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Li Auto Q3 2024 Earnings Call Summary

The Li Auto earnings call for the third quarter of 2024 held on October 31, 2024, at 8:00 a.m. ET featured presentations and discussions on the company’s recent financial performance and operational updates. Hosted by Janet Chang, Director of Investor Relations, the call included contributions from key executives such as Xiang Li, Founder, Chairman, and CEO, and Johnny Tie Li, CFO, among others.

The earnings report indicated that Li Auto delivered over 152,000 vehicles in Q3, a 45.4% increase from the previous year, boosting their market share in their segment from 14.4% in Q2 to 17.3% in Q3. This record-breaking delivery number positions Li Auto as a leading brand in China’s RMB 200,000-and-above NEV market, overtaking several established European brands.

Li Auto’s L series maintained strong sales performance, underpinned by continuous innovation and monthly OTA updates that enhanced autonomous driving, smart cockpit experiences, and electric drive systems. In Q3, the average monthly sales of the Li L series surpassed 50,000 units. The company’s AD Max autonomous driving option saw growing interest, contributing to an improved product mix.

The company expanded its retail network to 479 stores in 145 cities, and 436 service centers across China by the end of September. Li Auto’s supercharging network now consists of 1,000 stations with 4,888 charging stalls in 175 cities, aiming to establish a leading charging infrastructure by the next year, in collaboration with industry partners like Sinopec.

Li Auto’s proprietary autonomous driving solution has progressed rapidly, reaching significant milestones in terms of training data and deployment across over 320,000 vehicles. The update enhanced the user experience significantly, with the release of OTA 6.4 in October.

Financially, Li Auto achieved record revenues of RMB 42.9 billion for Q3, marking a rise of 23.6% year-over-year. The gross margin stood at 21.5%, with non-GAAP operating income at RMB 4.4 billion and operating cash flow at RMB 11 billion. The company achieved a milestone of 1 million cumulative vehicle deliveries in just 58 months.

Looking forward, Li Auto aims to deliver 160,000 to 170,000 units in Q4 2024, with an annual target between 502,000 and 512,000 units. The company also highlighted its ESG achievements, receiving MSCI’s highest AAA ESG rating for the second year in a row.

In addressing the financials, Johnny Tie Li confirmed revenue growth driven by increased vehicle sales, albeit with lower average selling prices due to a varied product mix. Operating expenses rose slightly, with specific increases in SG&A costs due to share-based compensation related to CEO performance awards.

Throughout the Q&A session, executives addressed inquiries about growth potential, technology developments in autonomous driving and electric vehicles, competitive strategies, and market expansions, particularly highlighting plans for the BEV market and overseas expansion strategy focusing on emerging markets.

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