Li Auto Inc. Announces Unaudited First Quarter 2022 Financial Results

Quarterly total revenues reached RMB9.56 billion (US$1.51 billion)1
Quarterly deliveries reached 31,716 vehicles
Quarterly gross margin reached 22.6%

BEIJING, China, May 10, 2022 (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 March 31, 2022.

Financial Highlights for the First Quarter of 2022

• Vehicle sales were RMB9.31 billion (US$1.47 billion) in the first quarter of 2022, representing an increase of 168.7% from RMB3.46 billion in the first quarter of 2021 and a decrease of 10.3% from RMB10.38 billion in the fourth quarter of 2021.
  
  
• Vehicle margin2 was 22.4% in the first quarter of 2022, compared with 16.9% in the first quarter of 2021 and 22.3% in the fourth quarter of 2021.
  
  
• Total revenues were RMB9.56 billion (US$1.51 billion) in the first quarter of 2022, representing an increase of 167.5% from RMB3.58 billion in the first quarter of 2021 and a decrease of 10.0% from RMB10.62 billion in the fourth quarter of 2021.
  
  
• Gross profit was RMB2.16 billion (US$341.3 million) in the first quarter of 2022, representing an increase of 250.9% from RMB616.7 million in the first quarter of 2021 and a decrease of 9.1% from RMB2.38 billion in the fourth quarter of 2021.
  
  
• Gross margin was 22.6% in the first quarter of 2022, compared with 17.3% in the first quarter of 2021 and 22.4% in the fourth quarter of 2021.

• Loss from operations was RMB413.1 million (US$65.2 million) in the first quarter of 2022, compared with RMB407.7 million loss from operations in the first quarter of 2021 and RMB24.1 million income from operations in the fourth quarter of 2021. Non-GAAP income from operations3 was RMB74.9 million (US$11.8 million) in the first quarter of 2022, compared with RMB224.8 million non-GAAP loss from operations3 in the first quarter of 2021 and RMB415.0 million non-GAAP income from operations in the fourth quarter of 2021.
  
  
• Net loss was RMB10.9 million (US$1.7 million) in the first quarter of 2022, compared with RMB360.0 million net loss in the first quarter of 2021 and RMB295.5 million net income in the fourth quarter of 2021. Non-GAAP net income3 was RMB477.1 million (US$75.3 million) in the first quarter of 2022, compared with RMB177.0 million non-GAAP net loss3 in the first quarter of 2021 and RMB686.4 million non-GAAP net income in the fourth quarter of 2021.
  
  
• Operating cash flow was RMB1.83 billion (US$289.3 million) in the first quarter of 2022, representing an increase of 98.0% from RMB926.3 million in the first quarter of 2021 and a decrease of 52.2% from RMB3.84 billion in the fourth quarter of 2021.
  
  
• Free cash flow4 was RMB502.0 million (US$79.2 million) in the first quarter of 2022, compared with RMB570.2 million in the first quarter of 2021 and RMB1.62 billion in the fourth quarter of 2021.
  

Recent Developments

Delivery Update

• In April 2022, the Company delivered 4,167 Li ONEs. As of April 30, 2022, the Company had 225 retail stores covering 106 cities, in addition to 292 servicing centers and Li Auto-authorized body and paint shops operating in 211 cities.
  

Inaugural Environmental, Social and Governance Report

• On April 19, 2022, the Company published its 2021 Environmental, Social and Governance (ESG) report (https://ir.lixiang.com/esg), highlighting the Company’s ESG initiatives and achievements.
  

Inclusion in the Shenzhen- and Shanghai-Hong Kong Stock Connect Programs

• The Company’s Class A ordinary shares, which are listed and traded on the Stock Exchange of Hong Kong Limited, have been included in the Shenzhen- and Shanghai-Hong Kong Stock Connect programs, effective on March 14 and April 25, 2022, respectively.
  

CEO and CFO Comments

Mr. Xiang Li, founder, chairman, and chief executive officer of Li Auto, commented, “We sincerely appreciate our users’ consistent support, which, combined with our self-discipline for efficient operations, continued to drive robust financial performance in the first quarter of 2022 and ensured the scale and pace of our investments in research and development. While the recent pandemic resurgence and associated supply chain interruptions have been challenging for our industry, and uncertainty remains for the near future, we are confident in the resilience of our organization.”

“Despite recent pandemic-related bumps on the road, we are forging ahead with our plan to commence the deliveries of our second model, the L9, in the third quarter. The L9 is a flagship smart SUV for family users based on our new-generation EREV platform, offering best-in-class performance, safety, and intelligence. It features our fully self-developed range extension system, chassis control system, and central vehicle domain controller, which empower its flagship dynamic performance and drivability. Every L9 comes standard with our proprietary autonomous driving system, Li AD Max, capable of all-scenario Navigation on ADAS (NOA) for enhanced driving safety and convenience.”

Mr. Tie Li, chief financial officer of Li Auto, added, “Our solid performance in the first quarter of 2022 speaks to the enduring strength of our product. Driven by our strong vehicle deliveries despite the supply chain constraints facing the industry, we achieved revenues of RMB9.56 billion for the first quarter, up 167.5% year over year. Our vehicle margin in the first quarter remained healthy at 22.4%, and our cash flow from operations was positive for the eighth consecutive quarter at RMB1.83 billion. Amidst this volatile environment, we will continue to execute with discipline and further strengthen our financial flexibility and resilience, persevering through challenges while maintaining a steadfast commitment to innovation.”

Financial Results for the First Quarter of 2022

Revenues

• Total revenues were RMB9.56 billion (US$1.51 billion) in the first quarter of 2022, representing an increase of 167.5% from RMB3.58 billion in the first quarter of 2021 and a decrease of 10.0% from RMB10.62 billion in the fourth quarter of 2021.
  
  
• Vehicle sales were RMB9.31 billion (US$1.47 billion) in the first quarter of 2022, representing an increase of 168.7% from RMB3.46 billion in the first quarter of 2021 and a decrease of 10.3% from RMB10.38 billion in the fourth quarter of 2021. The increase in revenue from vehicle sales over the first quarter of 2021 was mainly attributable to the increase in vehicle deliveries in the first quarter of 2022. The decrease in revenue from vehicle sales over the fourth quarter of 2021 was mainly attributable to the decrease in vehicle deliveries which were affected by seasonal factors related to the Chinese New Year holiday in the first quarter of 2022.
  
  
• Other sales and services were RMB253.4 million (US$40.0 million) in the first quarter of 2022, representing an increase of 127.2% from RMB111.5 million in the first quarter of 2021 and an increase of 3.6% from RMB244.7 million in the fourth quarter of 2021. The increase in revenue from other sales and services over the first quarter of 2021 was mainly attributable to increased sales of charging stalls, accessories and services in line with higher accumulated vehicle sales.
  

Cost of Sales and Gross Margin

• Cost of sales was RMB7.40 billion (US$1.17 billion) in the first quarter of 2022, representing an increase of 150.1% from RMB2.96 billion in the first quarter of 2021 and a decrease of 10.2% from RMB8.24 billion in the fourth quarter of 2021. The increase in cost of sales over the first quarter of 2021 was in line with revenue growth, mainly driven by the increase in vehicle deliveries in the first quarter of 2022. The decrease in cost of sales over the fourth quarter of 2021 was mainly due to the decrease in vehicle deliveries in the first quarter of 2022.
  
  
• Gross profit was RMB2.16 billion (US$341.3 million) in the first quarter of 2022, representing an increase of 250.9% from RMB616.7 million in the first quarter of 2021 and a decrease of 9.1% from RMB2.38 billion in the fourth quarter of 2021.
  
  
• Vehicle margin was 22.4% in the first quarter of 2022, compared with 16.9% in the first quarter of 2021 and 22.3% in the fourth quarter of 2021. The increase in vehicle margin over the first quarter of 2021 was primarily driven by higher average selling price attributable to the increase of vehicle deliveries of 2021 Li ONE since its release in May 2021.
  
  
• Gross margin was 22.6% in the first quarter of 2022, compared with 17.3% in the first quarter of 2021 and 22.4% in the fourth quarter of 2021.
  

Operating Expenses

• Operating expenses were RMB2.58 billion (US$406.5 million) in the first quarter of 2022, representing an increase of 151.5% from RMB1.02 billion in the first quarter of 2021 and an increase of 9.4% from RMB2.36 billion in the fourth quarter of 2021.
  
  
• Research and development expenses were RMB1.37 billion (US$216.7 million) in the first quarter of 2022, representing an increase of 167.0% from RMB514.5 million in the first quarter of 2021 and an increase of 11.7% from RMB1.23 billion in the fourth quarter of 2021. The increase in research and development expenses over the first quarter of 2021 was primarily driven by increased employee compensation as a result of our growing number of research and development staff as well as increased costs associated with new product development. The increase in research and development expenses over the fourth quarter of 2021 was mainly driven by increased employee compensation as a result of our growing number of research and development staff.
  
  
• Selling, general and administrative expenses were RMB1.20 billion (US$189.8 million) in the first quarter of 2022, representing an increase of 135.9% from RMB509.9 million in the first quarter of 2021 and an increase of 6.8% from RMB1.13 billion in the fourth quarter of 2021. The increase in selling, general and administrative expenses over the first quarter of 2021 was primarily driven by increased employee compensation as a result of our growing number of staff, as well as increased marketing and promotional activities and rental expenses associated with the expansion of the Company’s sales network.
  

Loss/Income from Operations

• Loss from operations was RMB413.1 million (US$65.2 million) in the first quarter of 2022, compared with RMB407.7 million loss from operations in the first quarter of 2021 and RMB24.1 million income from operations in the fourth quarter of 2021. Non-GAAP income from operations was RMB74.9 million (US$11.8 million) in the first quarter of 2022, compared with RMB224.8 million non-GAAP loss from operations in the first quarter of 2021 and RMB415.0 million non-GAAP income from operations in the fourth quarter of 2021.
  

Net Loss/Income and Net Loss/Earnings Per Share

• Net loss was RMB10.9 million (US$1.7 million) in the first quarter of 2022, compared with RMB360.0 million net loss in the first quarter of 2021 and RMB295.5 million net income in the fourth quarter of 2021. Non-GAAP net income was RMB477.1 million (US$75.3 million) in the first quarter of 2022, compared with RMB177.0 million non-GAAP net loss in the first quarter of 2021 and RMB686.4 million non-GAAP net income in the fourth quarter of 2021.
  
  
• Basic and diluted net loss per ADS6 attributable to ordinary shareholders were RMB0.01 (US$0.00) and RMB0.01 (US$0.00) in the first quarter of 2022, respectively. Non-GAAP basic and diluted net earnings per ADS attributable to ordinary shareholders3 were RMB0.49 (US$0.08) and RMB0.47 (US$0.07) in the first quarter of 2022, respectively.
  

Cash Position, Operating Cash Flow and Free Cash Flow

• Balance of cash and cash equivalents, restricted cash, time deposits and short-term investments was RMB51.19 billion (US$8.07 billion) as of March 31, 2022.
  
  
• Operating cash flow was RMB1.83 billion (US$289.3 million) in the first quarter of 2022, representing an increase of 98.0% from RMB926.3 million in the first quarter of 2021 and a decrease of 52.2% from RMB3.84 billion in the fourth quarter of 2021.
  
  
• Free cash flow was RMB502.0 million (US$79.2 million) in the first quarter of 2022, compared with RMB570.2 million in the first quarter of 2021 and RMB1.62 billion in the fourth quarter of 2021.

Business Outlook

For the second quarter of 2022, the Company expects:

• Deliveries of vehicles to be between 21,000 and 24,000 vehicles, representing an increase of 19.5% to 36.6% from the second quarter of 2021.
  
  
• Total revenues to be between RMB6.16 billion (US$972.3 million) and RMB7.04 billion (US$1.11 billion), representing an increase of 22.3% to 39.8% from the second quarter of 2021.
  

This business outlook reflects the Company’s current and preliminary view on the business situation and market condition, in particular, the encouraging signs of recovery from the resurging pandemic in the Yangtze Delta region, which are all subject to change due to uncertainties related to factors such as the pace of pandemic recovery, among others.

Conference Call

Management will hold a conference call at 8:00 a.m. U.S. Eastern Time on Tuesday, May 10, 2022 (8:00 p.m. Beijing Time on May 10, 2022) 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 at least 20 minutes prior to the scheduled call start time. Upon registration, participants will receive the conference call access information, including dial-in numbers, Direct Event passcode, a unique registrant ID and an e-mail with detailed instructions to join the conference call.

Participant Online Registration: http://apac.directeventreg.com/registration/event/4179921

A replay of the conference call will be accessible through May 18, 2022, by dialing the following numbers:

Additionally, a live and archived webcast of the conference call will be available on the Company’s investor relations website at http://ir.lixiang.com.

Non-GAAP Financial Measure

The Company uses non-GAAP measures, such as non-GAAP cost of sales, non-GAAP research and development expenses, non-GAAP selling, general and administrative expenses, non-GAAP income/loss from operations, non-GAAP net income/loss, non-GAAP net loss/income attributable to ordinary shareholders, non-GAAP basic and diluted net earnings/loss per ADS 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, 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 net loss or other consolidated statements of comprehensive loss data 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 GAAP and Non-GAAP Results” set forth at the end of this press release.

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 to create homes on the move that bring happiness to the entire family (“??????，??????”). 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 to successfully commercialize extended-range electric vehicles in China. Its first model, Li ONE, is a six-seat, large premium smart electric SUV. The Company started volume production of Li ONE in November 2019 and released the 2021 Li ONE in May 2021. The Company leverages technology to create value for its users. It concentrates its in-house development efforts on its proprietary range extension system, next-generation electric vehicle technology, and smart vehicle solutions. Beyond Li ONE, the Company will expand its product line by developing new vehicles, including BEVs and EREVs, to target a broader consumer base.

For more information, please visit: http://ir.lixiang.com.

Safe Harbor Statement

This press release contains statements that may constitute “forward-looking” statements pursuant to the “safe harbor” provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as “will,” “expects,” “anticipates,” “aims,” “future,” “intends,” “plans,” “believes,” “estimates,” “likely to,” and similar statements. Li Auto may also make written or oral forward-looking statements in its periodic reports to the U.S. Securities and Exchange Commission (the “SEC”) and The Stock Exchange of Hong Kong Limited (the “HKEX”), in its annual report to shareholders, in press releases and other written materials, and in oral statements made by its officers, directors, or employees to third parties. Statements that are not historical facts, including statements about Li Auto’s beliefs, plans, and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties. A number of factors could cause actual results to differ materially from those contained in any forward-looking statement, including but not limited to the following: Li Auto’s strategies, future business development, and financial condition and results of operations; Li Auto’s limited operating history; risks associated with extended-range electric vehicles, Li Auto’s ability to develop, manufacture, and deliver vehicles of high quality and appeal to customers; Li Auto’s ability to generate positive cash flow and profits; product defects or any other failure of vehicles to perform as expected; Li Auto’s ability to compete successfully; Li Auto’s ability to build its brand and withstand negative publicity; cancellation of orders for Li Auto’s vehicles; Li Auto’s ability to develop new vehicles; and changes in consumer demand and government incentives, subsidies, or other favorable government policies. Further information regarding these and other risks is included in Li Auto’s filings with the SEC and the HKEX. All information provided in this press release is as of the date of this press release, and Li Auto does not undertake any obligation to update any forward-looking statement, except as required under applicable law.

For investor and media inquiries, please contact:

Li Auto Inc.
Investor Relations
Email: ir@lixiang.com

The Piacente Group, Inc.
Yang Song
Tel: +86-10-6508-0677
Email: Li@tpg-ir.com

Brandi Piacente
Tel: +1-212-481-2050
Email: Li@tpg-ir.com

1All translations from Renminbi (“RMB”) to U.S. dollar (“US$”) are made at a rate of RMB6.3393 to US$1.00, the noon buying rate in effect on March 31, 2022 as set forth in the H.10 statistical release of the Federal Reserve Board.

2Vehicle margin is the margin of vehicle sales, which is calculated based on revenues and cost of sales derived from vehicle sales only.

3The Company’s non-GAAP financial measures exclude share-based compensation expenses. See “Unaudited Reconciliation of GAAP and Non-GAAP Results” set forth at the end of this press release.

4 Free cash flow represents operating cash flow less capital expenditures, which is considered a non-GAAP financial measure.

5Except for vehicle margin and gross margin, where absolute changes instead of percentage changes are presented.

6 Each ADS represents two Class A ordinary shares.

7 Non-GAAP basic net earnings/loss per share attributable to ordinary shareholders is calculated by dividing non-GAAP net income/loss attributable to ordinary shareholders by the weighted average number of ordinary shares outstanding during the periods. Non-GAAP diluted net earnings/loss per share attributable to ordinary shareholders is calculated by dividing non-GAAP net income/loss attributable to ordinary shareholders by the weighted average number of ordinary shares, dilutive potential ordinary shares outstanding during the periods, including the dilutive effects of convertible senior notes as determined under the if-converted method and the dilutive effect of share-based awards as determined under the treasury stock method.