Li Auto will launch more new models

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Even though second-quarter revenue exceeded expectations, Li Auto saw its revenue decrease from the previous quarter. Total revenue was 8.73 billion RMB (1.30 billion USD) in the second quarter of 2022, an increase of 73.3% compared to 5.04 billion RMB in the second quarter of 2021, but a decrease of 8 .7% compared to 9.56 billion RMB in the first quarter of 2022.

Its net loss in the reporting period jumped to RMB641.0 million (US$95.7 million), from RMB235.5 million in the second quarter of 2021 and a net loss of RMB10.9 million. in the first quarter of 2022.

Quarterly delivery changes are the direct cause of the increase in revenue year over year and the decrease in revenue quarter over quarter. The shortage of supply resulting from the resurgences of COVID-19 had some negative effect on its deliveries. In April, COVID resurgences affected the Yangtze River Delta where 80% of Li Auto’s suppliers are located. Some suppliers have completely suspended production or logistics, undermining the automaker’s production plan.

Gross margin was 21.5% in the three months, down 1.1 percentage points from the prior quarter and up 2.6 percentage points from the same quarter last year.

The L9, its all-new model launched on June 21 this year, will have a higher gross margin than the Li ONE, company executives said during the second-quarter earnings call. Its first battery-electric vehicle, due next year, will also help improve the automaker’s profits and cash flow.

In the next few months, the gross margin will largely depend on the cost of the battery. Kevin Shen, co-founder and chairman of Li Auto, said there has been a slight drop in the cost of battery materials over the past month, but taking the year as a whole, the cost could fluctuate significantly. in the other months of this year.

Quarterly operating expenses climbed 92% compared to a year ago, while its selling, general and administrative expenses represented a 58.6% increase compared to the same period of 2021. These are the results of a greater number of employees and a higher salary cost. And its efforts to expand the sales and service network also increased rental expenses.

The automaker increased its investment in research and development, which hit a new high of RMB 1.53 billion in the second quarter of this year and accounted for 17.5 percent of its total revenue.

Li Auto will launch more new models

For this quarter, Li Auto expects deliveries of between 27,000 and 29,000. The L9, which went out of production on August 18, is expected to have a monthly delivery volume of over 10,000 units in September. If we subtract that and the automaker’s deliveries in July (10,422), the Li ONE’s total deliveries in August and September will be a maximum of 8,578 units. According to local media, Li ONE’s registrations in the first two weeks of August were under 2,000 units.

Does this mean that the L9 will take the market share of the Li ONE?

Li Auto pointed out that its first production model remains competitive among vehicle models priced between 300,000 and 400,000 RMB. To stimulate demand for Li ONE, Li ONE recently started offering 7,000 RMB insurance promotion. “We are working closely with our sales team to increase customer attention for the Li ONE and maintain interest in all products,” Kevin said on the call.

Li Auto will launch more new models

Although Li Xiang, the founder of the company, said that less than 10% of buyers with a budget of 300,000 RMB to 350,000 RMB will go for a model priced at 500,000 RMB, but there is a certain many customers who initially plan to purchase the ONE and ultimately choose the L9, especially those who have flexibility in vehicle purchase.

Comparatively speaking, the L9 boosts much more advanced features. The L9 is built on the company’s extended second-generation platform while the ONE rides on the first generation. The Li L9 features the company’s self-driving system developed by the company, Li AD Max, powered by two Orin-X chips with computing power upgraded to 508 TOPS.

Li Auto will launch more new models

Earlier this month, Li Auto revealed that the newly launched L9 had accumulated more than 50,000 orders, among which confirmed non-refundable orders exceeded 30,000. And the orders are increasing, according to executives on the call.

The automaker said the flagship full-size six-passenger smart SUV for families has very special product positioning. For models in the L9’s price range, no other competitor can match the model in terms of size and smart features. “So currently what we are looking at is to attract potential buyers with car budgets ranging from 400,000 RMB to 500,000 RMB.

After the launch of the L9 by the automaker, especially after the start of the test drive, the order intake of the Li ONE slowed down and potential customers of the Li ONE might turn to purchase the L9. It is because of the slowdown of the Li ONE order that the waiting time is shorter than last month. When the company set its outlook for the third quarter, it had taken into consideration the slowing momentum of Li ONE.

After the L9, Li Auto’s next new model will be called the L8. Li Xiang revealed that the new model will adopt a faster pace of launch and delivery ahead of schedule. It only takes two months for the L9 to start shipping after product launch, but the L8 will be faster.

According to the company, the product portfolio planning has gone viral online, the L8, codenamed X02, will use the same platform as the L9, codenamed X01. Deliveries of the L8 for the first full month will exceed 10,000 units while the monthly production capacity of the L9 is 15,000 units.

Li Xiang is very confident about the L8’s performance in the market. “Compared to other new competitors recently launched, I believe the L8 will be the most advanced in terms of product competitiveness,” said the founder.

The X03, likely to be called L7 or L5, was also captured in spy mode and is considered the next generation of the Li ONE. The X03 will be a large five-seater SUV, bigger than the Audi Q7.

Li Auto will launch more new models

The range extension approach is still seen by the Beijing-based company as the best technology roadmap for SUVs in the next five years, so it will spare no effort to improve system efficiency. Li Xiang took BYD Han sedan and BYD Tang SUV as examples to illustrate his point. He said the battery-electric Han outsold the hybrid version, while the hybrid Tang was much more popular than the pure-electric version. “People who want to buy an SUV that is priced over 200,000 RMB or even 300,000 RMB have a clear expectation for scenarios: for journeys.

The CEO underlines the potential of the extended autonomy system which is increasingly worthy of study. Range extended vehicles are electric vehicles with range extenders, rather than fossil fuel vehicles plus batteries. It’s totally different. This is why automakers such as Dongfeng and Changan are also choosing extended range technology.

Continued investment in extended range products does not mean ignoring battery electric vehicle products and both segments share the same goal of replacing fossil fuel vehicles. Regarding the company’s efforts in the battery electric vehicle segment, Li Xiang said the segment’s product will be in an all-new form, which will offer significantly more space than current range-extending SUVs. the society.

Li Auto will launch more new models

Its main focus in the electric battery segment will be long-distance driving and ultra-fast charging. Li Xiang also revealed that the company’s test vehicle was able to travel 400 kilometers after charging for 10 minutes.

Based on current Li L9 customer data, 80% of customers can install charging stations at home, while 100% can have stable access to charging infrastructure. Therefore, Li Auto’s priority in infrastructure development will not be to solve the problems of charging at home or in urban areas, but to make this infrastructure convenient for long-distance travelers, such as those crossing the Yangtze River Delta, Pearl River Delta.

In addition, last year, Anhui Zhongding Sealing Parts Co., Ltd., ranked 85th on the Automotive News 2022 list, once announced that one of its subsidiaries had become the exclusive supplier of management assembly products. automotive heat of the X03.

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