 2023 and an increase of 49.3% from RMB6.2 billion in the second quarter of 2024.
Vehicle margin was 20.9% in the third quarter of 2024, compared with 21.2% in the third quarter of 2023 and 18.7% in the second quarter of 2024. The vehicle margin remained relatively stable over the third quarter of 2023. The increase in vehicle margin over the second quarter of 2024 was mainly due to cost reduction, partially offset by lower average selling price mainly due to different product mix.
Gross margin was 21.5% in the third quarter of 2024, compared with 22.0% in the third quarter of 2023 and 19.5% in the second quarter of 2024. The gross margin remained relatively stable over the third quarter of 2023. The increase in gross margin over the second quarter of 2024 was mainly due to the increase in vehicle margin.
Operating Expenses
Operating expenses were RMB5.8 billion (US$825.4 million) in the third quarter of 2024, representing an increase of 9.2% from RMB5.3 billion in the third quarter of 2023 and an increase of 1.5% from RMB5.7 billion in the second quarter of 2024.
Research and development expenses were RMB2.6 billion (US$368.6 million) in the third quarter of 2024, representing a decrease of 8.2% from RMB2.8 billion in the third quarter of 2023 and a decrease of 14.6% from RMB3.0 billion in the second quarter of 2024. The decrease in research and development expenses over the third quarter of 2023 and second quarter of 2024 was mainly attributable to decreased design and development costs for new products and technologies, and decreased employee compensation.
Selling, general and administrative expenses were RMB3.4 billion (US$478.7 million) in the third quarter of 2024, representing an increase of 32.1% from RMB2.5 billion in the third quarter of 2023 and an increase of 19.3% from RMB2.8 billion in the second quarter of 2024. The increase in selling, general and administrative expenses over the third quarter of 2023 and second quarter of 2024 was primarily due to increased employee compensation associated with the recognition of share-based compensation expenses regarding the chief executive officer's performance-based awards in the third quarter of 2024 as the achievement of the related performance condition was deemed probable as well as the growth in the number of staff.
Income from Operations
Income from operations was RMB3.4 billion (US$489.2 million) in the third quarter of 2024, representing an increase of 46.7% from RMB2.3 billion in the third quarter of 2023 and an increase of 633.4% from RMB468.0 million in the second quarter of 2024. Operating margin was 8.0% in the third quarter of 2024, compared with 6.7% in the third quarter of 2023 and 1.5% in the second quarter of 2024. Non-GAAP income from operations was RMB4.5 billion (US$636.0 million) in the third quarter of 2024, representing an increase of 49.1% from RMB3.0 billion in the third quarter of 2023 and an increase of 412.9% from RMB870.1 million in the second quarter of 2024.
Net Income and Net Earnings Per Share
Net income was RMB2.8 billion (US$401.9 million) in the third quarter of 2024, representing an increase of 0.3% from RMB2.8 billion in the third quarter of 2023 and an increase of 156.2% from RMB1.1 billion in the second quarter of 2024. Non-GAAP net income was RMB3.9 billion (US$548.8 million) in the third quarter of 2024, representing an increase of 11.1% from RMB3.5 billion in the third quarter of 2023 and an increase of 156.2% from RMB1.5 billion in the second quarter of 2024.
Basic and diluted net earnings per ADS attributable to ordinary shareholders were RMB2.82 (US$0.40) and RMB2.66 (US$0.38) in the third quarter of 2024, respectively, compared with RMB2.86 and RMB2.67 in the third quarter of 2023, respectively, and RMB1.11 and RMB1.05 in the second quarter of 2024, respectively. Non-GAAP basic and diluted net earnings per ADS attributable to ordinary shareholders were RMB3.85 (US$0.55) and RMB3.63 (US$0.52) in the third quarter of 2024, respectively, compared with RMB3.53 and RMB3.29 in the third quarter of 2023, respectively, and RMB1.51 and RMB1.42 in the second quarter of 2024, respectively.
Cash Position, Operating Cash Flow and Free Cash Flow
Cash position7 was RMB106.5 billion (US$15.2 billion) as of September 30, 2024.
Net cash provided by operating activities was RMB11.0 billion (US$1.6 billion) in the third quarter of 2024, compared with RMB14.5 billion net cash provided by operating activities in the third quarter of 2023 and RMB429.4 million net cash used in operating activities in the second quarter of 2024. The change in net cash provided by operating activities over the third quarter of 2023 was mainly due to increased payment related to inventory purchase, partially offset by the increase in cash received from customers. The change in net cash provided by operating activities over the second quarter of 2024 was mainly due to the increase in cash received from customers as a result of the increase in vehicle deliveries.
Free cash flow was RMB9.1 billion (US$1.3 billion) in the third quarter of 2024, compared with RMB13.2 billion in the third quarter of 2023 and negative RMB1.9 billion in the second quarter of 2024.
Business Outlook
For the fourth quarter of 2024, the Company expects:
Deliveries of vehicles to be between 160,000 and 170,000 vehicles, representing a year-over-year increase of 21.4% to 29.0%.
Total revenues to be between RMB43.2 billion (US$6.2 billion) and RMB45.9 billion (US$6.5 billion), representing a year-over-year increase of 3.5% to 10.0%.
This business outlook reflects the Company's current and preliminary views on its business situation and market conditions, which are subject to change.
Conference Call
Management will hold a conference call at 8:00 a.m. U.S. Eastern Time on Thursday, October 31, 2024 (8:00 p.m. Beijing/Hong Kong Time on October 31, 2024) 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/10042773-bt4saz.html
A replay of the conference call will be accessible through November 7, 2024, 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:
10042773
Additionally, a live and archived webcast of the conference call will be available on the Company's investor relations website at https://ir.lixiang.com.
Non-GAAP Financial Measures
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 from operations, non-GAAP net income, non-GAAP net income attributable to ordinary shareholders, non-GAAP basic and diluted net earnings per ADS attributable to ordinary shareholders, non-GAAP basic and diluted net earnings 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 and release of valuation allowance on deferred tax assets, 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 financial information 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 U.S. 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 RMB7.0176 to US$1.00, the exchange rate on September 30, 2024, 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 in successfully commercializing extended-range electric vehicles in China. While firmly advancing along this technological route, it builds platforms for battery electric vehicles in parallel. The Company leverages technology to create value for users. It concentrates its in-house development efforts on proprietary range extension systems, innovative electric vehicle technologies, and smart vehicle solutions. The Company started volume production in November 2019. Its current model lineup includes Li MEGA, a high-tech flagship family MPV, Li L9, a six-seat ...
