Li Auto Inc.

Hello, ladies and gentlemen. Thank you for standing by for Lee Auto's third 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 Tseng, Investor Relations Director of Lee Auto. Please go ahead, Janet.

Thank you, operator. Good evening and good morning, everyone. Welcome to Lee Auto's third 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 Tian Li, begin with prepared remarks. Our President, Mr. Donghui Ma, and Senior Vice President, Mr. James Jiang Jinsou, will join for the Q&A discussion. Before we 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 certain company failings with the U.S. Securities and Exchange 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 in the 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 contain a reconciliation of the unaudited 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. Xiangli. Please go ahead.

Hello, everyone. I'm Li Xiang. Welcome to today's press conference. In the third quarter, China's volume of new and new cars has reached 50.3%. The number of new and new cars in the quarter has surpassed that of gasoline cars for the first time. At the same time, the head effect of brand sales is becoming more and more obvious, especially in the new and new car market with a price range of more than 200,000 yuan. In the third quarter, the market share of the three major brands has exceeded 50%. Among them, the number of delivery of ideal cars in the third quarter has reached 15.2 million, which is a 45.4% increase. The market share rate has risen from 14.4% in the second quarter of this year to 17.3% in the third quarter. The high market share and market share rate have further increased the ideal car market share in China, which is more than 200,000 yuan. In addition, the ideal car market share in the whole car market, which is more than 200,000 yuan, is the first to exceed the traditional Chinese brand in many European countries. The market share rate is close to the top three. and become a brand leader in China. In the face of the increasing number of entry-level cars in China, the ideal R series sales are still strong. We continue to innovate. Through a monthly version of high-quality OTA updates, the functions of intelligent driving, intelligent seating, and car experience are constantly evolving. The average sales of the 3G series R series is up to 50,000 a month. It is worth mentioning that is due to the strong investment of research and development. Ideal Car's intelligent driving ability is quickly relayed and continues to break through, promoting ADMAX, the car's sales ratio is constantly increasing. This not only represents the user's recognition of Ideal Car's technical achievements, but also further improves our product structure. In the third quarter of 2024, the total income of Ideal Car reached RMB 429 billion, with an increase of 23.6%, creating a new record. . . . . . . . . . to become the first Chinese brand to reach 1 million delivery. 1 million delivery is a milestone and a new beginning. In the future, we will continue to upgrade our technology, maintain innovative advantages, and strive to create outstanding product and service. At the same time, we will insist on efficient production and delivery rhythm, strengthening our industry's leading position. In the fourth quarter of this year, we expect the delivery volume of ideal cars to reach 160,000 to 170,000. The total delivery volume in 2024 is about 520,000 to 512,000. In terms of smart value, since July, our full-time resource of the end to the end plus VRM's new generation of smart value program, with a speed of two to three official versions per week. In three months, the size of the model training data has increased from 1 million clips to 4 million clips. The level of control process, MPI, is about 2.5 times higher. Based on the powerful data model and the deep understanding of the traffic environment covered by the whole scene, this new dual-system frame solution can greatly improve the experience of user frame. On October 23rd, we launched OTA 6.4 delivery to MEGA and Ideal R series vehicles, continuously to more than 320,000 ADMAX users. and fully deliver the new frame solution. Since July, there has been no wrongful delivery nationwide, and in just three months, ABMAX technology has been updated again. In addition, OTA 6.4 has also brought a more dynamic ideal class for all car owners, such as the task master 2.0 under the language model, the charging experience upgrade, and the new functions and experience optimization of the smart space and smart electricity. We have established a core advantage for smart driving technology. Until October 30th, the ideal car smart driving training course has reached 2.6 billion kilometers. The ideal car user NOA general course has reached 13.9 billion kilometers. There are more than 60 million times of smart driving functions. The ideal car takes the initiative to gather users, to prevent the current large-scale accident 3.45 million times, including 516 extreme malignant accidents. In the third quarter, we continue to upgrade sales and service networks. By the end of September, Dream Cars will operate 479 retail centers in 145 cities across the country, and 436 post-sales maintenance centers and authorization version centers in 221 cities. Among them, there are 165 of them located in the city of Tougu and in the center of Youzhi. The unit capacity of its single chain is 9 to 11 units, which leads to more than 3,000 total units. At the same time, it also prepares for our new pure electric SUV while supporting the increase in sales of existing models. In terms of charging network construction, so far, the ideal car has been open to operation, with 1,000 ideal supercharging stations. It is equipped with 4,888 superchargers and covers 175 cities in 31 provinces across the country. Among them, the ideal high-speed supercharger station has reached 582. It ranks first in the high-speed supercharger network construction scale industry. In addition, we continue to expand our cooperation with high-quality industry partners. On October 12, we officially reached a strategic cooperation with China. Both sides will build a supercharger station and platform Internet interaction and other aspects. We have built a high-end super-large platform. Currently, we have built more than 1,200 high-power, high-stability third-party high-end charging stations. In the field of pure electricity, we will maintain a strategic structure. The efficiency and reliability of pure electric vehicles has always been one of the core concerns of consumers. We will continue to speed up the charging network layout. To actively explore new technologies, the goal is to build a charging network including high-speed and city-wide industries next year. To prepare for our new charging SUV models, and to continue to provide more users with convenient and reliable energy-saving time. Finally, I would like to share with you the results we have obtained in ESG. In September this year, with the management of wages, product quality safety, Hello everyone, this is Lee Seung and thank you for joining today's earnings conference call.