Li Auto Inc.

gentlemen. Thank you for standing by for Lee Otto's first quarter 2023 earnings conference call. At this time, all participants are in the listen-only mode. Today's conference call is being recorded. I will now turn the call over to your host, Janet Tsang, Investor Relations Director of Lee Otto. Please go ahead, Janet.

Thank you, operator. Good evening and good morning, everyone. Welcome to Li Auto's first quarter 2023 earnings conference call. The company's financial and operating results were published in the press release earlier today and are posted on the company's IR website. On today's call, we have our chairman and CEO, Mr. Xiang Li, and our CFO, Mr. Johnny Tia Li, to begin with prepared remarks. Our president, Mr. Donghui Ma, and other senior executive management will join for the Q&A discussion. Before I continue, please be reminded that today's discussion will contain forward-looking statements made under the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements involve inherent risks and uncertainties. As such, the company's actual results may be materially different from the views expressed today. Further information regarding risks and uncertainties is included in companies' filing with the U.S. Securities and Exchange Commission and the Hong Kong Stock Exchange. The company does not assume any obligation to update any forward-looking statements except as required and the applicable law. Please also note that LIATO's earnings press release and this conference call include discussions of unaudited GAAP financial information as well as unaudited non-GAAP financial matters. Please refer to Liado's disclosure documents on the IR section of our website, which contain a reconciliation of the unaudited non-GAAP matters to comparable GAAP matters. Our CEO will start with his remarks in Chinese. There will be translation after he finishes all his remarks. With that, I will now turn the call over to our CEO, Mr. Xiangli. Please go ahead.

Hello, everyone. Welcome to today's phone call meeting. In the first quarter of 2023, China's new energy car market continued to grow rapidly, but market competition increased and triggered the consumer's official sentiment. Despite this, we believe that the real strong will be born in the competition. In the first quarter, we achieved the best sales performance in the single quarter. The user's continued recognition of ideal R8 and ideal R9, as well as the strong order volume of ideal R7, and fast production capacity. Ideal Motors' single-seater delivery reached 52,584 taels, which is 65.8% of the total increase. This is the result of the top three in the Chinese market, with more than 800,000 Chinese car brands. The market share rate reached 11%, far exceeding other new market brands. This once again proves our ability to design and manufacture high-end products, as well as our supply chain, manufacturing, the advantages of sales and service networks, and system efficiency. We will do our best to quickly grow with the advantages and expand our leading position. In April, our delivery volume reached 25,681. The total delivery exceeded 335,000. Li Xiang R7, R8, and R9 have achieved a bright performance in the segment market. According to the data of the weight of the heavyweight, Li Xiang R7 opened the deal in early March, has won the Chinese market for medium-sized SUVs. It surpassed 10,000 cars in the first full delivery month in April. It became the fourth single-car delivery project. Li Xian R28 is still leading in six new markets. Li Xian R29, the first SUV market in China since the end of August last year, has become the monthly sales champion. With a strong delivery volume, is due to our continuous pursuit of outstanding efficiency. Our financial indicators have been greatly improved. The total revenue of the first quarter of the company has reached 187.9 billion RMB, which is the same as the growth of 96.5%, and it has achieved net profit and net profit. At the same time, the free cash flow has reached a new high of 67 billion RMB. The healthy profit and cash flow will provide strong support for our products, platforms, and systems, and establish a solid foundation for our long-term development. With the ideal L7R, and the ideal R8L will start delivery in April. We have further expanded the product price and the coverage of family users. It is expected that in the second quarter of this year, the market share of ideal cars with a market share of more than 200,000 new users will be further increased. The delivery amount is expected to reach 76,000 to 81,000. Product delivery is only the beginning. In order to continuously improve the user experience of family users, we continue to improve product efficiency through OTA. Since this year, has completed the upgrade of 4.3 and 4.4 OTA versions. It has updated more than 100 functions and experiences. The functions include the ability to self-define the function combination, to achieve the task master of seat, driving, navigation, application, and so on, and to achieve the function of autonomous overtaking and overtaking without the need for navigation, such as the first high-speed highway and urban expressway in China. The ideal version of OTA 3.3 will be launched at the end of this year. For family members, safety is always the first priority. Every model of ideal car has been developed with the strictest standards. After comprehensive safety testing, in April 2023, China Insurance Safety Index published the latest evaluation results. Ideal R8 achieved the highest evaluation in terms of internal member safety, outside vehicle safety, and vehicle support safety. And in terms of driving member safety, with a 2% increase in front-end value, and received a B rating. The R9 also received a 5-star rating in the latest Chinese new car rating test, with a 91.3% overall rating. In the first quarter of 2023, we will continue to strengthen our business capabilities, including upgrading and expanding our online and offline integrated direct sales and service networks to support multi-car development, providing users with more convenient and efficient services, At the same time, output our brand vision to enhance brand influence. In terms of the retail store network, with the release of the multi-car type, we continue to increase the number of new retail centers. At the same time, we will quickly carry out the upgrade work of the store, changing the store with a small area in the past into a large store that supports multi-car type. Since the release of Dream29 in June last year, we have optimized and expanded the area by exchanging paper, and we have optimized nearly 50 existing stores. At the same time, we have newly added more than 50 stores. As of April 30, 2023, Dream Cars already owns 302 retail centers nationwide, covering 123 cities, and 318 authorized retail centers and maintenance centers, covering 222 cities. As we accelerate the company's business development, we will continue to develop products and services under the company's guidance. On April 21, we published the 2022 ESG report, which detailed our continuous exploration and development in the ESG field, We have received MSCI ESG AA reviews for two consecutive years. In the future, we will continue to improve the ESG management system, promote the harmonious development of brands and environments in society, and create value for users, employees, partners, and other parties. The next stage of development, Dream Cars, will be promoted according to the dual-energy strategy issued on April 18. On the one hand, we will enter the 3.0 era of smart driving representing the city of NOA. On the other hand, we will start a new edition of high-pressure, pure power, and cheap. In terms of intelligence, so far, we have provided high-speed NMV functions for more than 280,000 families. The high-speed NMV has traveled more than 140 million kilometers. This quarter, we will extend from high-speed scenarios to urban scenarios, and send the ideal ADMAX 3.0 urban NMV function to internal users, and strive to send it to more than 100 cities nationwide by the end of 2023. Next, In the transformation of the Transformer model to smart driving, we will have the most training samples in China. Ideal cars will be the biggest beneficiaries. In the case of electric and high-pressure electric vehicles, we will stick to two lines. The first is to make the efficiency of the ride more efficient. The city uses electricity and long-distance power generation, providing a better use experience than two-wheeled vehicles. The second is to make the electric driving technology better, so that the family's travel radius is not limited to one city. Realize the energy-saving experience of electric users to look forward to. In 2025, our product base will include a super flagship model, five electric vehicles, and five pure electric vehicles, to further expand the user community and open up the mass market. This year, we will invest heavily in the construction of the super charge network. Our 4C super charge can reach 480,000 watts of peak power. With our pure electric vehicles, we can achieve a range of 400 kilometers in 10 minutes. Before the end of 2023, we plan to build Three hundred high-speed charging stations will cover the Jinjinji, Changsangjiao, Dawang District, and Chengyu four major economic areas. And by the end of 2025, the charging stations will be expanded to 3,000, covering 90% of the country's high-speed railways and the main one, two, and three-line cities. In the future, we will continue to strengthen the operational capacity of Jinjinji, build the organizational capacity of a larger scale of knowledge, maintain the healthy growth of trade, As we continue to strengthen the ability of smart driving and smart cooking, we will also carry out a double product strategy for electric and high-pressure pure electricity. I believe that ideal cars will continue to improve in the leading position in the New South Wales car market. I also believe that we will bring more and better choices for more widespread home buyers, creating a mobile home, creating a hard-working home. Next, let's welcome our CFO Li Tie to introduce our financial performance in detail.