Li Auto Inc.

Hello, ladies and gentlemen. Thank you for standing by for Lee Auto's fourth quarter and full year 2025 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 Auto. Please go ahead, Janet.

Thank you, Operator. Good evening and good morning, everyone. Welcome to Lee Auto's fourth quarter and full year 2025 earnings conference call. The company's financial and operating results were published in a press release earlier today, and they 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 T. Li, to begin with prepared remarks. Our President, Mr. Donghui Ma, and our CTO, Mr. Yan Xie, 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 filings 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 Liauto'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 Liauto's disclosure documents on the IR section of our website, which contain a reconciliation of the unaudited non-GAAP matters to comparable gap 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. Xiang Li. Please go ahead.

Hello, everyone. I'm Li Xiang. Welcome to today's conference. The past few years have been an important turning point for Li Xiang. With the expansion of the company, we have re-examined many basic capabilities, one of which is very core, which is sales. The biggest problem we had in the past was to manage a direct management system using the management system of suppliers. And the most important thing to do in a direct management system is to manage the edge as the core. Without suppliers helping us manage the edge, this should become our own responsibility. Since the third quarter of last year, We have been exploring how to make higher-quality opening, how to manage the shop and encourage the manager, and how to effectively train the team. All of these starting points are summarized as a core mission, how to sell the car with a direct sound system. To do this, we use the results as a guide, and measure the standard of sales and manpower output to make a series of effective changes. First of all, it is the optimization of division of labor and the concentration of personnel. We solved the problem of poor selection through door-to-door exchange, and concentrated the sales power of the second-tier commercial supermarkets, which are scattered and declining, into a more potential market, including the first-tier malls and car central stores, which directly led to an increase in door-to-door efficiency and human resources production. At the same time, in order to really activate the positivity of first-tier sales, we are also making radical breakthroughs. In March this year, we officially launched a partner project for our store. Our store has become a basic business unit. The excellent store manager has the right to make decisions and share profits. From the traditional sales management role, he has turned into a real store manager. Today, in an environment where the car sales system generally does not make money, we hope to cultivate a store manager with a large amount of revenue of more than one million a year. to achieve three times the income of an outstanding manager, and to ensure that the company's order volume and delivery volume are stable in the first batch of high-end vehicles. In terms of products, in the second quarter of this year, we will officially release the ideal R9 series. With a fully upgraded power system, intelligent driving, and chassis technology, we will pull apart the obvious difference in experience from the products, and return to the leading position of flagship SUVs. The ideal R9 will be equipped with 800hp, and 5C supercharging technology. At the same time, it is equipped with our new generation of full-time self-sufficiency Zengcheng 3.0 system to achieve higher power generation efficiency and greater power generation capacity. With NVH optimization and our first EGR low-temperature start-up technology, we can provide a静謐性和价值体验,以及更好的冬季能耗表现。我们还将全球首发的AI智能机油保养 to achieve an ultra-long maintenance period of three years or 30,000 kilometers. The Ideal 29 Levis version with a price of 55.98 million yuan inherits and carries our deep thoughts on the giant smart flagship SUV. Ideal 29 Levis will be equipped with the world's first mass production full-line control chassis and 800V full active suspension system, providing top-level comfort and control and suspension texture. The shift to automatic and idle response speed and safety have also been greatly improved to provide the necessary execution basis for high-end carpenters and giants. It is also worth mentioning that the ideal R9 Levis will be equipped with two Maher 100 chips with 5nm of ideal self-reliance, which has an effective computing power of 6 times that of Sol-U, and through a better adaptation of the data flow structure and self-reliance carpenters, the soft hardware of the self-propelled model and the self-propelled algorithm. The successful replacement of the ideal R9 will directly determine the market line of the entire R series. If the competitiveness of the previous generation of ideal R9 comes mainly from the precise product definition, then the new generation of ideal R9 will build up the core competitiveness at the technical level. Our pure electric vehicles are also continuously increasing. First of all, through the continuous efforts of the suppliers, the supply problems of the ideal i6 will be gradually resolved. We will continue to improve production capacity and strive to make everyone's promotion cycle a step shorter. At the same time, we can see that with the increase in the journey of car owners using Li Cheng, the appreciation on the experience drives the ideal i8 NPS to grow by more than 20%. In the year-end year-end road release of the new car brand health research, the ideal i8 NPS was also tied by the Chinese-French ICV. With such an NPS performance, since March, the order of Ideal i8 will have more than three times the growth in January. Ideal i6 and Ideal i8 have co-opted the market base of Ideal pure electric products, and co-opted the market base of Ideal pure electric products. Our goal is to completely solve all the problems before, so that our pure electric products can truly occupy the market. In addition, Looking back at last year, after the release of Dream i6, there were many challenges facing the handover policy, production capacity improvement, and the decoupling of the acquisition tax subsidy policy. This made the interest rate of Dream i6 under pressure, but it also saved enough space for the improvement of the interest rate this year. In the second half of 2026, we will also launch a new pure electric flagship SUV, Dream i9, to further enrich our pure electric products, and meet the needs of many users. The year of 2026 is the key year for ideal cars to evolve into a giant smart enterprise. Facing a competitive new car market, we will strive to increase the number of high-tech cars, from smart electric vehicles to giant smart enterprises, to establish the competitive advantage of the next stage. In the year of 2025, the company's R&D investment reached 1.13 billion yuan, of which AI-related investment accounted for 50%. We will continue this investment strategy in 2026 and continue to leverage the core capabilities of the giant smart enterprise. For Ideal70, AI mainly involves two aspects. One is to create AI. The second is how to use AI. Creating AI is to give real life to the product. Using AI is to improve our work efficiency. In terms of creating AI, we have completely redeveloped the research and development organization. and run it in the way of a real IT company. Creating products is creating people. In terms of processing chips, machine models, software and hardware, we need to build the appropriate organizational capabilities and training staff. In terms of products, we are a car with vitality. AI is the key to the vitality of the product. I believe that if we rely on the new generation of technical platforms, we will see changes in our products. They are no longer a simple extension of traditional cars or electric vehicles, but have vitality and initiative, and are reflected in our daily high-frequency life experience. At the efficiency level, AI is turning the company over to expand its information flow and reduce the efficiency of decision-making. By introducing agent-based co-operation, our delay and evolution speed begin to reproduce the high efficiency of business companies. This change has been initially reflected in this year's daily operations. It can be said that AI has not only brought about the innovation of production tools, but also promoted a more active organizational model. Finally, I would like to emphasize that we will transform the complete technology system of cars and giant robots from the ideal R9 of 2022 to today into the real user experience and commercial value, and thus build the core of the second decade. So please pay attention and buy with confidence to experience our new generation of products. Now translating for Mr. Li Xiang.