Li Auto Inc.

Hello, ladies and gentlemen. Thank you for standing by for Lee Otto's second quarter 2024 earnings conference call. At this time, all participants are in listen-only mode. Today's conference call is being recorded. I will now turn the call over to your host, Ms. Janet Zhang, Investor Relations Director of Lee Otto. Please go ahead, Janet.

Thank you, Kaylee. Good evening and good morning, everyone. Welcome to Lee Otto's second quarter 2024 earnings conference call. The company's financial and operating results were published in a press release earlier today and were posted on the company's IR website. On today's call, we will have our Chairman and CEO, Mr. Xiang Li, and our CFO, Mr. Johnny Tia Li, begin with prepared remarks. Our President, Mr. Donghui Ma, and Senior Vice President, Mr. Liang Junzhou, will join for the Q&A discussion. Before I continue, please be reminded that today's discussion will contain forward-looking made under the safe harbor provisions of the U.S. Private Securities Detegation 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 certain company filings with the U.S. Securities and Exchange Commission. Commission and the Stock Exchange of Hong Kong Limited. The company does not assume any obligation to update any forward-looking statements except as required under applicable law. Please also note that Li Auto's earnings price release and discomfort call include discussions of unaudited U.S. GAAP financial information as well as unaudited non-GAAP financial matters. Please refer to Li Auto's disclosure documents on the IR section of our website, which contains a reconciliation of the unauthorized non-GAAP measures to comparable U.S. GAAP measures. Our CEO will start his remarks in Chinese. There will be English translation after he finishes all his remarks. With that, I will now turn the call over to our CEO, Mr. Xianglin. Please go ahead.

Hello, everyone. I'm Li Xiang. Welcome to today's conference. In July this year, the penetration rate of New South Wales cars in China has reached nearly 50%. Everyone's recognition of smart electric vehicles has gradually exceeded that of combustion cars. Consumers are more inclined to buy top-notch brands with high sales and maintenance technology. The brand concentration of the New South Wales car market will become more and more obvious. Second, although the market environment is complex and diverse, we focus on the value and efficiency of users. Sales performance is still strong. The total delivery of new cars is more than 1.8 million. The same growth is 25.5%. Ideal cars are more than 200,000 yuan. The market value of new and old cars has increased from 13.6% in the first quarter to 14.4% in the second quarter. It is one of the best-selling domestic car brands. Since June, more than 200,000 yuan, including the entire SUV market including new energy and diesel cars, and achieved the best performance of more than 200,000 brands. In terms of models, the ideal all-seater models are in the top position in the market. In the second quarter, the ideal R7 and the ideal R8 are the top two in the medium to large SUV sales of more than 300,000 yuan respectively. The ideal R9 is still one of the top SUV users. In addition, In April of this year, the ideal R6 was released. Production and delivery are on the rise. With excellent product power and accurate positioning for user needs, since June, the delivery volume has continued to exceed 20,000. At more than 200,000 yuan, it is ranked second in the entire car market, including new energy and diesel cars. It is only second in the Tesla Model Y. In recent years, we have achieved many delivery milestone cups. On June 21, the ideal car accumulated delivery broke through 800,000 units and became the first new Chinese brand to reach this milestone. In July, our delivery amount reached 51,000 units, creating a new record of monthly delivery. On August 21, the ideal car accumulated delivery further broke through 900,000 units and created a new history of Chinese luxury car and car brand. Here, I would like to express my special gratitude for the hard work of Ideal Motors and all its members, as well as the recognition and support of a large number of users. In the second quarter of 2024, our total revenue reached RMB317 billion, with a 10.6% growth ratio, and the net profit remained at 19.5% of the health level. As the capacity of Ideal26 reaches a stable state, with the implementation of all of our cost reduction and efficiency measures, We are confident that the business performance of ideal cars will be further improved in the second half of the year. Product delivery is just the beginning. Continuous upgrade through OTA, we continue to replace new functions and improve new experiences, so that users can grow together. In July this year, we released the OTA 6.0 and 6.1 updates of the ideal MEGA and ideal L series. to realize the comprehensive evolution of smart driving, smart space, and smart electric vehicles. The most worth mentioning is our long-term progress in smart driving. In July, we sent more than 240,000 ABMAX users unlimited city and unlimited roads of WUTU NOA. It can rely on fresh information and can be used all over the country. Our WUTU NOA has received a wide range of reviews from users and has led to an increase in orders. Since the start of the U2O in May, the NVA price has increased by 3 times. After OTA 6.0 was launched, the daily life of city NVA has doubled nearly 8 times, and the city NVA journey has doubled nearly 3 times. So far, the user penetration rate of ideal car intelligent driving has exceeded 99%. The total journey of the entire scene NVA has exceeded 1.1 billion kilometers. The satisfaction of smart drivers and the ADMAX orders are also continuously improving. The smart driving of ideal cars will continue to upgrade and quickly stack up. At the summer release of smart driving on July 5, we released the first dual-system smart driving program based on the E2E end-to-end and VRM visual language model, and at the end of July, we promoted it to thousands of special users. E2E's end-to-end and VRM's The visual language model also shows the speed of one model in addition to the ability to play and think logically with the intelligent driving system. At present, the bird test is being relayed at a speed of three to four versions per week. The average daily life of the user is more than 70%. In addition, we independently developed the reconstruction and generation-style visual model for the training and verification of intelligent driving. Based on this new dual-system architecture, the pricing plan can make the information transmission and reasoning calculation efficiency higher, the model generation speed is faster, the planning ability is more attractive, and the user experience is also more optimized. With the abundant growth of the product array, we continue to upgrade and expand the sales and service network of ideal cars. In the second quarter, we will convert the shopping mall at the back into the center shop, which is the 4S shop. As well as the way of upgrading the existing shopping malls, the ratio of our central stores has been increased to 31%, and the number of stores in the store has been increased by more than 13%. As of July 31, 2024, Dream Cars has operated 487 retail centers in 146 cities across the country, and has operated 411 post-sales centers and retail centers in 220 cities. In terms of charging network construction, the ideal car has already operated 733 ideal supercharging stations on August 27, with 3428 supercharging stations. At the same time as the national highway and urban continuous layout supercharging station, we work closely with many high-quality cooperation partners to integrate industry resources. In July, the first selection of supercharging stations was also put forward. Through funding, We will continue to expand the coverage of the super network and increase the density of the network to improve the user experience, so that more families can freely choose the products of ideal cars. In the third quarter, we expect the delivery of ideal cars to reach 14.5 million to 15.5 million. As a growth-driven company, ideal cars will continue to create products and services that exceed the needs of users. At the same time, strengthen the influence of ideal brands in the new energy and luxury car market. We will stick to the value of users and carefully polish products. It is expected that in the first half of 2025, a new pure SUV will be released to serve more family users. Next, let's welcome our CFO Li Tie to introduce our financial performance in detail.